New Delhi: The share of defense stock Hindustan Aeronautics Limited has declined today and it is trading at Rs 4385, down 2.18 percent on NSE. This defense stock has fallen by about 18 percent in six months. In such a situation, if you are looking for a profitable defense stock, then you can bet on the stock of MTAR Technologies. Today this stock has gained 4.57 percent and is trading at Rs 1627.35. Brokerage firm Motilal Oswal has also advised investors to buy this stock and has expressed hope that MTAR Technologies stock can give 35 percent return in a year. The brokerage has kept the target price of MTAR Tech share at Rs 2100.

MTAR Tech derived nearly 70 per cent of its total revenue in FY24 from a single customer, Bloom Energy (BE). Bloom Energy is a global leader in the manufacture of standard oxide fuel cells (SOFCs). Motilal Oswal said MTAR's dependence on a single customer has always been a matter of concern. This became more evident in FY24 when Bloom Energy transitioned its product from Yuma 50kw to Santa Cruz 65kw. This change resulted in MTAR getting fewer orders from BE and this impacted the company's revenue and profitability.

Now the situation is improving.
MTAR's revenue from clean energy fuel cells declined 21 percent year-on-year in FY24, while it had increased 2.2 times in FY23. Motilal Oswal says that Bloom Energy's transition was completed two quarters ago, now MTAR has started getting normal orders from Bloom Energy. In the second quarter of FY25, the clean energy fuel cell segment registered a growth of 9 percent year-on-year, indicating improvement after the decline in the last four quarters.

New deals and revenue prospects
Under a recent deal, Bloom Energy will supply 15,000 hotboxes to AEP. The deal will also benefit MATAR and generate revenues of Rs 1,000-1,100 crore in the next few years. The company is also trying to diversify its customer base. Fluence Energy could be its new customer in the clean energy segment.

Motilal Oswal says that at the moment, there is no contribution from Fluence as it has not received any orders in India yet. But when that happens, MTAR will start getting orders from Fluence. The problems related to Bloom Energy are now over. BE's strong order flow and new agreements are expected to improve the business scenario of MTAR Tech. The company's expansion in various segments is likely to lead to healthy growth in revenue in the coming times.