The domestic brokerage firm, JM Financial, has downgraded IdeaForge Technology to ‘Reduce’ from ‘Hold’ rating. The broker has a target price of Rs 500 on the stock, implying a downside of 6.4%. The near-term performance of IdeaForge Technology is likely to be impacted due to lower opening order book and delayed ordering activity. Also, the delayed finalisation of L1 orders, which is more than Rs 400 crore, will be impacted.
However, the management of this defence sector stock expects a few orders under emergency procurement to be concluded in the next few months. The company’s long-term prospects are healthy due to its core strengths, namely, technical know-how, new technology, and product development capability.
JM Financial on IdeaForge: New product development
IdeaForge’s management continues its efforts towards new product development and enhancing the capabilities of its existing drones. The company recently launched a 25km class drone, an upgrade of the ‘SWITCH’ drone and is also working on a tactical class drone with a 40-50km range.
On the logistics drone, the management said Yeti’s progress is on track, with the first prototype ready and expected to be launched in 2 years. Yeti has a range of 100-125 kilometres and a payload capacity of 100kg.
JM Financial on IdeaForge: Focus on diversification
IdeaForge is keen about diversifying into the non-defence segment, for that it is focusing on drone as a service and launching a logistics drone, which will be the key growth driver for it in the non–defence space over the long run. JM Financial sees this as positive over the longer term.
IdeaForge stock performance
The share price of IdeaForge has risen 2.4% in the last five trading sessions. The stock has given a return of 17% in the last one month and 39% in the past six months. However, IdeaForge’s share price has fallen 23% in the last 1 year.