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MTAR Technologies Limited
IPO NOTE 02nd March 2021India Equity Research II IPO Note II 2nd Mar 2021 Page 2
MTAR Technologies Ltd
Issue Opens On Issue Closes On Price Band (INR) Issue Size (INR Cr.) Rating
Mar 3, 2021 Mar 5, 2021 574 – 575 595 – 596 SUBSCRIBE
MTAR Technologies is a leading national player in the precision engineering industry, primarily engaged in the manufacturing of
mission-critical precision components with close tolerance and in critical assemblies through its precision machining, assembly,
specialized fabrication, testing, and quality control processes. Since its inception, MTAR Technologies has significantly expanded
its product portfolio including critical assemblies i.e., Liquid propulsion engines to GSLV Mark III, Base Shroud Assembly &
Airframes for Agni Programs, Actuators for LCA, power units for fuel cells, Fuel machining head, Bridge & Column, Drive
Mechanisms, Thimble Package, etc. A wide range of complex product portfolios meets the varied requirements of the Indian
nuclear, Defense, and Space sector. ISRO, NPCIL, DRDO, Bloom Energy, Rafael, Elbit, etc. are some of the esteem clients.
Currently, the firm has 7 state-of-the-art manufacturing facilities in Hyderabad, Telangana that undertake precision machining,
assembly, specialized fabrication, brazing and heat treatment, testing and quality control, and other specialized processes.
OFFER STRUCTURE
Particulars IPO Details Indicative Timetable
Offer Closing Date Mar 5, 2021
No. of shares under IPO (#) 10,372,417
Finalization of Basis of Allotment with Stock Exchange On or about 10th Mar 2021
Net offer (# shares) 10,372,417
Initiation of Refunds On or about 12th Mar 2021
Price band (INR) 574 – 575 Credit of Equity Shares to Demat accounts On or about 15th Mar 2021
Post issue MCAP (INR Cr.) 1,766 – 1,769 Commencement of Trading of Eq.shares on NSE On or about 16th Mar 2021
Source: IPO Prospectus Source: IPO Prospectus
Issue # Shares INR in Cr % Objects of the Offer: The net proceeds will be utilized for the following purpose
Repayment / prepayment in full or in part, of borrowings availed by the Company
297.7 –
QIB 5,186,209 50% Funding working capital requirements; and
298.2
General corporate purposes
NIB 1,555,862 89.3 – 89.5 15%
Shareholding Pattern Pre-Issue (%) Post-Issue (%)
Retail (Cr) 3,630,346
208.4 - Promoters & Promoters Group 62.2% 50.3%
35%
208.7
Others 37.8% 49.7%
Net Offer 10,372,417 595 – 596 100%
Total 100.0% 100.0%
Source: IPO Prospectus Source: IPO Prospectus
Particulars (In INR Mn)* FY18 FY19 FY20
Revenue 1,596 1,837 2,138
EBITDA 319 537 580
EBITDA Margin 20.0% 29.2% 27.1%
PAT 54 392 313
PAT Margin 3.4% 21.3% 14.7%
RONW 2.6% 17.8% 13.6%
ROCE 3.1% 18.6% 14.8%
Source: IPO Presentation, * Restated Consolidated, # Proforma Ind AS
ANALYST KRChoksey Research Phone: +91-22-6696 5555, Fax: +91-22-6691 9576
Parvati Rai, head-research@krchoksey.com, +91-22-6696 5413 is also available on Bloomberg KRCS www.krchoksey.com
Thomson Reuters, Factset and Capital IQIndia Equity Research II IPO Note II 2nd Mar 2021 Page 3
MTAR Technologies Ltd
INVESTMENT RATIONALE
Precision engineering expertise with complex product manufacturing capability:
The company develops and manufactures a wide range of mission critical assemblies and precision components with close
tolerances (5-10 microns), through its precision machining, assembly, and specialized fabrication facilities, for onward usage by their
customers in the clean energy, nuclear, space and defense sectors in India, and abroad. These capabilities are further supported by
an extensive and stringent testing and quality control mechanism undertaken at each stage of the production process. The company
seeks to leverage their capabilities, including their manufacturing facilities and quality control practices, to not only expand their
product portfolio in the existing segments but also enter new business segments. They intend to enhance their capabilities and
hence grow value chains to supply critical and differentiated engineered products with a healthy mix of developmental and volume-
based production.
