Concall AI

Mtar Technologies Limited — Q3 FY25 earnings call

Call held 11 Feb 2025

Management summary

MTAR Technologies delivered a strong Q3 FY25 performance with robust revenue and profit growth, driven by increased execution and improved operating leverage. The company secured substantial new orders, particularly in Clean Energy and Aerospace, bolstering its order book. Management expressed confidence in future growth, outlining clear targets for revenue expansion and margin improvement over the next three fiscal years, supported by strategic initiatives and new facility commissioning.

Highlights

Revenue from operations stood at INR 174.5 crores in Q3 FY25, reflecting a 47.4% year-on-year growth.
EBITDA increased by 39.4% year-on-year to INR 33.3 crores in Q3 FY25, with margins at 19.1%.
Profit After Tax (PAT) grew 52.8% year-on-year to INR 16 crores in Q3 FY25.
Received significant orders of over INR 400 crores in Clean Energy and Aerospace, bringing FY25 YTD order inflow to INR 817 crores.
Generated a positive operating cash flow of INR 102 crores in Q3 FY25, significantly higher than FY24's total annual cash flow.
Net working capital days improved to 222 days by the end of Q3 FY25, in line with targets.
Projecting 30% revenue growth for FY26 and an EBITDA margin of 24% for FY26, stabilizing at 28% by FY28.

Key financials

01 Revenue from Operations ₹174.5 Cr +47.4%YoY
02 EBITDA ₹33.3 Cr +39.4%YoY
03 EBITDA Margin 19.1%
04 Profit Before Tax ₹21.4 Cr +66.3%YoY
05 Profit After Tax ₹16 Cr +52.8%YoY
06 Operating Cash Flow ₹102 Cr
07 Net Working Capital Days 222 days
08 Long-term Debt ₹132.5 Cr
09 Cash Balance ₹25 Cr

What they filed

Q1 FY27: revenue up 129.9%, net profit up 354.5% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	190	174	183	157	136 −28%	278 +60%	306 +67%	361 +130%
Expenses	154	141	149	128	119	214	244	276
EBITDA	37	33	34	28	17 −54%	64 +94%	62 +82%	85 +204%
Margin	19%	19%	19%	18%	13%	23%	20%	24%
Other income	2	3	0	1	4	-1	17	8
Interest	5	6	6	6	6	8	10	16
Depreciation	8	9	10	8	9	9	9	9
Profit before tax	25	22	19	15	6 −76%	46 +109%	60 +216%	68 +353%
Tax rate	26%	25%	25%	26%	24%	24%	26%	25%
Net profit	19	16	14	11	5 −74%	35 +119%	44 +214%	50 +355%
EPS	6.11	5.31	4.62	3.65	1.49	11.43	14.42	16.42

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of YTD Execution

₹480.2 Cr Total

Clean Energy Fuel Cells ₹304 Cr 63.3%
Products Vertical ₹100 Cr 20.8%
Space (ISRO) ₹24 Cr 5.0%
MNC Aerospace ₹24 Cr 5.0%
Civil Nuclear Power ₹16 Cr 3.3%
Defence ₹12.2 Cr 2.5%

Guidance & targets

Revenue

Overall Revenue Revenue · FY25 · High confidence INR 700 crores-plus

forward for a very strong Q4 as well and falling in line with the guidance given by us with INR700 crores-plus revenues overall

— Srinivas Reddy, Managing Director and Promoter
Overall Revenue Growth Revenue · FY26 · High confidence 30%

we predict a 30% revenue growth in FY '26 and similarly an equivalent kind of growth moving forward for the next 2 years as well

— Srinivas Reddy, Managing Director and Promoter

Margin

EBITDA Margin Margin · FY25 · High confidence 21% plus minus 100 basis points

with EBITDA of 21% plus minus 100 basis points for FY '25.

