PTC Industries: How high can the stock really go?

The engineering components maker, which surged 10,772% from ₹132.45 on 15 May 2020 to ₹14,520.70 to date on BSE, is once again in the spotlight after defence minister Rajnath Singh laid the foundation stones of seven critical projects of Aerolloy Technologies, a wholly owned subsidiary of PTC Industries, Uttar Pradesh Defence Industrial Corridor in Lucknow, on 12 May.

The seven projects include India’s largest Aerospace Precision Casting Plant, Aerospace Forge Shop and Mill Products Plant, Aerospace Precision Machining Shop, Strategic Powder Metallurgy Facility, the STrIDE Academy for high-end skilling and PTC’s R&D Centre.

But the highlight was the inauguration of Aerolloy’s Titanium and Superalloys Materials Plant—one of the world's largest single-site titanium remelting facilities. The company said on microblogging site X, formerly Twitter, that the facility is poised to dramatically reduce India’s dependence on imports of critical materials for aerospace and defence.   

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As a result, on 14 May, the stock hit the upper circuit by rising 10% to ₹14,027 from its previous closing of ₹12,752 on NSE.

However, the extraordinary rally has raised doubts about whether the stock still has room to rise or whether the growth has already been priced in. 

A stellar run

PTC Industries, which specialises in manufacturing products used in defence machinery, including alloy and non-alloy steel castings, titanium castings, machined components, and fabricated parts, started trading on National Stock Exchange of India Ltd (NSE) on 9 June 2023 at ₹3,070.15 and has risen 369% to ₹14,546 till 15 May, beating the Nifty Defence's 198% returns.

In the last one year alone, the stock has surged over 90%, showed data from Bloomberg.

With its off-the-chart performance, the metal casting manufacturer has attracted high-profile investors like Motilal Oswal Large and Midcap Fund, Vikas Khemani, Mukul Agrawal, and Mona Mehta (Akash Ambani’s mother-in-law).

As of the March quarter 2024-25, Vikas Khemani holds 3.2%, Mukul Agrawal 1.07%, and Mona Mehta 2.98% stake in the company, according to BSE shareholding data. Motilal Oswal Large and Midcap Fund holds 2.43%.

But here's the anomaly. Between 10 May 2024 and 14 June 2024, the scrip surged over 100%, a move that raised eyebrows. Simply put, over half of the stock’s stellar gains came during this period, as it surged from ₹7,380.95 to ₹14,930.95 on NSE.

On 30 May, 10,983 shares were traded. But starting 31 May, trading exploded for five sessions, with over 100,000 shares exchanged daily. The frenzy peaked on 5 June, with 171,800 shares being traded, and a striking 88,575 were marked for delivery, raising fresh questions about what's driving the action.

But the stock is still down from its 52-week high of ₹17,978.

Business growth

PTC has a strong business model and few global competitors in aerospace-grade titanium and superalloy castings. It is also expanding its capabilities through powder metallurgy and strategic acquisitions, such as Trac Precision Solutions Ltd, a UK-based provider of precision-machined components serving the aerospace, defence, and power generation sectors. 

Analysts expect companies like PTC Industries to keep seeing strong order flow, thanks to their role in global supply chains. Though the company’s earnings growth will depend on how well it utilises its capacity.

Once the capacity ramp-up is over, PTC Industries’ management expects 20x the estimated 2025-26 turnover, as it said in its Q3FY25 earnings call.

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ICICI Securities is of the view that PTC is a case of “earnings multiplier on the back of capabilities developed over a period of time, existing and upcoming contracts and capacities being added".

In a 27 February report, the brokerage noted that PTC is likely to deliver stronger returns than its peers, with asset turnover expected to be 3-4x, far ahead of the global average of 0.5-0.7x. A higher asset turnover means the company is using its assets more efficiently. 

On the profitability front, too, ICICI Securities expects margins to improve substantially since metal margins are in the range of 30-35%, while casting is 45-50%. “Margins made by Aerolloy (PTC’s subsidiary) are much higher in the first two years of operations. As the revenue share of Aerolloy goes up, we expect margins to increase further," it said.

Moreover, PTC Industries has secured four major long-term orders from global original equipment manufacturers (OEMs): Safran SA for LEAP engine components, Dassault Aviation for Rafale and Falcon jet parts, Israel Aerospace Industries for Ti-cast aerospace components, and BAE Systems for M777 ULH castings. 

Discussions are also underway with Airbus SE, Rolls-Royce, and Pratt & Whitney. 

New orders are expected once metal capacities are fully commissioned.

Additionally, to secure the titanium sponge supply, PTC has signed a long-term memorandum of understanding (MoU) with AMIC Toho Titanium Metal Co. Ltd and another with the Odisha government to set up domestic Ti sponge production. This will reduce import dependency, lower costs, and support India's ‘Aatmanirbhar Bharat’ vision for the defence sector.

Financial position

In the December quarter of 2024-25, the company's total income rose 30.6% year-on-year to ₹77.11 crore. Earnings before interest, taxes, depreciation, and amortisation (Ebitda) stood at ₹25.45 crore, up from ₹18.97 crore in the year-ago quarter. The operating margin expanded by 329 basis points to 34.2%. One basis point is one hundredth of a percentage point. Its profit after tax surged by 76.2% on-year, reaching ₹14.24 crore.

The company has seen a steady improvement in its operating profit margin over a longer horizon—from 16% in 2018-19 to 28.3% in 2023-24—driven by technological innovation, scaling efficiencies, and a strategic shift into titanium castings, according to an Icra report dated 13 January.

It has also raised ₹1,082.3 crore between 2022-23 and H1FY25 through a mix of rights issues, preferential allotments, convertible warrants, and a qualified institutional placement worth ₹675.9 crore (net of issue expenses). This capital infusion significantly boosted its net worth from ₹168.5 crore (March 2022) to ₹1,344.1 crore (September 2024).

The report also highlighted that PTC maintained a low gearing ratio of 0.1x as of September 2024, down from 0.3x in March 2024, with minimal reliance on debt. This means that it has very little debt compared to its equity. In simple terms, it is not heavily reliant on borrowing to fund its operations or growth.

Valuation concerns 

Now commanding a market capitalisation north of ₹20,000 crore, PTC Industries’ stock has seen a steep valuation climb, trading at a price-to-earnings multiple of around 143.86x, up from 111.44x in 2024. The numbers are flying high, but the hefty P/E ratio raises a key question: How much growth is already priced in?

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From a valuation standpoint, much of the growth story already seems baked into the stock, said Kranthi Bathini, director of equity strategy at WealthMills Securities. 

That said, he believes the full scope of its potential hasn’t been fully captured yet—there’s still meaningful upside on the table. “It may not be a straight climb, though. Expect the journey to include phases of consolidation along the way."

Speaking specifically about PTC Industries, Bathini noted the company’s unique positioning: It is poised to dominate the titanium casting space—a niche where only a handful of players operate globally. “As the world’s second-largest titanium recycler, it’s in rarefied air. This exclusivity alone warrants a premium valuation."

Dhirendra Tiwari of Antique Stock Broking believes that with “sustained return on equity of 37-38% and return on capital employed of 48-50% from FY28e, the company will continue to command premium valuations and can well potentially trade at 40x FY28e earnings, implying significant upside".