Mtar Technologies Limited — Q4 FY25 earnings call

Call held 23 May 2025

Management summary

MTAR Technologies reported a robust Q4 FY25 performance with strong revenue and EBITDA growth, contributing to a 16.4% revenue increase for the full FY25. Despite a slight margin dip in FY25 due to project spillover, the company is optimistic about FY26, guiding for 25% revenue growth and 21% EBITDA margins, driven by diversification and increased wallet share. Significant improvements in operating cash flows and working capital management were also highlighted, alongside strong order inflows across key segments like aerospace & defense and clean energy.

Highlights

  • FY25 Revenue from operations grew 16.4% YoY to ₹676 crores.

  • FY25 EBITDA increased 7.2% YoY to ₹120.9 crores, with margins at 17.9%.

  • Q4 FY25 Revenue from operations grew 28.1% YoY to ₹183.1 crores.

  • Q4 FY25 EBITDA surged 87.5% YoY to ₹34.2 crores, with margins at 18.7%.

  • Order inflow for FY25 stood at ₹720 crores, including ₹178 crores from aerospace & defense and ₹349 crores from clean energy.

  • Operating cash flows significantly improved to ₹101.3 crores in FY25 from ₹57.4 crores in FY24.

  • Net working capital days reduced to 229 days in FY25, with a target to further reduce to 200 days in FY26.

  • Management guided for 25% revenue growth and 21% EBITDA margins (+/- 100 bps) for FY26.

Key financials

2 periods

Q4 FY25

  • Revenue from Operations
    ₹183.1 Cr
    YoY +28.1%
  • EBITDA
    ₹34.2 Cr
    YoY +87.5%
  • PAT
    ₹13.7 Cr
    YoY +182.7%

FY25

  • Revenue from Operations
    ₹676 Cr
    YoY +16.4%
  • EBITDA
    ₹120.9 Cr
    YoY +7.2%
  • EBITDA Margin
    17.9%
  • PAT
    ₹52.9 Cr
    YoY -5.7%

What they filed

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

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue190 174 183 157 136 −28%278 +60%306 +67%361 +130%
EBITDA37 33 34 28 17 −54%64 +94%62 +82%85 +204%
Net profit19 16 14 11 5 −74%35 +119%44 +214%50 +355%
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 Revenue (FY25)
₹677 Cr Total
  • Clean Energy ₹417 Cr 61.6%
  • Products and Other Verticals ₹148 Cr 21.9%
  • Aerospace and Defense ₹93 Cr 13.7%
  • Civil Nuclear ₹19 Cr 2.8%

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 25%
    In FY '26, we look forward to a 25% growth in revenues on a conservative note, with 21% EBITDA margins plus/minus 100 basis points.

    — Srinivas Reddy, Managing Director

  • Clean Energy Revenue Growth Revenue · FY26 · Medium confidence 15% to 20%
    We look forward to growth in clean energy at the rate of 15% to 20% in this sector including fuel cells, hydropower, battery storage systems and others.

    — Srinivas Reddy, Managing Director

  • Aerospace and Defense Revenue Growth Revenue · FY26 · High confidence 80%
    We anticipate a phenomenal growth of 80% from this sector in FY '26.

    — Srinivas Reddy, Managing Director

  • Civil Nuclear Revenue Revenue · FY26 · High confidence ₹60 crores
    We are in advanced stage of executing nuclear orders currently and look forward to deliver around Rs. 60 crores of orders in this sector in FY '26.

    — Srinivas Reddy, Managing Director

  • Products and Other Verticals Growth Revenue · FY26 · High confidence 20%
    We recorded Rs. 148 crores revenue in products and other verticals, and we expect a 20% growth in this segment as well.

    — Srinivas Reddy, Managing Director

  • Average Revenue Growth Revenue · next three years · High confidence 25%
    Our consistent revenue growth over the past five years demonstrates sustained growth momentum and we remain confident in our ability to maintain this growth trajectory with an average growth of 25% year-on-year over the next three years due to multiple growth engines across various sectors.

    — Srinivas Reddy, Managing Director

Margin

  • EBITDA Margins Margin · FY26 · High confidence 21% plus/minus 100 basis points
    In FY '26, we look forward to a 25% growth in revenues on a conservative note, with 21% EBITDA margins plus/minus 100 basis points.