Wide product portfolio leading to long-standing relationships with the customers:
As on December 31, 2020, company’s major product portfolio includes 3 kinds of products in the clean energy sector, 14 kinds of
products in the nuclear sector and 6 kinds of products in the space and defense sectors. They strive to understand their customers’
specific business needs and provide products to meet their requirements and accordingly, their ability to provide quality products as
per the customer specification, and their consistent customer servicing standards, have enabled them to increase their customers’
dependence on them. Within the nuclear sector, their long-standing relationship of over 16 years with NPCIL bears testimony to
their ability to manufacture and supply specialized products. They have established relationship with ISRO to whom they have been
supplying a wide variety of mission critical components and critical assemblies for its various missions, for over 3 decades. The
company plans to continue to focus on customers with whom they have long-standing relationships in order to develop and supply
more sophisticated, higher margin products. The company has, along with their customers, been playing a key role in the co-
development of quality products for key national programs such as Chandrayaan and Mangalyaan missions.
Modern technology at state-of-the-art manufacturing facilities:
The company operates through their 7 state-of-the-art manufacturing facilities, including 1 EOU, situated in Hyderabad, Telangana
which is one of the key centres for defense research and development in the country. The presence of major defense organizations
in Hyderabad not only provides them access to the critical R&D and high-volume projects, but also allows for ease of coordination,
specifically in terms of their collaborative R&D efforts, as well as for subsequent close monitoring of manufacture and quality control
processes, thereby giving them an advantage over the other players located in other regions. They have consistently undertaken
expansion of their manufacturing facilities through internal accruals, in the pas with a view to capture increasing demand in the
future. Their manufacturing facilities enable them to expand their operations with ease to meet future demand at minimized cost of
expansion.
Strong and diversified supplier base for sourcing of raw materials:
The company has, over the years, developed a robust supply chain for the sourcing of a wide variety of specialized raw materials
used in the manufacture of mission critical precision products. The essential raw materials used in their manufacturing facilities are
various kinds of alloys steels and bought out items. The raw materials used for manufacture of products catered to customers in the
clean energy sector are Inconel sheets of various grades, to customers in the nuclear sector are specialized steels such as 17-4 PH, SS
410, 13-8 MO PH and to customers in the space and defense sectors are alloy steels and aluminium including bearing and seals. While
they source materials from third party suppliers depending upon the requirement of a project that they undertake, in certain
instances, especially involving the critical and sensitive raw material and bought out items for the manufacture of certain products
are directly procured and supplied by their customers, mostly belonging to the space and defense sectors. The materials utilized for
products catered to the clean energy and nuclear sectors, and other consumables and bought-outs are mostly sourced from third
party suppliers, both domestic and global.
Expanding international presence through increase in exports:
The company is currently involved in the manufacture of power units, specifically hot boxes, and in the development and
manufacture of hydrogen boxes and electrolyzers, to serve Bloom Energy. Further, they have recently acquired a new international
customer operating in the clean energy sector. The company intends to continue to expand their international operations to
enhance their global presence in the sectors they cater to. They seek to identify markets where they can provide cost and
operational advantages to their clients and distinguish themselves from other competitors. In addition, they intend to reach out to
global OEMs who either currently have defense deals with India or have their business operations in India. They are also looking to
enter into defence offset partnership with certain global OEMs and have incorporated their Subsidiary, Magnatar Aero Systems Pvt.
