Motilal Oswal recommends this stock as a proxy to play the data center theme; check price target

Shares of MTAR Technologies Ltd., the nuclear and space equipment manufacturer, have surged over 45% in the past month. Yet brokerage firm Motilal Oswal, which covers the stock, remains confident about its prospects.

The brokerage has reiterated its 'Buy' rating with a price target of ₹4,810 per share, implying a potential upside of 31% from current levels.

MTAR Technologies is a precision engineering company serving niche, high-entry-barrier industries such as defence, aerospace, nuclear energy, and clean energy.

According to Motilal, MTAR is firmly positioning itself as the indirect beneficiary of the global AI infrastructure wave. The world is building data centres at an unforeseen pace, i.e., 100 GW of new capacity is expected by 2030 (14-18% CAGR), and the singular challenge holding this expansion back is not capital but reliable power.

Grid connections now take 2-5 years; AI cannot wait that long, the brokerage said in its note, adding that this is precisely where Bloom Energy (BE) steps in.

MTAR has growing exposure to global fuel cell technology through its decade-long partnership with BE.

As Bloom Energy's sole supplier of critical hot box assemblies, commanding a 60-70% wallet share, MTAR is not merely a beneficiary of the fuel cell theme but an irreplaceable enabler.

According to the brokerage, every gigawatt of BE's capacity translates into ₹900-1,100 crore of order inflows for MTAR.

Motilal Oswal remains bullish on MTAR's long-term growth trajectory, citing its structural positioning, strong earnings visibility and exponential order growth, anchored by a deeply entrenched customer relationship that is difficult to replicate.

However, the brokerage flagged client concentration risk as a key monitorable.

That said, robust near-term growth visibility for Bloom Energy provides confidence in MTAR Tech's continued momentum.

The brokerage expects MTAR to deliver CAGRs of 40%, 55%, and 78% in revenue, EBITDA, and adjusted PAT, respectively, over FY25-28, driven by strong order inflows.

Shares of MTAR Technologies closed 0.09% higher at ₹3,685. On a year-to-date basis, the stock is up 54%.

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