Goldman Sachs has added PTC Industries in its latest APAC Conviction List. The global brokerge house highlighted that the company, with contracts from global majors for both Commercial and Defence platforms, will be a direct beneficiary of the upcoming aerospace engine ecosystem in India.
The international brokerage firm forecasts PTC to record the highest earnings growth at an annualised rate of 123% on a compounded basis through to FY28. Goldman Sachs has a 12-month target price of Rs 24,725. This implied upside of about 43% based on current levels.
Goldman Sachs on PTC: Key catalysts for adding to APAC conviction list
The key question is what triggered the addition of PTC to Goldman’s conviction list? They have listed out key catalysts for growth. These include
-Commissioning of the forging press by Q4FY26
-Approval of Titatnium ingots by Q1FY27
-Commissioning of the Electron Beam Cold Hearth Remelting (EBCHR) furnace by Q1FY27
-4) Commissioning of the Plate/Sheet Rolling mill and Bar rolling mill by Q1FY27
The note, led by analyst Amit Dixit of Goldman Sachs, believe that “the combined advantages of Capabilities, Contracts, and Capacity (3Cs) are poised to position it uniquely within the Titanium (Ti) and Superalloys (SA) sectors.” They see the company “to be a direct beneficiary of the upcoming aerospace engine ecosystem in India.”
Goldman Sachs on PTC: Growing domestic security, globalizing supply
The outlook for the key sectors that PTC caters to was also another key driver for the recommendation. The focus is on 3 key themes.
-The increase in the domestic defence TAM or the total addressable market, by more than six-fold to Rs 10 trillion (or $122 billion) over the next 20 years.
-Goldman Sachs also listed out the scope for indigenisation “where local players have been under-represented.”
-Higher defence exports: The government has targeted Rs 50,000 crore ($5.8bn) by FY29 against Rs 2,3,600b TRrillion or ($2.8bn) in FY25, Goldman Sachs added.
Goldman Sachs on PTC Industries: Global titanium play from Lucknow
Goldman Sachs listed out that ” PTC has developed proprietary processes for recycling and refining titanium into aerospace-grade feedstock, something few Indian firms can achieve.”
Additionally, it also supplies to global engine and aerospace majors, including castings for defense programs under both Indian and export platforms. The company is executing a landmark project the world’s largest single-site recycled titanium capacity expected to be commissioned by FY26-end.
Goldman Sachs on PTC: Return expectations
The Gpldman Sachs expects a “rapid earnings growth trajectory as capacity gets ramped-up.” Furthermore, the increased contribution from castings (a higher-margin business) is likely to improve the profit margin, as per Goldman Sachs. PTC Industries’ profit margin has already shown an improvement. It has risen to to 19.8% in FY25 from 2.7% in FY21. That said, asset turnover has declined during this period due to investment, particularly the acquisition of Trac Precision in FY25. Going forward, Goldman Sachs expects “both higher asset turnover and PAT margins to lead to a meaningful impact in RoE.”