Ltd. in this regard.
Track record of growth in financial performance:
The company has a good track record of growth in its financial performances over the years. The order book of the company has
grown at a CAGR of 31% between FY18 – FY20; total order book as of 31st Dec 2020 stood at INR 3,362 Mn. Whereas the order-book to
revenue stood at ~2x as of 31st Dec 2020 which indicates a betters execution capabilities of the company. The revenue grew at a
CAGR of 16% from INR 1,596 Mn in FY18 to INR 2,138 in FY20 and from INR 1,522 Mn in 9MFY20 to INR 1,773 in 9MFY21. There was a
significant reduction operating cost including the raw material cost, also other operating expenses like employee cost and other
expenses reduced by 1%, 2% & 9% YoY respectively between FY18-19; which has resulted in jump in gross margin, PAT margin and
return ratios. During the 9MFY21, the company reported PAT of INR 281 Mn (+25% YoY), with NPM of 15.8% (+108bps YoY). RoE and
RoCE for 9MFY20 and 9MFY21 was 11.6% and 12.4% respectively. During 9MFY21, the company has raised debt of INR 655 as compared
to INR 160Mn in 9MFY20 which has resulted in increase in Debt/Equity ratio to 0.3x to 0.1x for the same period. The major challenge
faced by the company is managing the working capital, the company has long cash conversion cycle of 298 days in FY20.
ANALYST KRChoksey Research Phone: +91-22-6696 5555, Fax: +91-22-6691 9576
Parvati Rai, head-research@krchoksey.com, +91-22-6696 5413 is also available on Bloomberg KRCS www.krchoksey.com
Thomson Reuters, Factset and Capital IQIndia Equity Research II IPO Note II 2nd Mar 2021 Page 4
MTAR Technologies Ltd
MTAR Technologies USP’s
• Leading player in the nuclear, space and defense and aerospace equipment manufacturing in India.
• Key Suppliers to BHEL (Bharat Heavy Electricals Limited), HAL (Hindustan Aeronautics Limited), Advance system laboratory
(DRDO) Godrej and Boyce, Liquid Propulsion Systems Centre (ISRO), and Nuclear Power Corporation of India (NPCIL). MTAR
is one of the key suppliers to Bloom Energy, which is the largest players in fuel energy space as per 2019 revenues.
• It manufactures and assembles critical precision components with close tolerances of 5-10 microns through their
competencies in precision machining, assembly, testing, quality control, and specialized fabrication.
• Focuses on indigenously manufactured import substitute components such as ball screws, roller screws, and water lubricated
bearings. These are specialized components used in space, nuclear, and defense and aerospace sectors.
• It manufactures ball screw of accuracy of JIS standard C1 to C7 that are used across end-use sectors such as machine- tools
and numerical control machines (CNC), defense, aerospace, and space programs.
• MTAR Technologies Ltd is also establishing facilities for roller screws, which is used as actuating mechanisms of aircrafts and
missiles. It will be the first manufacturer of precision engineering roller screws in India for nuclear, defense and space
segments. MTAR is also planning to set up a specialized sheet metal fabrication facility, in 2021, for defense, aerospace and
fuel cell sectors.
Industry Overview and Outlook
Precision engineering contributes 3-4% of total manufacturing output:
The ~INR 4,400+ Bn precision engineering industry mainly caters to automobile components and industrial plant and equipment
segments. The industry is estimated to contribute 3-4% of overall manufacturing output. India’s manufacturing output increased at a
CAGR of 4.9% in nominal terms between fiscals 2015 and 2020. Manufacturing gross value added (GVA) accounts for 14-15% of India’s
gross domestic product (GDP). The domestic precision engineering industry’s turnover is growing at a CAGR of 7.1% between fiscals
2016 and 2020. India’s manufacturing GVA constitutes 17-18% of the total GVA; it increased from 17.4% in fiscal 2012 to 18.1% in fiscal
2020. Within manufacturing GVA, machinery and equipment (capital goods and engineering) GVA has grown faster than other
segments. GVA at basic current prices from the manufacturing sector in India logged a CAGR of 9.8% (current prices) and 6.5%
(constant fiscal 2012 prices) during fiscals 2016-2020. This growth was supported by the Make in India initiative and sector specific
initiatives to boost manufacturing.