— Srinivas Reddy, Managing Director and Promoter
EBITDA Margin Margin · Q4 FY25 · High confidence 24% plus minus 100 basis points

EBITDA margin of 24% for Q4 is what we're looking at is plus minus 100 basis points.

— Srinivas Reddy, Managing Director and Promoter
EBITDA Margin Margin · FY26 · High confidence 24%

starting with 24% for next year FY '26

— Srinivas Reddy, Managing Director and Promoter
EBITDA Margin Margin · FY27 · High confidence 26%

moving on to 26% in FY '27

— Srinivas Reddy, Managing Director and Promoter
EBITDA Margin Margin · FY28 · High confidence 28%

ending up with a FY '28 at 28% EBITDA percentage

— Srinivas Reddy, Managing Director and Promoter

Revenue - Clean Energy

Fuel Cells Revenue Revenue - Clean Energy · FY26 · High confidence More than INR 430 crores

We expect to execute more than INR430 crores in fuel cells moving forward for the next year

— Srinivas Reddy, Managing Director and Promoter
Hot Boxes Sales Revenue - Clean Energy · FY26 · High confidence INR 470-500+ crores

almost close to about INR500 crores plus in terms of sales that we will be doing with respect to Clean Energy for the next year. The hot boxes would be close to about INR470 crores and all for next year.

— Srinivas Reddy, Managing Director and Promoter

Execution - Aerospace

MNC Aerospace Orders Execution Execution - Aerospace · Q4 FY25 · High confidence INR 25 crores

We expect to deliver another INR25 crores of orders for MNC aerospace

— Srinivas Reddy, Managing Director and Promoter
MNC Aerospace Execution Execution - Aerospace · FY26 · High confidence INR 145 crores

We are projecting around INR145 crores of executions in MNC aerospace

— Srinivas Reddy, Managing Director and Promoter

Execution - Space

ISRO Orders Execution Execution - Space · Q4 FY25 · High confidence INR 15 crores

and INR15 crores of orders for ISRO in Q4.

— Srinivas Reddy, Managing Director and Promoter
ISRO Execution Execution - Space · FY26 · High confidence INR 50 crores

and around INR50 crores of executions for ISRO in FY '26

— Srinivas Reddy, Managing Director and Promoter

Execution - Civil Nuclear

Civil Nuclear Power Orders Execution Execution - Civil Nuclear · Q4 FY25 · High confidence INR 30 crores

we expect to execute around INR30 crores of orders in Q4.

— Srinivas Reddy, Managing Director and Promoter
Civil Nuclear Power Orders Execution Execution - Civil Nuclear · FY26 · High confidence INR 75 crores

The execution of FY '26 is projected to be around INR75 crores

— Srinivas Reddy, Managing Director and Promoter

Execution - Defence

Defence Annual Execution Execution - Defence · FY25 · High confidence INR 30 crores

annual execution is estimated to be around INR30 crores.

— Srinivas Reddy, Managing Director and Promoter
Defence Execution Execution - Defence · FY26 · High confidence INR 40 crores-plus

We project around INR40 crores-plus of execution in FY '26 as well.

— Srinivas Reddy, Managing Director and Promoter

Revenue - Products Vertical

Products Vertical Revenues Revenue - Products Vertical · Q4 FY25 · High confidence INR 30 crores

We expect another INR30 crores of revenues from products in Q4 FY '25.

— Srinivas Reddy, Managing Director and Promoter
Products Vertical Revenues Revenue - Products Vertical · FY26 · High confidence INR 170-180 crores

This vertical is projected to record revenues of more than INR170 crores to INR180 crores in FY '26.

— Srinivas Reddy, Managing Director and Promoter

Order Inflow - Nuclear

Nuclear Orders (Kaiga 5&6 + Refurbishment) Order Inflow - Nuclear · next 6 months · High confidence INR 1000 crores

overall, we're expecting close to 1000 Crs of orders, in history, it never happened, but finally, it's happening now. Close to about INR1,000 crores of orders, which can flow into MTAR over the next 6 months.

