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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