Auto components has large share in precision engineering market, followed by defense and aerospace:
Auto components has the highest share in the precision engineering market, followed by defense and aerospace and aviation
sectors. On account of growing demand for automobiles, domestic consumption as well as export potential, the share of auto
components in overall precision engineering is expected to rise. Defense, aerospace, aviation, power and engineering and capital
goods segments are also expected to grow steadily with rise in investments in these sectors. Defense and aerospace segment forms
18-20% of the precision engineering market and is values at INR 786 Bn in FY20. It is the largest segment after auto components.
Engineering and capital goods (excluding power) is the next largest segment with share of 9-10% and is valued at INR 609 Bn in FY20.
Engineering and capital goods segments consists of equipment and machinery components that is used across various industries
such as textile, metallurgy, process controls equipment, cement, mining, agro-industries, consumer product manufacturing and
others plant and industrial applications. Within engineering and capital goods, the process plant and industrial segment contributes
to 10-15% of the engineering and capital goods market.
Precision engineering industry is projected to log 6-7% CAGR between fiscals 2020 and 2025:
The precision engineering industry will benefit from supportive government policies for manufacturing and engineering sectors. It
will also gain from growth in the machinery and equipment industry and rise in penetration of high technology machinery for
manufacturing. Precision engineering is expected to log 6-7% CAGR between fiscals 2020 and 2025 to reach INR 5,550-6,550 Bn by
fiscal 2025. The growth in the industry will be driven by growth in auto-components domestic as well as export demand, and
indigenous manufacturing in defense segment.
ANALYST KRChoksey Research Phone: +91-22-6696 5555, Fax: +91-22-6691 9576
Parvati Rai, head-research@krchoksey.com, +91-22-6696 5413 is also available on Bloomberg KRCS www.krchoksey.com
Thomson Reuters, Factset and Capital IQIndia Equity Research II IPO Note II 2nd Mar 2021 Page 5
MTAR Technologies Ltd
Company Overview
MTAR Technologies Limited (“MTAR Technologies”) is a leading precision engineering solutions company engaged in the
manufacture of mission critical precision components with close tolerances (5-10 microns), and in critical assemblies, to serve
projects of high national importance, through their precision machining, assembly, testing, quality control, and specialized
fabrication competencies, some of which have been indigenously developed and manufactured. They primarily serve customers in
the nuclear, space and defense, and clean energy sectors. Since inception, they have strived to grow continually, contributing to the
Indian civilian nuclear power programme, Indian space programme, Indian defense and aerospace sector, global defense and
aerospace sector, as well as to the global clean energy sector. Over the years, they have also developed import substitutes such as
ball screws and water lubricated bearings that are specialized and used in the sectors the company caters to. The engineering
capability of the company, evolved over decades, has enabled them to consistently offer quality complex precision manufactured
components and assemblies, within stipulated timelines and at reasonable cost in most cases, allowing them to forge a robust
relationship with their customers.
While the bids for the projects in the nuclear and space and defense sectors are invited by issuing tender enquiries, the qualification
process for securing such tenders is extremely stringent as there is no scope for faults in such sectors.
Their past experience in the supply of their products, ability to meet specific technical requirements of their customers, reputation
for quality and safety features present in their products, financial strength, and the price competitiveness of their offerings, has not
only strengthened their position in the market but also has enabled them to establish and maintain relationships with their
customers.
