Buy Atlanta Electricals; target of Rs 1980: Motilal Oswal

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Recovery in inflows and execution: Expected improvement in 2H, driven by L1 conversions and the opening of 400kV bidding once the prototype clears testing by Dec'26.
  • Strong order book: INR32b order book, with a healthy mix of 220kV and 400kV orders, providing ~1.5-year visibility.
  • 400kV commercialization: Prototype manufacturing underway, with short-circuit testing targeted in 3QFY27, and commercial contribution expected from 4QFY27.
  • US entry: ATLANTAE plans to build its own brand in the US, starting with 220kV and below products, with a target of ~15% of revenue from exports within two years.

Thesis Validation Checklist

  • Order inflows: Improvement in order inflows, particularly in 2H, driven by L1 conversions and 400kV bidding.
  • Execution: Recovery in execution, driven by better utilization and operating leverage.
  • Margin expansion: Expansion in margins, driven by better utilization, operating leverage, and higher-kV transformer sales.
  • 400kV commercialization: Successful commercialization of 400kV transformers, with short-circuit testing and commercial contribution in line with expectations.