Key facts
- MTAR Technologies shares rallied 12% after clarifying it received no communication regarding project delays.
- The clarification followed reports of a paused data center project by key client Bloom Energy, which had caused a 15% stock crash over two days.
- Bloom Energy's stock also saw a similar gain on Wall Street.
- MTAR Technologies stated its order book has doubled recently and does not expect material impact from potential project pauses.
- The company is a critical manufacturing partner for Bloom Energy, supplying components like hot boxes and electrolysers.
MTAR Technologies shares surged approximately 12% on Friday, reversing a sharp decline that had occurred over the previous two days. The initial drop of around 15% was triggered by reports that a significant data center project involving its key U.S. client, Bloom Energy, had been paused. Bloom Energy's stock also experienced a decline.
Crusoe Energy Systems LLC, a developer of data centers for companies including OpenAI and Microsoft, had reportedly paused work on a planned 1.8-gigawatt data center campus in Cheyenne, Wyoming. This project was slated to be powered by 900 MW of Bloom Energy fuel cells and grid electricity. MTAR Technologies is a critical manufacturing partner for Bloom Energy, supplying essential components like hot boxes, power units, hydrogen boxes, and electrolysers, with a supply relationship spanning over nine years.
However, MTAR Technologies clarified that it has received no communication regarding any project delays or pauses. The company also stated that it works with multiple vendors and that its order book has doubled in recent months. Management indicated that they do not anticipate any material impact even if a project were to be paused, a scenario that remains unconfirmed. The company's shares have seen substantial gains over longer periods, with rallies of over 190% year-to-date and 315% in the past year.
Several bulk deals were executed for MTAR Technologies shares on June 11, following the earlier price crash. Technical analysts note that the stock witnessed a strong rebound from its 50-day exponential moving average (EMA) support level, suggesting the near-term bullish trend remains intact. However, they caution that intermittent profit booking is possible, with a crucial support zone identified between Rs 6,050 and Rs 6,000.