- Q3 EBITDA jumped 93% YoY, propelling MTAR's earnings outlook.
- Order book surged 2.3x YoY, driven by nuclear and fuel‑cell inflows.
- Motilal Oswal projects a 78% CAGR in adjusted PAT through FY28.
- Target price of INR 3,900 implies a 40x FY28 EPS multiple and a sub‑1.0 PEG.
- Sector tailwinds and peer gaps could turn MTAR into a growth leader.
Most investors missed the Q3 earnings flash – and that could cost them big.
MTAR Technologies' Revenue Explosion: 59% YoY Growth Explained
In the September quarter, MTAR Technologies reported revenue of INR 9.2 billion, up 59% from the same period last year. The lift came from every vertical in its portfolio – nuclear components, fuel‑cell modules, and industrial products – indicating that the company is not relying on a single lucky horse. For context, revenue growth at this magnitude is rare in the capital‑intensive equipment space, where order cycles often stretch over multiple years.
Order Book Surge: 2.3x YoY Growth and What It Means for Supply Chains
The order book ballooned to INR 23.95 billion, a 2.3‑times increase YoY and an 85% jump QoQ. Roughly INR 13.7 billion of that backlog is fresh inflow, split across three high‑margin segments: nuclear (INR 5 billion), fuel cells (INR 4.6 billion), and product sales (INR 1.4 billion). A larger order book not only guarantees revenue visibility for the next 12‑18 months but also gives the firm leverage to negotiate better terms with suppliers, potentially improving gross margins.
Nuclear and Fuel Cell Segments: The New Engines of Growth
India’s nuclear power capacity roadmap aims for 22 GW by 2032, up from 6.8 GW today. MTAR, a key supplier of reactor components, stands to capture a sizable share of the upcoming procurement wave. Simultaneously, the Indian government’s push for green hydrogen has accelerated fuel‑cell adoption, adding another growth catalyst. The INR 5 billion nuclear inflow and INR 4.6 billion fuel‑cell inflow in Q3 are early signals that the company is already positioned to ride these macro trends.
Sector Context: How the Indian Energy Equipment Market Is Evolving
The broader energy‑equipment sector is in the midst of a structural shift. Traditional thermal‑plant gear is plateauing, while renewable‑linked hardware—especially for nuclear, solar, and hydrogen—gains traction. Analysts estimate a compound annual growth rate (CAGR) of 12‑15% for the sector through FY28. MTAR’s projected CAGR of 40% in revenue and 78% in adjusted profit after tax (PAT) far outpaces the industry, suggesting that its growth is not just riding the wave but helping to create it.
Peer Comparison: MTAR vs Tata Power and Adani Green in the Same Space
While Tata Power and Adani Green dominate generation, they are still building their equipment procurement capabilities. MTAR, by contrast, is a pure‑play equipment supplier with a diversified product basket. Tata’s equipment arm showed a modest 12% revenue rise YoY, and Adani’s procurement segment grew 8% YoY. MTAR’s 59% surge, therefore, represents a clear differentiation in execution speed and market capture.
Valuation Deep‑Dive: 40x FY28E EPS and a 0.7x PEG – Reasonable or Overpriced?
Motilal Oswal’s target price of INR 3,900 translates to a forward price‑to‑earnings (P/E) multiple of roughly 40× for FY28 earnings. At first glance, 40× looks lofty, but the PEG ratio—price/earnings to growth—falls to 0.7×, indicating that the price is justified when the expected earnings growth is taken into account. A PEG below 1 is generally considered undervalued relative to growth prospects. Moreover, the company’s adjusted PAT CAGR of 78% dwarfs the sector average, providing a solid cushion against valuation compression.
Investor Playbook: Bull and Bear Cases for MTAR Technologies
Bull Case: Continued policy support for nuclear and hydrogen accelerates order inflows, pushing the order book above INR 30 billion by FY26. EBITDA margins expand from the current 22% to 28% as scale economies kick in, delivering EPS growth that validates the 40× FY28 multiple. The stock could appreciate 40‑60% from current levels.
Bear Case: Execution delays in nuclear projects or regulatory setbacks for fuel cells stall new orders. If the order book growth stalls below 30% YoY, EBITDA margins could compress under 20%, causing EPS to fall short of forecasts. In that scenario, the stock may retrace 20‑30%.
Investors should monitor three leading indicators: (1) the pace of new nuclear contracts awarded by the Department of Atomic Energy, (2) government tenders for hydrogen‑fuel‑cell infrastructure, and (3) MTAR’s quarterly margin trajectory. Aligning your exposure with these signals can help you capture upside while protecting against downside surprises.