Astra Microwave product offering a good investment opportunity in the less penetrated defence sector by private sector companies.This Hyderabad based company is one of the very few listed players concentrating in this sector.Company manufacturing various Radio Frequency and Microwave based products for sectors like Defence,Telecom,Space..etc.Its product list includes different types of Radars,Modulators,Transmitters and Amplifiers.It is a one of the very few reliable Indian suppliers of such products to Public sector companies operating in defense and space sector in India like BEL and ISRO. Using their strong R&D AMP indigenously developed and supplied many critical parts of India’s first radar Imaging Satellite (RISAT-1) which launched in 2012. Company also having strong business relations with overseas defence and space sector players. AMPL is working on a wide variety of important and high-tech defence projects such as Airborne Early Warning and Control (AEW&C) programme of DRDO, various ground and air-based radar programmes for Indian armed forces, sub-systems for Akash and Astra missiles, and Unmanned Aerial Vehicles (UAVs) like Nishant and Rustom.
Companies strong relations with ISRO and DRDO as a reliable supplier in a quality quotient industry creates a niche status for this company.Last year company received one high value order worth Rs.350 Cr from an overseas customer for supply of microwave sub systems.In fact it is one of the largest orders placed by a foreign company to an Indian private sector company in defence sector.We can take it as a testimony for the quality of the products supplied by AMP.
Indian defence sector is expected to open up for private sector players in a big way going forward.Companies like L&T ,Mahindra..etc are scouting plans to tap the upcoming opportunities in this sector.With less than 25% promoter stake AMP is really a potential take over target for any serious player in this sector. In the past many rumors are there in the market connected with a possible take over by L&T,Mahindra ,BEL ..etc. L&T already acquired close to 10 % stake in AMP. Presence of some private equity investors and mutual funds makes it vulnerable as an easy take over target .One such investor is reducing their stake through open market sales but on the other side ,promoters are very aggressively hiking their stake in past few weeks through open market purchases.Whether there is a take over in future or not ,there is nothing much to loose at CMP of Rs.35.Company having very good order book position of Rs.1025 cr which is almost 5 times of company’s last year turnover.Such kind of a visibility is very rare in these days of recession. I hope ,share price will move to the next orbit once the supply from this single source ends .Recommending a BUY at CMP of Rs.35 with a long term view.Stock listed both in NSE and BSE
Link to company Website HERE
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