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Beyond fuel cells; multiple growth engines taking shape

MTAR Technologies (MTAR) is a pioneer in precision-engineered products and solutions, with over five decades of manufacturing legacy and established capabilities across clean energy – civil nuclear, fuel cells, aerospace & defense (A&D), and other strategic sectors. We believe MTAR is entering a multi-year growth phase, scaling beyond fuel cells, as civil nuclear, A&D, data center infrastructure solutions, oil & gas, and space are expected to provide additional avenues for diversification.

* Bloom's opportunity is expanding beyond data centers into the broader AI infrastructure ecosystem. Bloom now has ~two dozen AI infrastructure customers with ~250MW contracted capacity, while its recent MiTAC partnership extends fuel cell adoption to AI-server manufacturing.

* Beyond fuel cells, India's nuclear build-out is creating a multi-year manufacturing cycle. The government is targeting 100GW by CY47, with 10 indigenous 700MW pressurized heavy-water reactor (PHWRs) approved. Based on our estimates, MTAR's product portfolio provides exposure to ~INR1.1–1.9b per 700MW PHWR reactor, implying a cumulative opportunity of ~INR195b over CY25-47.

* The company has forayed into the high-growth data center infra components segment, with an initial order of ~INR450m from SLB N.V. This has ~INR4-5b revenue potential post commercialization of the first article, with first-article qualification and conversion into long-term agreements (LTAs) serving as key triggers for scale-up.

* In A&D, multiple programs are moving from qualification to commercial production. It is expected to clock INR6-7b revenue in 3-4 years (INR2b in FY27) vs INR1b in FY26, supported by MNC customers including GKN, Thales, and IAI, alongside domestic Tejas/AMCA opportunities.

* O&G is emerging as a new export-led growth avenue, with MTAR developing Class-A components (precision-engineered products capable of operating under high-pressure and high-temperature environment) for SLB and a greenfield facility for Weatherford, targeted by Sep'26. Successful qualification and commercialization could unlock recurring global orders and increase wallet share with SLB across O&G and data center applications.

* Further, India's space economy could grow from ~USD8.4b to ~USD44b by CY33, and MTAR’s established ISRO qualifications provide an entry point into the rapidly growing private-space ecosystem. Over the past 4+ decades, MTAR has supplied critical products for Chandrayaan-3/Aditya-L1 and Gaganyaan.

* Overall, the company is moving from a concentrated precision-engineering supplier toward a broader multi-vertical manufacturing platform, with civil nuclear, A&D, data center infra components, and oil & gas creating multiple medium-term growth options beyond fuel cells. We estimate a revenue/EBITDA/PAT CAGR of 78%/98%/118% over FY26-FY28. We reiterate our BUY rating on the stock with a TP of INR9,000 (based on 60x FY28E EPS and translating into a ~0.5x PEG ratio on FY26-28E EPS CAGR).

Civil nuclear: From episodic reactor awards to a multi-year manufacturing cycle (FY26: Revenue mix 3%; order book mix 26%)

* India's planned nuclear expansion (100GW by CY47) is creating a multi-decade opportunity, with MTAR positioned across ~15 critical nuclear-island products. Based on our estimates, MTAR's product portfolio provides exposure to ~INR1.1–1.9b per 700MW PHWR reactor, implying a cumulative opportunity of ~INR195b over CY47.

* The new-build cycle has begun to materialize, evidenced by MTAR's INR5b Kaiga 5&6 order win, while Mahi Banswara and subsequent 700MW PHWR projects provide visibility for follow-on participation and higher share-of-wallet across future reactor programs.

* Refurbishment is adding a recurring revenue layer alongside reactor orders, reducing business lumpiness. With Kaiga execution, refurbishment inflows, and future PHWR projects progressing in parallel, MTAR's nuclear business is evolving into a more visible multi-year manufacturing cycle combining newbuild, refurbishment, and maintenance revenues.

Valuation and view

* MTAR has a strong order book of ~INR51.4b as of Jun’26, driven by a healthy pipeline across clean energy (fuel cells), A&D, nuclear sectors, and products & others. The commercialization of new products and onboarding of new clients across segments are expected to drive further growth. Incrementally, enhancing wallet share with existing customers will also accelerate growth. MTAR is foraying into new high-growth sectors, which will contribute meaningfully over the coming years. We anticipate these initiatives to translate into strong growth and margin expansion.

* The company targets 4-5x asset turns on incremental capex (INR5b by FY28), with ~70% of the investment directed toward the fuel cell segment. Fuel cell phase-2 expansion is expected to be commissioned by Sep-Oct'26, followed by a multi-fold phase-3 expansion by Mar'27. The current order book is expected to be executed over the next three years.

* We estimate a CAGR of 78%/98%/118% in revenue/EBITDA/adj. PAT over FY26-FY28. We reiterate our BUY rating on the stock with a TP of INR9,000 (based on 60x FY28E EPS and translating into a ~0.5x PEG ratio on FY26-28E EPS CAGR)

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