- Shares of MTAR Technologies fell 5% for the fourth consecutive session amid heavy selling pressure
- MTAR's stock declined over 30% in the past month due to concerns about its largest client Bloom Energy
- Bloom Energy's shares dropped 8% overnight, extending a month-long 38% decline impacting MTAR sentiment
Shares of MTAR Technologies remained under intense selling pressure on Tuesday, hitting the 5% level for the fourth consecutive trading session and extending their sharp correction to more than 30% over the past month, as investors continued to dump the stock amid mounting concerns around its largest customer, Bloom Energy.
The latest trigger came from the US, where Bloom Energy's shares fell another 8% overnight, extending a month-long decline of nearly 38%. The clean-energy company is MTAR's largest customer, contributing an estimated 55-65% of its revenue, making any weakness in Bloom a key sentiment driver for the Indian engineering company.
Investor concerns have intensified after reports of regulatory hurdles delaying an Oracle-linked data centre project that was expected to use Bloom Energy's fuel-cell technology. Any delay in execution could push back revenue recognition for Bloom, raising concerns about order visibility for MTAR as well.
Market participants continue to factor in the overhang of promoter stake sales, while domestic mutual funds reduced their holding in the June quarter to 20.36% from 23.49% in March, even as foreign portfolio investors increased their stake. Since June 25, MTAR has also been placed in the Trade-to-Trade (T2T) segment, restricting intraday trading and potentially reducing liquidity.
The sharp correction comes despite positive fundamental developments. Earlier this month, ICRA upgraded MTAR Technologies' long-term credit rating to A+ from A, citing a stronger order book, improving scale of operations and favourable export and domestic demand prospects.
Management has previously said it has not received any communication from Bloom Energy regarding order cancellations, deferments or reductions, adding that its order book remains healthy and committed business is intact.
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