PTC Industries, a stock in Mukul Agrawal’s portfolio, has been trading within a base-building range for nearly six months. Despite this, the stock is up 75% year-to-date (YTD), signaling strong investor interest. Each time PTC shares approach the ₹11,000 mark, buying activity increases, suggesting the possibility of a bottoming out at this level. According to a recent ICICI Securities report, following the acquisition of Trac Precision Solutions, PTC Industries is expected to see significant value appreciation. The brokerage has set a “buy” rating for the stock, with a long-term target price of ₹20,070 per share.
Impact of Trac Acquisition on PTC Industries
The strategic acquisition of Trac is expected to enhance PTC Industries’ capabilities significantly. Trac brings advanced manufacturing technologies such as 5-axis and 3-axis CNC grinding, electro-discharge machining (EDM), deep hole drilling, and fusion welding. These technologies are vital for producing complex components like turbine blades, nozzle guide vanes, heat shields, and seal segments for aero engines and industrial gas turbines.
Trac’s expertise serves major OEMs such as Rolls Royce, Safran, and Siemens. In 2023, Trac reported a revenue of GBP 24.8 million. ICICI Securities anticipates the full financial impact of this acquisition will be realized by FY26.
PTC Industries, which already specializes in advanced superalloy castings for aerospace and defense applications, will now be able to offer a complete solution, from alloy development to precision-machined, ready-to-install components. Trac’s unique capabilities are expected to fill a critical gap in engine manufacturing in India, aligning with the growing demand for indigenous engine infrastructure and Maintenance, Repair, and Overhaul (MRO) opportunities.
Long-Term Growth Potential
ICICI Securities highlights that Trac’s advanced machining technology will complement PTC’s existing expertise in titanium and superalloy castings. This integration will allow PTC to offer a comprehensive solution to its customers, maintaining full control over the manufacturing process of complex castings, including aerofoils. With the acquisition, PTC is well-positioned to drive the indigenization of engine-manufacturing technology in India, a development that could have a profound impact on the domestic defense and aerospace sectors.
The brokerage firm has maintained its “BUY” recommendation for PTC Industries, with an unchanged target price of ₹20,070 per share based on a discounted cash flow (DCF) model.
Mukul Agrawal’s Stake in PTC Industries
As of the July-September 2024 quarter, Mukul Agrawal holds 1.60 lakh shares of PTC Industries, which constitutes 1.07% of the company’s total paid-up capital.
With the successful integration of Trac’s technology and capabilities, PTC Industries is set to benefit from significant long-term growth, making it an attractive investment for those looking for exposure to India’s aerospace and defense manufacturing sectors.
Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, and not of the author.