    — Srinivas Reddy, Managing Director

  • EBITDA Margins Margin · FY26 · Medium confidence Sequential improvement
    We anticipate a sequential improvement in EBITDA margins in FY '26 due to operating leverage and scale-up in production of new products developed over the past couple of years.

    — Srinivas Reddy, Managing Director

Working Capital

  • Net Working Capital Days Working Capital · FY26 · High confidence 200 days

    Previously 229 days → 200 days

    When it comes to working capital, the net working capital to revenue stood at 229 days in FY '25. And also, we would like to further try to reduce working capital for FY '26 to 200 days.

    — Gunneswara Rao Pusarla, Chief Financial Officer

  • Working Capital Days Working Capital · FY27 · Medium confidence 175 days

    Previously 229 days → 175 days

    175 is a long-term goal, it cannot happen immediately... Yes, FY '27. See, the moment we have the operating leverage and growth, we are expecting 25% year-on-year, and we are working closely on the receivables and inventory levels, definitely that number can be achievable.

    — Gunneswara Rao Pusarla, Chief Financial Officer

Debt

  • Long-term Debt Repayment Debt · FY26 · High confidence ₹46 crores
    So the repayment obligation for FY '26 is at Rs. 46 crores. 80% of the long-term debt whatever we have we are repaying by FY '27.

    — Gunneswara Rao Pusarla, Chief Financial Officer

  • Long-term Debt Repayment Debt · FY27 · High confidence 80%
    80% of the long-term debt whatever we have we are repaying by FY '27. Balance will be in the next one-two years we are repaying.

    — Gunneswara Rao Pusarla, Chief Financial Officer

Order Inflow

  • Nuclear Order Inflow Order Inflow · next 1-2 quarters · Medium confidence ₹700-800 crores
    So, we are looking at anywhere between, I do not want to spell out individual numbers because of certain confidentiality, but we are looking at around Rs. 700 crores to Rs. 800 crores of orders flowing in over the next one, two quarters.

    — Srinivas Reddy, Managing Director

Capex

  • Capital Expenditure Capex · FY26 · High confidence ₹50-60 crores
    See, right now, this year the basic minimum bottleneck areas, we are looking at about Rs. 50 crores to Rs. 60 crores of CapEx going in.

    — Srinivas Reddy, Managing Director

Risks & concerns

  • Project execution delays (domestic semi-cryo engines)

    medium

    Certain corrections and design changes led to a spillover of execution of new projects in aerospace and defense to Q1 FY26.

    Management acknowledged

  • Delays in nuclear order booking

    medium

    Order booking for Kaiga 5 & 6 and reactor refurbishments got deferred, but paperwork has started moving for substantial orders in FY26.

    Management acknowledged

  • Temporary pause on export shipments due to US tariffs

    low

    A 90-day pause was released, and the situation became normal; factored into FY26 guidance.

    Management acknowledged

Areas of evasion (2)

  • Specific numbers for hot box cost due to customer confidentiality
  • Specific details on electrolyzer orders beyond current status

Q&A highlights

3 direct
Nuclear Segment Growth and Order Inflow for FY26 Direct
To add to your point, like from Rs. 19 crores what we have done in FY '25, we are expecting to do Rs. 60 crores in FY '26. That is also whatever orders we are having in hand... So, we are looking at least around Rs. 700-plus crores of orders flowing in from nuclear division.

Clarifies the immediate revenue expectation for nuclear in FY26 (₹60 crores) vs. the much larger potential order inflows (₹700-800 crores) that are not yet factored into the current FY26 business plan, indicating significant future growth potential.

Asked by Vipraw Srivastava

Impact of US Tariffs and Q4 FY25 Spillover Direct
No. Basically, what I can say is that, one is the spillover is one on the domestic side. Because if you remember, we are working on the semi-cryo engines which there have been certain corrections, certain design changes, so now we are trying to finalize that. But more or less, there has been a little bit of a pause on certain export shipments as well because, if you remember, the April 2nd announcement by the United States on tariffs.

