Multibagger smallcap stock rallies 14% after bagging ₹386 crore-order from Maharatna PSU; Time to buy?

Astra Microwave Products Share Price Today: Shares of Astra Microwave Products rallied over 14 per cent in afternoon deals on Thursday, March 28, after the electrical products company bagged an order worth ₹385.58 crore from Bharat Heavy Electricals Ltd (BHEL). 

The smallcap company won the order from the Maharatna public sector undertaking (PSU) for the supply of medium power radar (MPR) sub-systems. The expected time period for the completion of orders is 36 months.

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Astra Microwave Products Shares Today

On Thursday, shares of Astra Microwave Products opened at ₹543.40 and surged 14.45 per cent to hit an intra day high of ₹621.95 against a 52-week high of ₹690 apiece on the BSE. Shares settled 9.41 per cent higher at ₹595.70 apiece on the BSE. The market capitalisation stands at ₹5,655.87 crore.

Astra Microwave shares have gained around 90 per cent in last six months and soared 225 per cent in the last two years. In the last three years, the stock has zoomed around 455 per cent and 755 per cent in the last five years.

Why ICICIdirect is bullish on Astra Microwave

Domestic brokerage firm ICICIdirect recommended a ‘buy’ rating on the smallcap multibagger stock with a target price of ₹740. The brokerage sees a potential upside of 21 per cent on the stock in the next 6-12 months.

Also Read: BHEL is on right track, but a slow one

‘’We believe Astra Microwave Products is well placed to witness healthy growth led by strong sector tailwinds. Government's focus on indigenisation, increasing usage of electronics in defence and space, strong order backlog, healthy orders pipeline and execution of high-margin domestic orders would drive earnings in coming period,'' said ICICIdirect in its report.

The report added that the company is strongly placed to capture a bigger pie of the growing Indian defence sector with deep domain expertise and high focus on R&D. It expect ~ ₹8,000 crore orders opportunity for the company till 2028, primarily in defence and space electronics. ‘’Overall execution would also improve as the risk of supply chain issues recedes with increase in domestic procurement of raw materials and subcomponents,'' according to ICICIdirect.

The brokerage estimates Astra Microwave's revenue, EBITDA and profit after tax to grow at ~17 per cent, ~25 per cent and ~36 per cent CAGR respectively over FY23-26E. Astra Microwave Products is a leading designer and manufacturer of a wide array of radio frequency systems, microwave chips, and microwave-based components and subsystems for defence, telecom, and space.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.