ICICI Securities Bullish on Astra Microwave Products, Sees Healthy Growth Ahead
Astra Microwave Products (AMPL), a leading Indian defence company, is well-placed for healthy growth led by strong sector tailwinds, according to ICICI Securities.
Key Drivers of Growth:
- Government’s focus on indigenisation
- Increasing usage of electronics in defence and space
- Strong order backlog and healthy orders pipeline
- Execution of high-margin domestic orders
Financial Projections:
ICICI Securities has estimated AMPL’s revenue, EBITDA, and PAT to grow compounded annually at 15.5%, 26.3%, and 46.7% respectively over FY23-25.
Recommendation:
The brokerage firm has recommended ‘buying’ shares of AMPL with a target price of Rs 510 per share based on 32 times FY25 Earnings Per Share (EPS).
Order Book Outlook:
AMPL’s order book position stands healthy at Rs 1,580 crore as of June 2023 end, which is 1.9 times its FY23 revenue.
Government Support:
The government’s commitment to invest heavily in the defence and space industries, decrease reliance on foreign imports, and boost local production by using homegrown materials and components is expected to lead to a significant increase in future orders for AMPL, both within the country and for international exports.
Execution Improvement:
The overall execution is expected to improve as the risk of supply chain issues recedes with increase in domestic procurement of raw materials and sub-components.
Key Strengths:
AMPL has expertise in microwave and radio frequency technology, manufactures a wide range of advanced equipment, and has strong in-house capabilities for order execution.
Related News
- 21 Sep
SJVN shares tank 9% on OFS launch at deep discount
SJVN shares tanked 9% in early trade on September 21 after the government launched an OFS for up to 4.92% equity stake at a deeply discounted floor price of Rs 69 per share, a 15% discount to the previous closing price. The OFS opens for non-retail investors on September 21 and for retail investors on September 22.
- 21 Sep
Sheela Foam shares jump on QIP launch
Sheela Foam shares jumped nearly 2% on September 21 as the company launched its proposed QIP to fund its acquisition of Kurlon. The floor price for the QIP issue is Rs 1,133.99 per share. Promoters hold the majority 72.95% stake in the company. Sheela Foam stock has delivered a return of 7.14% over the last six months.
- 21 Sep
Infosys Stock Down Despite Partnership with NVIDIA for Generative AI Tools
Infosys stock fell nearly 1% on September 21, despite the company's announcement of a partnership with NVIDIA to build generative AI tools for businesses. The partnership will see Infosys integrate NVIDIA's AI Enterprise ecosystem into its AI-first offering Topaz and train 50,000 employees on NVIDIA's AI technologies. NVIDIA also announced partnerships with Reliance and the Tata Group in early September. The partnerships will focus on providing AI supercomputer technologies, developing and processing generative AI applications, and upskilling employees in AI.
- 20 Sep
Aviation sector faces double whammy of high oil prices and low passenger traffic in Q2FY24
The aviation sector is facing a double whammy of high crude oil prices and declining passenger traffic in Q2FY24. This could impact aviation companies' near-term profitability if they do not have the right pricing power mix. Analysts at Kotak believe that the shift to international travel could limit pressure on yields, especially for Indigo, which dominates 63% of the domestic market share. However, analysts at IDBI Capital suggested investors warrant caution on the overall sector in the near-term. The aviation sector is facing a double whammy of high crude oil prices and declining passenger traffic in Q2FY24. This could impact aviation companies' near-term profitability if they do not have the right pricing power mix. Analysts at Kotak believe that the shift to international travel could limit pressure on yields, especially for Indigo, which dominates 63% of the domestic market share. However, analysts at IDBI Capital suggested investors warrant caution on the overall sector in the near-term. The aviation sector is facing a double whammy of high crude oil prices and declining passenger traffic in Q2FY24. This could impact aviation companies' near-term profitability if they do not have the right pricing power mix. Analysts at Kotak believe that the shift to international travel could limit pressure on yields, especially for Indigo, which dominates 63% of the domestic market share. However, analysts at IDBI Capital suggested investors warrant caution on the overall sector in the near-term.
- 20 Sep
PSU stocks rally may pressure government for disinvestment
PSU stocks have rallied in recent times, which could pressure the government to disinvest in these companies in the run up to the 2023 state elections and 2024 general elections. The government may need to boost social spending ahead of the elections, which could lead to a sharp increase in expenses. A PSU rally could raise the chances of disinvestment in the near-term, as the government would need to raise funds to meet these expenses. Jefferies is cautious on the overall markets for the near-term, given higher global yields, rising crude prices, and rich valuations. They have trimmed weight on mid-cap industrial and property plays and shifted focus toward
Leave a Reply