MTAR Obtains Board Approval for Gee Pee Aerospace & Defense Acquisition; The stock plunges 3.5%

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The board of MTAR Technologies Ltd has approved the acquisition of shares of Gee Pee Aerospace & Defense pvt. Ltd., an MSME for a consideration of Rs8.82 crore.

Management is currently in discussions with shareholders of Gee Pee Aerospace & Defense Pvt. ltd. on the terms and conditions. This acquisition is expected to deliver a wide range of benefits in the MSME category, including the increased potential to enter into an offset partnership with global OEMs, as overseas partners get an offset credit of up to 1.5 multiple on Indian content.

In addition, “the procurement policy requires the procurement of up to 20% of Gott’s department requirements through MSMEs, which should increase our customer base. In addition, this will strengthen our capacity which will allow us to will process more orders, expanding our product portfolio,” the company said.

Commenting on the acquisition, Parvat Srinivas Reddy, Managing Director of MTAR Technologies, said, “The acquisition of Gee Pee Aerospace will strengthen our capabilities in bottleneck areas, which should further fuel our revenue growth, particularly in the defense and allied sectors.

We reiterate guidance for revenue growth of 30%-35% YoY with EBITDA around 30% despite supply chain disruptions due to the COVID 19 pandemic followed by the global geopolitical crisis for the FY 22 and forecast revenue growth of 50% YoY with EBITDA of around 30% for FY 23.”

At around 10:01 a.m., MTAR Tech was trading at Rs 1355.05 per coin down 3.57% on BSE.

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