In addition, they also focus on clean energy as one of their key customer sectors and are accordingly, involved in the manufacture of
power units, specifically hot boxes, and in the development and manufacture of hydrogen boxes and electrolyzers, to serve Bloom
Energy Inc., United States (“Bloom Energy”) with which, they have been associated with, for over 9 years. While hot boxes use
methane to generate power, hydrogen boxes shall use methane to generate hydrogen that shall in-turn, be used to generate power.
In addition, electrolysers will produce methane-free hydrogen that shall be used to produce power.
In addition, they have been serving customers in the nuclear sector for over 35 years and have established relationships with the
Nuclear Power Corporation of India Ltd.(“NPCIL”) having served them for over 16 years. They manufacture and supply specialized
products such as fuel machining head, drive mechanisms, bridge and column and coolant channel assemblies, among others, not
just for the new pressurised heavy water nuclear reactors, but also for refurbishment of the existing reactors. They have also
supplied critical products such as grid plate, control plug and inclined fuel transfer machine for the prototype fast breeder reactor.
MTAR Technologies is also a key supplier of mission critical components to customers within the space and defense sectors for their
programs of national importance. Through their long-standing relationships of over three decades and 4 decades with customers
such as the Indian Space Research Organization (“ISRO”) and the Defense Research and Development Organization (“DRDO”), they
have been able to supply specialized products to the Indian space programme and the Indian missile programme, respectively.
Management:
Key Managerial Personnel Position Experience
He is also a director on the boards of Ola Electric Mobility Pvt.
Subbu Venkata Rama Behara Chairman Ltd., Greaves Cotton Ltd. and Ampere Vehicles Pvt. Ltd.,
amongst others.
He has been a director on the Board since March 11, 2015 and
was appointed as the Managing Director on September 1,
Parvat Srinivas Reddy Managing Director 2020. He has been entrusted with the overall responsibility of
management of the company and its affairs. He has over 29
years of work experience.
He has been associated with the company since September
2019. He is responsible for leading the day-to-day operations
of the company in accordance with its business strategy,
Devesh Dhar Dwivedi Chief Operating Officer operating plan and capital budgets. He has over 13 years of
experience in the defense, manufacturing, information
technology and engineering, procurement and construction
sectors, among others.
He has been associated with the company since September 1,
2020. He is responsible for the planning, implementation,
Sudipto Bhattacharya Chief Financial Officer
management and running of all financial activities of the
company.
Source: IPO Prospectus
ANALYST KRChoksey Research Phone: +91-22-6696 5555, Fax: +91-22-6691 9576
Parvati Rai, head-research@krchoksey.com, +91-22-6696 5413 is also available on Bloomberg KRCS www.krchoksey.com
Thomson Reuters, Factset and Capital IQIndia Equity Research II IPO Note II 2nd Mar 2021 Page 6
MTAR Technologies Ltd
Product Portfolio
MTAR Technologies develop and manufacture high precision components and equipment which they serve to customers in the
nuclear, space and defense, and clean energy sectors in India, and abroad. The products manufactured and supplied by the company
in each of the sectors:
Sector Products
Clean energy sector Power units
Fuel machining head, Bridge and column, Grid plate, Sealing plug, shielding plug, liner tubes and end
Nuclear sector fittings, Drive Mechanisms, Top hatch cover beams and deck plate assembly, CHAS, Ball screws and
water lubricated bearings.
Base shroud assembly and air Frames, Actuator assembly Components, Components for LCA, Various
Space and Defence sectors missile parts, Valves, Electro-pneumatic modules, Liquid propulsion engines, Cryogenic engines, Ball
screws and water lubricated bearings.
The company undertakes various surface treatment activities such as nitriding, anodization, hard
Surface treatment, heat chrome plating, nickel plating, induction hardening, electro polishing, pickling, passivation, zinc
treatment and special plating and painting, among others. Their facilities also undertake heat treatment such as gas
processes facilities carbonizing, through their various furnaces. Special processes facilities such as painting, and plating
are also available in-house.
