Defence Stock in Which FIIs Have Consistently Increased Their Stake to 17.3% Over the Past Year

Synopsis:  FIIs raise stake to 17.31% in this defence stock, driven by strong order book, earnings growth, and exposure to defence, nuclear, and clean energy sectors.

The article outlines why FIIs have consistently increased their stake in this company, which specializes in advanced machining, fabrication, and assembly for clients like ISRO, DRDO, and global clean energy firms.

With a market capitalization of Rs 20,009 per share, MTAR Technologies Ltd’s share closed at Rs 6,505 per share, down by 2.63 percent from its previous day’s close. The share of this company gave a return of 615 percent over the last five years.

FII’s stake Increase

FII stake in this aerospace and defence company rose sharply over the past year, increasing from 6.74 percent in Q4 FY25 to 17.31 percent in Q4 FY26. The consistent accumulation reflects strong institutional confidence, likely driven by sector tailwinds, improving earnings visibility, and strategic importance of defence manufacturing.

With this the current shareholding as of Q4 FY26 pattern of MTAR Technologies stands at promoter holding at 30.44 percent, down from 31.77 percent a year ago. DII stake increased to 27.66 percent from 24.40 percent, while FII holding rose to 17.31 percent. Meanwhile, public shareholding declined significantly to 24.59 percent from 37.10 percent in Q4 FY25.

What’s driving the FIIs’ increasing interest in the company?

Robust Order Book Visibility: The company reported a strong order book of Rs 2,394 crore as of Q3 FY26, supported by robust inflows across key segments. Notably, it received orders worth Rs 1,370 crore during the quarter alone, reflecting healthy demand momentum and favourable industrial tailwinds. Management expected the order book to further strengthen to around Rs 2,800 crore by the end of FY26, providing clear multi-year revenue visibility.

A significant portion of inflows was driven by the clean energy fuel cells segment, which secured orders worth Rs 1,080 crore in the first nine months of FY26, including Rs 645 crore in Q3. Additionally, the company received Rs 500+ crore orders for the Kaiga Units 5 and 6 nuclear reactors, reinforcing its strong positioning in the nuclear ecosystem. With rising traction in clean energy and aerospace, the order pipeline indicates sustained growth momentum ahead.

Key Growth Drivers: 

Clean Energy (Core Trigger): MTAR’s clean energy segment, particularly fuel cell components, is emerging as the primary growth engine, supported by strong global demand for hydrogen solutions and rising power needs from AI-driven data centres. Strong order inflows and strategic customer partnerships position the company to benefit from the accelerating global energy transition.

Nuclear (Stable + Large-Ticket Orders):  In the nuclear segment, the company has secured orders exceeding Rs 500 crore for Kaiga Units 5 and 6, with additional opportunities expected from reactor refurbishments. A strong pipeline, along with potential government incentives for domestic nuclear manufacturing, provides long-term execution visibility in a high-entry-barrier segment.

Aerospace & Defence (Strategic Upside): In aerospace and defence, growth is driven by export opportunities and participation in next-generation programs such as AMCA. With expanding capabilities, a proven execution track record, and rising global defence spending, the company is well positioned to capture structural growth across both international and domestic markets.

Capacity Expansion:  MTAR Technologies is scaling its clean energy capacity with clear demand visibility, expanding fuel cell capacity from 8,000 units to 12,000 by March-end. The phased ramp-up is aligned with confirmed customer demand, indicating strong execution visibility and reducing the risk of underutilized capacity.

The company plans to further scale capacity to 20,000 units by December and eventually 30,000 units in the subsequent phase, supported by Rs 50–60 crore capex. This structured expansion reflects management confidence in sustained demand and reinforces long-term growth visibility for institutional investors.

Growth Outlook & Guidance:The company has maintained its FY26 revenue growth guidance of 30–35 percent, expecting to surpass Rs 900 crore in revenue for the year. This outlook is supported by strong execution momentum, a healthy order book, and continued traction across key segments including clean energy and nuclear.

Looking ahead, the company expects around 50 percent revenue growth in FY27, driven by scaling operations and improving demand visibility. EBITDA margins are guided at around 21 percent (±100 bps) for FY26, with further expansion likely in FY27, supported by operating leverage and a better product mix.

Conclusion: The sharp rise in FII holding to 17.31 percent reflects growing institutional conviction in MTAR Technologies’ strong earnings trajectory, robust order book, and exposure to multiple high-growth sectors including defence, nuclear, and clean energy. Its niche capabilities and high entry barriers further strengthen long-term investment appeal.

With sustained revenue visibility, aggressive capacity expansion, and improving margins, the company appears well positioned to benefit from structural sector tailwinds. Continued execution and order inflows will remain key monitorables, making it a stock worth tracking closely from an institutional investment perspective.

MTAR Technologies Ltd

MTAR develops and manufactures components and equipment for the defense, aerospace, nuclear and clean energy sectors. The company was incorporated in 1970 by the promoters, to cater to the technical and engineering needs of the Indian government in the post embargo regime. 

MTAR has manufacturing footprints in Hyderabad with seven units spread across a 4 km radius and a dedicated export facility as well. In addition, the company also supplies specialised products such as Ball Screws, Water Lubricated Bearings, Roller Screws, Electro-Mechanical Actuation Systems, ASP assemblies etc. that find applications across diverse sectors

Financial Highlights: On a year-on-year basis, MTAR Technologies reported strong performance in Q3 FY26, with revenue rising 59.3 percent to Rs 278 crore. EBITDA increased 92.5 percent to Rs 64 crore, while profit before tax grew 115.2 percent to Rs 46.1 crore. Net profit surged 117.3 percent to Rs 34.7 crore, reflecting robust operational momentum.

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