Underperforming defence player expects 60 percent revenue growth in FY23

In an interview with CNBC-TV18, the company's Managing Director Srinivas Reddy said that the defence indigenisation theme would provide a large opportunity for the company to grow in this industry.

Last month, the government published a new list of 780 components and sub-systems that will come under a phased import ban between December 2023 and December 2028.

"Our numbers are not linked to this defence indigenization program. This is something that will be a bonus for us. But it will be huge for sure. There is no second thought about that," he said.

MTAR Technologies provides testing of fueling machine columns, hydraulic cylinders, shuttle stations, engines, ball screws, and other components. The company's IPO became the first ever to be subscribed 200 times.

Six percent of MTAR's order book comes from the defence sector, with the majority belonging to the clean energy space.

Last year, the company received an order worth $30 million or nearly Rs 220 crore from Bloom Energy, USA. The order for Yuma Hot Boxes and associated components was supposed to be delivered over four quarters of this calendar year.

Reddy said that the company is currently engaged in mass production of electrolysers for the Bloom order and is also adding newer products. It is also adding a newer version of the Yuma Hot boxes that is part of the order.

Besides Bloom, MTAR has received orders from GE Renewables and is in talks with IRCON for more orders.

On the financial front, the company is looking at reducing inventory levels as supply chain issues begin to ease, albeit slowly. It aims to reduce working capital days to less than 200 from the current 250 days. Reddy maintained the company's FY23 margin guidance at 30 percent plus or minus 100 basis points.