Shares of Astra Microwave Products have exhibited consistent upward momentum, rising from its March 2023 low of ₹213.80 to its current trading price of ₹386.10, leading to an impressive gain of 80.60%. Long-term investors have been even more handsomely rewarded, with the stock skyrocketing by 310% in the last five years and an astounding 1034% over the past decade.
Astra Microwave Products has seen its shares maintain a steady upward momentum from the March 2023 low of ₹213.80 to trade at the current price of ₹386.10, translating into a stellar gain of 80.60%. For long-term investors, the stock even rewarded more returns as it skyrocketed 310% in the last five years and 1034% over 10 years.
Last week, the shares zoomed nearly 6.30% after the company won significant orders. It received an order worth Rs. 120.44 crore from DRDO for the supply of satellite sub-systems and airborne radar, while it also bagged an order from DPSU for the supply of radar and EW sub-systems, which is worth ₹20.8 crore.
In addition, it also secured an order from ISRO for the supply of satellite sub-systems and weather data processing systems, which are valued at ₹16.8 crore as reported in the company's regulatory filing.
Astra Microwave is engaged in the business of design, development, and manufacture of RF and Microwave Components, sub-systems, and systems used in defence, space, meteorology, and telecommunication.
On August 14, the company reported its Q1FY24 numbers, with its consolidated revenue from operations falling by 18% YoY to ₹133.73 crore. Its EBITDA dropped by 86% YoY, and its EBITDA margin fell to 2.20% in Q1 FY24 from 13.65% in the same period of last year.
The decrease in revenue was attributed to lower execution of domestic orders, while the weak margin was a result of the product mix. On account of higher depreciation and an increase in interest costs, the company reported a net loss to the tune of ₹4 crore in Q1FY24. During the same period of last it posted a net profit of ₹11 crore.
During the quarter the company received an order inflow of ₹190 crore, which included defence orders worth ₹160 crore, export orders worth ₹13 crore and meteorological orders worth ₹12 crore.
Its order book as of June 23 end stands at ₹1,580 crore, which is 2x FY23 sales and provides a promising outlook for the next 1.5 years, said domestic brokerage firm Geojit Financial Services.
The management's guidance remains consistent, projecting a ₹7,000 crore order inflow for FY24E–28E with a total addressable market of ₹25,000 crore. Going ahead, with the order execution mix shifting towards domestic orders (70% mix) over the next 2-3 years, the brokerage expects the EBITDA margin to be in the range of 21%.
Long-term prospects for the defence sector have improved significantly, as the government's focus is self-reliance to reduce the risk of dependency and bring down import bills instils the brokerage's positive stance.
Given the improving order pipeline and margin profile, the brokerage valued the stock at a P/E of 26x on FY25E and upgraded to an 'accumulate' rating with a target price of ₹403 apiece.
Another domestic brokerage firm, ICICI Securities, said the company's order potential is robust, and its solution-oriented approach is built on the twin planks of collaboration with external parties and internal competencies and may result in better margins.
Therefore, the brokerage kept its 'buy' rating on the stock with an unchanged target price of ₹425 apiece.
02 analysts polled by MintGenie on average have a 'strong buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.