ICICI Securities Initiates Buy Rating on Astra Microwave Products with Target Price of Rs 1600

ICICI Securities Maintains BUY Rating for Astra Microwave Products

Astra Microwave Products (ASTM) has reported a strong Q4FY26 EBITDA of INR 1.6bn, which is 8% higher than ICICI Securities' estimates and 16% higher than consensus estimates. This growth is primarily driven by a better gross margin, which was aided by a favorable mix. The company's orderbook remains robust, standing at INR 21bn, with management guiding towards an order inflow worth INR 16bn.

Despite a slow FY26 revenue growth due to delays in order awards in the first half of the year and the company's decision to pull out from low-margin export orders, management remains confident of tripling the company's revenue in the next five years. This growth is expected to be driven by the company's upcoming projects, including QRSAM, Uttam AESA, and Virupaksha AESA, which will enable it to reap the benefits of its capabilities built up over the last decade.

Revised Estimates and Target Price

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ICICI Securities has revised its estimates for Astra Microwave Products, increasing its EPS by 10% and 20% for FY27 and FY28E, respectively, to account for a better revenue and margin profile. The revised target price is set at INR 1,600, based on a target multiple of 45x FY28E EPS. This revised multiple takes into account a portion of the back-ended growth and an improved outlook for the company.

Recommendation

ICICI Securities maintains a BUY rating for Astra Microwave Products, with a revised target price of INR 1,600.

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