Explains the reasons behind the Q4 FY25 project spillover (domestic design changes, temporary tariff-related pause on exports) and assures that these factors have been considered in the conservative FY26 guidance.

Asked by Meet Jain

Decline in Gross Margins from 2020-21 to FY25 Direct
It's basically the product mix, right? So, earlier the gross margins for the clean energy segment are lower, the volumes are higher, the operating leverage is much better. But if you look at the way we are moving forward, we have diversified into the aerospace and defense sectors in a big way where the margins are much higher.

Addresses a significant concern about margin compression, attributing it to a shift in product mix towards higher volume, lower-margin clean energy products, while also highlighting the higher margins in growing aerospace and defense segments.

Asked by Ayush Bansal

3 min read 7 chapters

Detailed narrative

Q4 & FY25 Financial Performance Overview

MTAR Technologies reported a strong Q4 FY25 with revenue from operations increasing 28.1% YoY to ₹183.1 crores and EBITDA surging 87.5% YoY to ₹34.2 crores. For the full fiscal year 2025, revenue from operations grew 16.4% YoY to ₹676 crores, marking the highest-ever turnover. EBITDA for FY25 increased 7.2% YoY to ₹120.9 crores, with margins at 17.9%. Profit after tax for FY25 was ₹52.9 crores, a 5.7% decrease YoY, primarily due to project execution spillover to Q1 FY26.

Segmental Growth and Order Inflow

The company secured orders worth ₹720 crores in FY25, with significant contributions from aerospace & defense (₹178 crores) and clean energy (₹349 crores). Clean energy delivered ₹417 crores in revenue in FY25, while aerospace and defense contributed ₹93 crores. The civil nuclear sector recorded ₹19 crores in revenue, and products and other verticals generated ₹148 crores. Management expects substantial order inflows of ₹700-800 crores from the nuclear division over the next 1-2 quarters, primarily from reactor refurbishment and new projects.

FY26 Outlook and Margin Guidance

MTAR Technologies projects a conservative 25% revenue growth for FY26, with EBITDA margins targeted at 21% plus/minus 100 basis points, anticipating sequential improvement. Segment-wise, clean energy is expected to grow 15-20%, aerospace and defense a phenomenal 80%, and products and other verticals 20%. The civil nuclear sector is projected to deliver ₹60 crores in revenue for FY26. The company aims for an average annual growth of 25% over the next three years, driven by diversification and increased wallet share with existing clients.

Working Capital and Debt Management

Operating cash flows saw a significant improvement, reaching ₹101.3 crores in FY25 compared to ₹57.4 crores in FY24. Net working capital days were reduced to 229 days in FY25, with a target to further decrease this to 200 days in FY26 and a long-term goal of 175 days by FY27. The company also strengthened its financial position by reducing long-term debt by ₹15 crores, bringing it down from ₹142.5 crores to ₹127 crores, with a repayment obligation of ₹46 crores for FY26.

Strategic Focus and Product Development

MTAR is actively expanding its product base and customer portfolio, having successfully executed proto units and first articles for various multinationals. The company is working on increasing wallet share with existing clean energy customers and developing new products like roller screws (100% import substitute) and electromechanical actuators for defense. The new unit commissioned in FY25 is expected to drive exponential growth in aerospace and defense, supported by 'Make in India' initiatives and export interest.

Nuclear Sector Opportunities

The civil nuclear sector is poised for substantial growth, with MTAR being a pre-qualified vendor for NPCIL. The company is in advanced stages of executing nuclear orders and expects to deliver ₹60 crores in FY26. Tenders for refurbishment of five reactors (including Tarapur, Kaiga, Rajasthan, and Madhya Pradesh) are anticipated, along with orders from the private entity MEIL for Kaiga 5 & 6 reactors. Budgetary quotes for 220 megawatts Bharat Modular Reactors have also been provided, indicating long-term potential.

Gross Margin Evolution and Product Mix

Management addressed the decline in gross margins from 67-68% in 2020-21 to 47-48% in FY25, attributing it primarily to product mix. Clean energy segments, while having higher volumes and better operating leverage, typically have lower gross margins. The company's diversification into aerospace and defense, which offers much higher margins, is expected to lead to improved gross margins as volume production scales up in these segments over the next few years.

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