HDFC Securities Institutional Equities has maintained a Buy rating on Ather Industries Ltd. with a target price of ₹1,429, according to reports from NDTV Profit. The brokerage recently visited the company's manufacturing site Magnum and R&D centre, interacting with management to assess growth prospects. The target price represents a significant increase from previous levels, reflecting improved confidence in the company's business strategy and execution capabilities.
The brokerage highlighted that Ather Industries' growth will be led by ramp-up in exclusive manufacturing for Milliken Chemical and Baker Hughes, ramp-up in Pharma and Agrochemical molecules at recently commissioned Block 1 and Block 2 at the company's site Magnum, as reported by NDTV Profit. Additionally, the company plans to commission and ramp-up the other 14 blocks at Magnum site over three years in phases, with management reaffirming its vision to have 70% of revenue coming from CEM and CRAMS segments by FY30. All three business segments are expected to drive growth with a more skew towards contract, exclusive manufacturing and contract research and manufacturing services.
According to the brokerage report, the company plans to incur a capex of ₹300 to 350 crore each year during FY27-FY29 with focus on site Magnum, as reported by NDTV Profit. The capex will be funded through a mix of debt, internal accruals, and customer advances/deposits. The company also plans to doubling of R&D capacity and capabilities at site Catalyst (Site 1, Sachin) and increase utilization of site 2 and site 3 to support future growth initiatives.
The brokerage expects revenue/Ebitda/PAT compound annual growth rates of ~28/29/32% over FY26-FY29E, according to the report from NDTV Profit. This projected growth trajectory reflects the company's strategic focus on high-value contract manufacturing and research services, with the expansion of manufacturing capacity at the Magnum site expected to drive significant operational leverage and margin expansion over the forecast period.