Manufacturing Units
Manufacturing
Products Manufactured Sector catered to Facilities offered
Facility
Complex nuclear assemblies manufacturing
such as fuel machining head, thimble package, Advanced computerized
Unit 1,
top hatch beam, bridge and column and high- Nuclear, defence and numerical control
Balanagar,
end defense products such as air frames, base aerospace (“CNC”)machining and quality
Hyderabad
shroud assembly for Agni missiles, among control
others.
Liquid propulsion engines such as Vikas
engine, cryogenic engines, semi cryo engine, Advanced CNC machining,
Unit 2,
electro pneumatic modules for use in polar assembly,
Gandhinagar, Space
satellite launch vehicle (“PSLV”) and Specialized fabrication, quality
Hyderabad
geosynchronous satellite launch vehicle control and testing
(“GSLV”) launch vehicles and satellite valves
High volume nuclear assemblies and
Unit 3, Nuclear, defence and
components such as end fittings, liner tubes, Advanced CNC machining and
Gandhinagar, aerospace
products such as ball screws and WLBs and quality control
Hyderabad
other nuclear site orders
EOU Unit,
Power units for supply to Bloom Energy and Advanced CNC machining,
Gandhinagar, Clean energy and
high end defence components to be supplied assembly, special processes, and
Balanagar, export defense
to an Israeli defense technology company quality control
Hyderabad
Unit 4,
This is a supporting unit and undertakes rough
Balanagar, - Rough machining
machining
Hyderabd
Unit 5,
This is a supporting unit and undertakes Surface treatment, heat treatment
Jeedmetla, -
surface and heat treatment and special processes
Hyderabad
Unit 6,
This is a supporting unit with fabrication
Gandhinagar, - Assembly
facility and large clean rooms
Hyderabad
Source: IPO Prospectus
ANALYST KRChoksey Research Phone: +91-22-6696 5555, Fax: +91-22-6691 9576
Parvati Rai, head-research@krchoksey.com, +91-22-6696 5413 is also available on Bloomberg KRCS www.krchoksey.com
Thomson Reuters, Factset and Capital IQIndia Equity Research II IPO Note II 2nd Mar 2021 Page 7
MTAR Technologies Ltd
VALUATION & VIEW:
MTAR Technologies Limited (“MTAR Technologies”) is a leading precision engineering solutions company engaged in the
manufacture of mission critical precision components with close tolerances (5-10 microns), and in critical assemblies, to serve
projects of high national importance, through their precision machining, assembly, testing, quality control, and specialized
fabrication competencies, some of which have been indigenously developed and manufactured. They primarily serve customers in
the nuclear, space and defence, and clean energy sectors. With the key USP’s and unique capabilities as mentioned above we
believe that MTAR is strategically well positioned in the industry to compete with big the players. Going forward, early indicators
for the third quarter suggest that the pace of recovery was sustained. The PMI recorded a high of 58.9, petroleum consumption by
industry turned positive (at 6.8% YoY), railway freight cargo transport continued to rise 15.4% YoY and auto sales also remained
strong. Similarly, unconventional indicators such as google mobility and GST collections also showed steady improvement.
However, it remains to be seen if the pick-up in demand seen so far is sustained especially after the festive season in October and
November and continues to grow at a healthy pace through the rest of the quarter, given that the hit to consumer incomes, the
relatively low level of fiscal support and high inflation could have a bearing on demand. We expect the top-line and bottom-line of
MTAR to improve further as the overall industry growth is supported by the Make in India initiative and sector specific initiatives to
boost manufacturing.
At the upper band of issue price, MTAR will trade at a Price/EPS multiple of 23.3x of its annualized 9MFY21 revenue, which is at a
discount to its listed peer like Schaeffler India (55.5x), SKF India (41.1x), Timken India (33.9) and L&T (40.2x). We believe that current
price band is undervalued, looking at the growth potential in the company, we anticipate listing gains and give a ‘SUBSCRIBE’ rating
to MTAR Technologies IPO.