— Srinivas Reddy, Managing Director and Promoter

Revenue - Oil & Gas

Volume Production Revenue Revenue - Oil & Gas · FY27 · High confidence INR 150-180 crores

translate into a volume production from FY '27, partly in FY '26, but mostly in FY '27, close to about INR150 crores to INR180 crores in the first year, FY '27.

— Srinivas Reddy, Managing Director and Promoter
Volume Production Revenue Revenue - Oil & Gas · FY28 · High confidence INR 250 crores

And then we move on to close to about INR250 crores in FY '28.

— Srinivas Reddy, Managing Director and Promoter

Revenue - Battery Storage

Volume Production Revenue Revenue - Battery Storage · FY27 · Medium confidence INR 2-3 crores plus

But we will see the real ramp up happening, which will be close to about INR2 crores, INR3 crores plus in FY '27, with respect to the battery storage systems as well.

— Srinivas Reddy, Managing Director and Promoter

Working Capital

Net Working Capital Days Working Capital · FY27 onward · Medium confidence 175 days

we wanted to reduce to 175 days, so maybe FY '27 onward

— Gunneswara Rao, Chief Financial Officer

Debt

Debt Repayment Obligation Debt · FY26 · High confidence INR 46 crores

The total repayment obligation for FY '26 stands at INR46 crores.

— Gunneswara Rao, Chief Financial Officer
New Debt for Oil & Gas and other areas Debt · next year (FY26) · High confidence INR 60-80 crores

next year, we are planning to take a debt of around INR60 crores to INR80 crores for the oil and gas and other areas

— Gunneswara Rao, Chief Financial Officer
Incremental Debt Debt · next year (FY26) · High confidence INR 25-30 crores

incremental debt may be INR25 crores or INR30 crores next year.

— Gunneswara Rao, Chief Financial Officer

Capex

Oil & Gas Facility Capex Capex · next 9 months · High confidence INR 60-80 crores

around INR60 crores to INR80 crores of capex required to set up at 100%. But that is not going to be incurred in a same immediately next financial year, starting of the financial year. So over the next 9 months, we will incur that money.

— Gunneswara Rao, Chief Financial Officer

Risks & concerns

Project execution delays for fast-track nuclear projects
medium

Management highlighted the importance of execution time for Kaiga 5 & 6 due to fast-track nature and potential Liquidated Damages (LDs) for main contractors.

Management acknowledged
Working capital intensity due to various sectors and credit terms
medium

Management acknowledged that 200 working capital days are required due to various projects and increased revenue, but they aim to reduce it to 175 days by FY27.

Management acknowledged
Forex fluctuation impacting import content
low

Management noted they are trying to localize materials to mitigate forex fluctuation impact, especially for materials like Inconel.

Management acknowledged

Q&A highlights

3 direct

Timing and size of nuclear orders (Kaiga 5&6 and refurbishment reactors) Direct

overall, we're expecting close to 1000 Crs of orders, in history, it never happened, but finally, it's happening now. Close to about INR1,000 crores of orders, which can flow into MTAR over the next 6 months.

Reveals a significant potential order inflow of INR 1000 crores from the nuclear sector, providing a strong growth pipeline for the next 6 months.

Asked by Vipraw Srivastava

Impact of DeepSeek on Bloom Data Center business Direct

Absolutely not. And I have not heard anything of that. In fact, not only they are looking at improved volumes, which they will keep updating us from time to time. And also, we are increasing our wallet share within -- we're moving it to the assembly mode as well with that.

Addresses a potential market concern regarding a key customer's business, reassuring investors that Bloom Energy's data center segment is not negatively impacted and volumes are expected to improve.

Asked by Nikhil Agrawal

Working capital days and future debt levels Direct

our working capital days for this as of December is 222 days and we have projected around 225 days by end of this financial year. We are trying our best to reduce the inventory levels, increase the payable days. ... we wanted to reduce to 175 days, so maybe FY '27 onward.

