@Nifty Singh Ji
I didn't read this company indepth when IPO came and just applied for listing gain but I didn't get allotment.
Since you are very much bullish on this sector and company as it already part of 10% of your portfolio and you want to extent it till 30% of your portfolio which can either make or break your portfolio I will ask you do some homework.
Go through last Qtr mgt concall and RHP to understand vision and business model and their growth prospects.
If you ask my opinion as my per my knowledge and understanding,
Future is of Drone which has been proven in Armenia-Azerbaijan war and Russia-Ukraine ongoing war. Drone is going to have very wide range of application where primary use will be in defence and other usage can be mapping(Mapmyindia is customer of Ideaforge) and other civil usages.
Ideaforge is pioneer in this sector as they have around 50% market share as of FY22. The founders are well educated, experienced and enthusiast for the work they are doing as they have started this company in their college from scratch.
India is going to need a lot of drones in future to protect borders(reconnaissance usage), medical and logistics usage in difficult terrain, mapping, agricultural and other various usage and this company is doing export as well and they have plans for export market as well. Their drones are of better quality than their competitors and they are getting acceptance in developed markets.
Right now around 70% revenue is coming from government which needs to be distributed more to decrease concentration risk and it will be distributed as market develop right now drone market is in very nascent stage. They have very long working capital cycle which they need to reduce and they target to bring it down within 200 days ( this problem is with MTAR as well). In terms of valuation don't see QoQ numbers rather focus on YoY number for this company. P/E is 136 because it considers TTM data but if you calculate on basis of Q1FY24 then it looks between 50-60 times. If they are able grow in range of 30% over years then it will be always be a fancy stock among investors. Their margin is decent as well.
I will advise you to not to add agressively and wait few Qtr to see growth trajectory and management guidance and their result. You already have 10% of your portfolio and I won't advise you to make it more than 20 or max 25% of your portfolio and add it in correction time if you are a long term investor.
In near term I find few big investors can make supply pressure in this company one of them is Florintree Enterprise LLP which holds around 11% stake which is private equity fund of Mathew Cyriac. They don't hold a long time in a company post IPO and they prefer to do private equity investment at very early age of company and sell it in IPO and post IPO and they similar in MTAR as well.
Thanks 🙏
Zerodha (Trading & Demat Account)
RHP
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