Peer Valuation (FY20 figures)
Mkt Cap Revenue EV/EBITDA
Company CMP EPS P/E (x) RoE
(INR Cr) (INR Mn) (x)
MTAR Technologies 1,769 575 2,138 11.7 30.0 27.9 13.6%
Schaeffler India 16,137 5,162 43,668 93.1 25.1 55.5 9.5%
SKF India 11,201 2,229 28,494 54.2 26.1 41.1 14.6%
Timken India 9,513 1,265 16,215 20.2 33.9 62.8 16.9%
L&T 27,081 2,578 1,460,368 64.3 23.5 40.2 31.3%
Source: Company, Bloomberg.
MTAR key financial metrics vs. peers
Interest
Revenue EBITDA PAT (INR Gearing Current
Company Year OPM (%) NPM (%) RoCE (%) coverage
(INR Mn) (INR Mn) Mn) (x) Ratio (x)
Ratio (x)
Mahindra Defence FY20 3,073 420 190 13.7 6.2 16.3 0 33.4 2.2
Alpha Design
FY19 2,325 299 65 12.9 2.8 9.4 0.2 2.5 1.9
Technologies
Vem Technologies FY19 1,555 355 86 22.8 5.5 15.1 0.9 2.5 1.1
CIM Tools FY19 1,516 336 153 22.1 10.1 17.8 1.7 3.9 1.2
MTAR Technologies FY20 2,138 609 300 28.5 14 19.2 0.1 13.1 1.5
Schaeffler India FY19 43,668 6,407 3,676 14.7 8.4 18.8 0 154.8 3.6
SKF India FY20 28,494 3,570 2,890 12.5 10.1 21.7 0 48 3.4
Timken India FY20 16,215 3,731 2,461 23 15.2 20.3 0 140.5 3.7
Godrej & Boyce FY20 114,078 8,441 2,241 7.4 2 4.7 0.4 4 1.2
L&T FY20 1,460,368 236,535 108,942 16.2 7.5 18.1 2.2 2.5 1.2
Source: Company RHP, * NOTE: L&T and Godrej & Boyce are diversified businesses with several other business units. The financials of these companies represent all the business units under the company.
ANALYST KRChoksey Research Phone: +91-22-6696 5555, Fax: +91-22-6691 9576
Parvati Rai, head-research@krchoksey.com, +91-22-6696 5413 is also available on Bloomberg KRCS www.krchoksey.com
Thomson Reuters, Factset and Capital IQIndia Equity Research II IPO Note II 2nd Mar 2021 Page 8
MTAR Technologies Ltd
Financials:
Ratio Analysis (%) FY18 FY19 FY20 9MFY20 9MFY21
EBITDA Margin 20.0% 29.2% 27.1% 28.5% 29.9%
PAT Margin 3.4% 21.3% 14.7% 14.8% 15.8%
RONW 2.6% 17.8% 13.6% 9.4% 11.6%
ROCE 3.1% 18.6% 14.8% 10.0% 12.4%
Asset Turnover (x) 0.9 x 1.0 x 1.2 x 0.9 x 1.0 x
Debt/Equity (x) 0.1 x 0.1 x 0.1 x 0.1 x 0.3 x
Diluted EPS (INR) (Adjusted Post IPO) 1.8 12.9 10.3 7.4 9.2
Source: RHP
Income Statement (INR Mn) FY18 FY19 FY20 9MFY20 9MFY21
Revenue from Contracts – India 798 643 676 376 804
Revenue from Contracts – Outside India 784 1,134 1,409 1,109 938
Other Operating Revenue 14 59 53 37 31
Revenue from Operations 1,596 1,837 2,138 1,522 1,773
COGS 569 626 722 505 684
Gross profit 1,027 1,211 1,416 1,017 1,089
Employee cost 446 435 516 377 374
Other expenses 262 239 320 205 184
EBITDA 319 537 580 434 530
EBITDA Margin 20.0% 29.2% 27.1% 28.5% 29.9%
Other Income 9 22 44 11 7
Depreciation 112 112 120 91 93
EBIT 216 447 503 355 444
Interest expense 45 45 48 27 48
Exceptional Item 0 13 0 0 0
PBT 171 416 455 328 396