Provides clarity on the company's working capital management strategy and targets, along with details on current debt levels and future capex funding plans.

Asked by Sahil Vohra

3 min read 7 chapters

Detailed narrative

Q3 FY25 Financial Performance Overview

MTAR Technologies reported a robust Q3 FY25, with revenue from operations growing 47.4% year-on-year to INR 174.5 crores, up from INR 118.4 crores in Q3 FY24. EBITDA increased by 39.4% to INR 33.3 crores, achieving an EBITDA margin of 19.1%. Profit After Tax (PAT) saw a significant jump of 52.8% year-on-year, reaching INR 16 crores. The company also generated a strong positive operating cash flow of INR 102 crores in Q3 FY25, outpacing the total annual cash flow of FY24.

Strong Order Inflow and Book Position

The company received significant new orders totaling over INR 400 crores in the Clean Energy and Aerospace sectors, contributing to a year-to-date order inflow of INR 817 crores for FY25. The closing order book for the Space and MNC Aerospace segment stood at INR 187 crores at the end of Q3. Management anticipates a substantial inflow of approximately INR 1000 crores in nuclear orders (Kaiga 5 & 6 and 5 refurbishment reactors) over the next 6 months, which is unprecedented for the company.

Clean Energy Segment Outlook

In the Clean Energy fuel cells division, MTAR executed orders worth INR 304 crores year-to-date for Bloom Energy. The company expects to execute over INR 430 crores in fuel cells for FY26, with an upside potential from AEP orders. For hot boxes, sales are projected to be in the range of INR 470-500+ crores for FY26. Additionally, MTAR is progressing with proto units for Fluence Energy's battery storage systems, with volume production of INR 2-3 crores plus expected by FY27.

Aerospace & Defence Sector Expansion

MTAR continues to witness phenomenal growth in Space and MNC Aerospace. Year-to-date execution for ISRO and MNC Aerospace stood at INR 24 crores each. For Q4 FY25, the company expects to deliver INR 25 crores for MNC aerospace and INR 15 crores for ISRO. Looking into FY26, projections include INR 145 crores from MNC aerospace and INR 50 crores from ISRO. The new aerospace plant is expected to be commissioned by the end of February 2025, supporting a significant ramp-up in volume production from FY26, especially for MNC aerospace.

Civil Nuclear Power and Products Vertical Growth

The Civil Nuclear Power segment executed INR 16 crores year-to-date, with an expectation of INR 30 crores in Q4 FY25 and INR 75 crores in FY26. The Defence segment recorded INR 12.2 crores year-to-date, with an estimated annual execution of INR 30 crores for FY25 and over INR 40 crores for FY26. The Products vertical achieved INR 100 crores in year-to-date execution, with an additional INR 30 crores expected in Q4 FY25, and is projected to reach INR 170-180 crores in FY26.

Financial Health and Working Capital Management

The company's long-term debt reduced to INR 132.5 crores by Q3 FY25, with a repayment obligation of INR 46 crores for FY26. Operating cash flow was robust at INR 102 crores, and net working capital days improved to 222 days, aligning with the company's target. Management aims to further reduce working capital days to 175 by FY27 onward. A capex of INR 60-80 crores is planned for a new Oil & Gas facility over the next 9 months, with a similar amount of debt expected to be taken for this expansion in FY26.

Long-term Growth and Margin Expansion Targets

MTAR Technologies is projecting a consistent 30% year-on-year revenue growth for the next three years (FY26-FY28). This growth is expected to be accompanied by progressive EBITDA margin improvement: 24% for FY26, 26% for FY27, and stabilizing at 28% by FY28. These targets are underpinned by diversification into new sectors like Oil & Gas (projected INR 150-180 crores in FY27, INR 250 crores in FY28) and volume production for MNC customers, leveraging operating leverage and a strengthened product portfolio.

This is an AI-generated summary of a publicly available earnings call transcript.

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