MTAR Tech tanks 12% as company cuts FY24 revenue, Ebitda guidance

The company cut guidance due to deferment of shipment plans against the confirmed orders from Clean Energy

Shares of MTAR Technologies cracked 11.7 per cent to Rs 2,248 apiece on the BSE in Thursday's intraday trade after the company cut its revenue and Ebitda guidance for financial year 2023-24 (FY24).

At 11:52 PM, the shares were down 9.4 per cent to Rs 2,308.6 as against an unchanged S&P BSE Sensex index. 

"We revise our annual guidance for FY24 to a revenue of around Rs 670 crore – Rs 700 crore  as against previous guidance of around Rs 830 crore – Rs 860 crore with an Ebitda of around 26 per cent (+/- 100 bps) as against previous guidance of around 28 per cent ( +/- 100 bps) due to deferment of shipment plans against the confirmed orders from Clean Energy to the next fiscal year," said Parvat Srinivas Reddy, managing director & promoter, MTAR Technologies.

In the recently concluded quarter, the defence equipment manufacturer reported a 32.2 per cent year-on-year (Y-o-Y) increase in revenue from operations at Rs 166.8 crore from Rs 126.2 crore in the previous year quarter. 

However, an increase in costs and inventories resulted in gross profit margin declining to 45.6 per cent to 54.1 per cent Y-o-Y. Sequentially, too, the margin shrank from 49.9 per cent reported in Q1FY24. 

Further, an increase in expenses led to bare 3-per cent Y-o-Y increase in Ebitda (earnings before interest, tax, depreciation, and amortisation) to Rs 36.1 crore from Rs 34.9 crore. Compared to Q1FY24, Ebitda rose 4.3 per cent. Ebitda margin, too, contracted to 21.6 per cent in the quarter under study from 27.2 per cent last year and 22.7 per cent in the previous quarter.

The company's net profit fell 17.1 per cent Y-o-Y to Rs 20.5 crore from Rs 24.7 crore in the September quarter of last year, and was flat Q-o-Q.

Meanwhile, the company received Rs 79.6 crore of orders in various sectors including Clean Energy – Civil Nuclear Power, Fuel cells and Hydel, Space, Defence, Products and others in Q2FY24.

Reddy said the long-term growth of the company remains intact as the sectors MTAR is catering to are witnessing significant growth. In addition, we expect there will be an acceleration of orders inflow from H2FY24, he added.

MTAR has seven strategically based manufacturing units including an export-oriented unit each based in Hyderabad, Telangana. MTAR caters to Clean Energy – Civil Nuclear Power, Fuel Cells, Hydel & Others, Space, and Defence sectors. The company has a long-standing relationship of over four decades with leading Indian organisations and global OEMs. 

So far this calendar year, shares of the company have zoomed 57.8 per cent as against 6.7 per cent gain in the benchmark Sensex index. The stock hit a 52-week high of Rs 2,920 on September 11, 2023, and a 52-week low of Rs 1,472.4 on March 28, 2023.