Tax 117 24 142 103 115
PAT 54 392 313 225 281
PAT Margin 3.4% 21.3% 14.7% 14.8% 15.8%
Basic EPS (INR) 1.9 13.9 11.7 8.4 9.9
Source: RHP
Cashflow Statement (INR Mn) FY18 FY19 FY20 9MFY20 9MFY21
Net cash flow from operating activities 144 421 562 347 -64
Net cash flow used in investing activities -13 -328 -121 -109 -160
Net cash flow generated from / (used in ) in financing activities -138 -75 -413 -325 199
Net increase / (decrease) in cash and cash equivalents (A+B+C) -7.0 19 28 -87 -25
Adjustment for Forex changes 0.0 -1.5 0.0 0.8 0.0
Opening Cash and cash equivalents 98 90.7 108 108 135
Closing Cash and cash equivalents 91 108 135 22 110
Source: RHP
ANALYST KRChoksey Research Phone: +91-22-6696 5555, Fax: +91-22-6691 9576
Parvati Rai, head-research@krchoksey.com, +91-22-6696 5413 is also available on Bloomberg KRCS www.krchoksey.com
Thomson Reuters, Factset and Capital IQIndia Equity Research II IPO Note II 2nd Mar 2021 Page 9
MTAR Technologies Ltd
Financials:
Balance Sheet (INR Mn) FY18 FY19 FY20 9MFY20 9MFY21
ASSETS
Property, plant and equipment 1,522 1,620 1,550 1,577 1,550
Capital work-in-progress 18 56 117 101 189
Intangible assets 0 1 1 1 9
Investment in subsidiary 0 0 0 0 0
Financial assets
Investments 0 0 0 0 0
Others 113 227 33 24 72
Non-current tax assets (net) 23 16 6 14 15
Other non-current assets 38 41 40 47 46
1,715 1,962 1,748 1,764 1,881
Current assets
Inventories 419 411 755 593 791
Financial assets
Trade receivables 490 504 616 589 731
Cash and cash equivalents 91 108 135 22 110
Bank balances other than cash and cash equivalents 0 0 97 96 105
Others 47 24 17 17 28
Other current assets 48 43 95 192 172
Total Current Assets 1,095 1,090 1,715 1,508 1,938
Total Assets 2,810 3,052 3,463 3,272 3,819
EQUITY AND LIABILITIES
Equity share capital 282 282 268 282 268
Other equity 1,773 2,068 1,983 2,110 2,189
Total 2,055 2,350 2,251 2,393 2,456
Financial liabilities
Borrowings 0 0 0 0 72
Provisions 30 6 24 4 33
Deferred tax liabilities (net) 88 0 53 41 99
118 6 77 45 204
Current liabilities
Financial Liabilities
Borrowings 198 287 291 160 583
Trade payables 136 60 306 199 145
Other financial liabilities 0 0 2 2 24
Provisions 13 8 34 25 26
Current tax liabilities (net) 0 12 9 0 0
Other current liabilities 290 329 492 449 381
Total Current Liabilities 637 696 1,135 835 1,159
Total Liabilities 2,810 3,052 3,463 3,272 3,819
Source: RHP
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Parvati Rai, head-research@krchoksey.com, +91-22-6696 5413 is also available on Bloomberg KRCS www.krchoksey.com
Thomson Reuters, Factset and Capital IQIndia Equity Research II IPO Note II 2nd Mar 2021 Page 10
MTAR Technologies Ltd
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