Demand outlook strong for next 4-5 years, may look at expansion: MTAR Technologies

Quantifying the orders, he said, “The company has already received an order of Rs 220 crore for the energy sector earlier and the demand for that is going up by another 1000 units for the next year. So, we are looking at almost Rs 290-300 crore right there. Apart from that, we have been asked to look at certain expansion plans on back of expectations of demand going up further in the coming three years. This is based on the new orders that our customer has received recently from the SK Group for about 500 megawatts, which translates to about 3000 additional units per year apart from the normal demand that we are having today.”

All this is encouraging and the demand looks strong for the next four or five years, said Reddy.

On orderbook, he said, “I would still continue with a guidance of Rs 700 crore for FY22 but what is happening is that there is an increase in the requirement of the units in clean energy sector and it is doubling for FY24 onwards and there is no downside to this. There can only be an upside. So that is something which is very encouraging. Our customers have asked us to plan for additional capex if required, to cater to that kind of demand.”

He further said, “We actually have enough capacities but with this kind of demand probably, we would need to add equipment in the bottleneck areas - probably need to add furnaces and this would not be more than Rs 30-35 crore.”

Talking about competition in the clean energy space, he said, “It is good that Reliance is in the sector. I don't look at the competition at this point in time. We need to focus on technology and move forward. It is a journey of five, seven years to actually achieve where we need to be in the hydrogen sector and to make it very cost-efficient, and that is what we all need to focus on and the rest will follow.”