Broker’s call: Tega Industries (Buy)

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Target: ₹2,010

CMP: ₹1,812.95

We attended Tega Industries Limited (Tega) Analyst Meet represented by MD CEO Mehul Mohanka and CFO Sharad Khaitan to understand the current business updates and future prospects ahead. During the meeting, management highlighted on the various aspects of the business both on the consumables as well as the equipments side and the related prospects.

Key highlights were that Tega Industries targets ₹4,000 crore in revenue within 3-4 years, driven by robust growth in its consumable business and scaling up its equipment sector. In Chile, the company expects ₹1,000 crore in revenue following a EUR10 milion investment and will need more land for expansion.

On the Dynaprime side it is set to grow over 15 per cent CAGR, with South America being a major market. The project pipeline remains strong, and receivables days may slightly improve after Chile expansion.

We reiterate our positive stance on the business due to several factors: higher penetration opportunities for Dynaprime liners, a significant scale-up in McNally’s business, highlighted by a major ₹120 crore order from NMDC secured in Q1, Greenfield expansion in Chile to enhance growth opportunities in LATAM and Good progress on the large Europe order.