MTI Wireless Edge (AIM: MWE) — Update after H1 2026 results and my call with the CEO

Original initiation published May 2026.

The Quick Take

• Company: MTI Wireless Edge (AIM: MWE) — Israeli antenna, water-control and RF distribution group
• Revised thesis: A genuinely diversified compounder, not a defence pure-play. The half just gone was carried by the water business, not by antennas or defence
• Valuation: 68p vs my fair value of 100p
• Key risk: The full-year result now depends on a second-half antenna recovery that has to be large
• Position: Adding. I’ve added since initiation (as recently as 1^st Sept)
• Time horizon: 2–3 years

What I got wrong, and what’s changed

I initiated on MTI in May at 68p with a 100p fair value, and the core of my argument was that the market was missing the PSK defence pivot, with the antenna division as “the long-term value engine.” Half of that has held up. Half of it hasn’t, and it’s worth saying so plainly.

Three corrections to the original piece:

1. PSK is not a fourth division. MTI reports three segments: Antennas, Water Control & Management, and Distribution & Professional Consulting Services. PSK Wind Technologies sits inside the Distribution division alongside MTI Summit. It has never been separately disclosed, which is the single biggest gap in the public numbers.
2. The PSK buy-out is a 2026 event, not 2027. On the results webinar Mr Borovitz confirmed the option over the remaining 40% becomes exercisable at the end of this year. He expects to exercise, though possibly not for the full 40%, in order to leave some equity as management incentive.
3. Antennas were not the value engine this half — Mottech was. In H1 2026, antenna revenue fell 20% while the water business grew sales 31% and operating profit 51%. My “PSK is under-appreciated” framing was directionally right on defence demand, but I pointed at the wrong part of the group.

H1 2026 in numbers (US$000s)

By division:

One thing to note is that the revenue mix has shifted hard: antennas are now 25% of the group, down from 34% a year ago, with water at 41%.

What the CEO told me

Last week I had the privilege to speak to the CEO of MTI Wireless Moni Borovitz directly. Here is a high level summary of some of the areas we discuss. The main point however was that Mr Borovitz came across as a passionate CEO/Owner who knows the business inside out and has a clear plan of how to grow it. While I have seen his webinars previously, I was even more impressed when we spoke directly. He answered all my questions direct to the point and all of the explanations made sense and tied to previous data. It is a shame that the share price has come off a bit, but I have added even more since my conversation and my conviction in this business is even stronger. In the meantime, here are some of the useful information which helped my understanding even further.

On India(antennas). The 2024–25 surge was a regulatory artefact, not a trend. India’s operators bought E-band spectrum around two and a half years ago under an obligation to make a minimum investment within two years. They met the minimum, the obligation lapsed last August, and the market has been on hold since while they wait for genuine capacity demand. He has no doubt it returns — India is the largest 5G market outside China — but he won’t forecast when. MTI’s position there is unchanged. When, not if, the demand comes back I expect this to be perfectly placed to take advantage of the opportunity at hand.

On ABS. This is the part of the antenna story I’d underweighted. MTI has moved most ABS production into its own Indian facility, completing in June, a quarter ahead of internal plans. Capacity has roughly tripled with a second shift still available, and because ABS is labour-intensive the move to India should deliver further margin. He describes the product as having no direct competitor, and it was a meaningful contributor to the improved H1 gross margin. Production now runs in both Israel and India, with one ABS variant still Israel-only and due to move.

On the second half. He expects antennas to be “much stronger” than H1, on the combination of April’s defence orders and ABS. The full-year result rests on this.

On Motorola. This was my biggest structural worry and the answer largely defused it. The distribution agreement renews automatically each year and is theoretically terminable at 90 days’ notice — but the software is MTI’s, Motorola hardware is only 30–40% of the value of what MTI sells, and Motorola has no market-facing presence in irrigation. His phrase was that Motorola has effectively become the subcontractor. Their genuine advantage is proprietary radio: a municipality running 1,000–2,000 controllers on cellular modems would pay a few dollars per unit per month in data, where MTI’s proprietary frequency costs a few thousand dollars a year in total. MTI now also sells its own hardware, which has restored price competitiveness in cost-sensitive markets like South Africa.

On Mottech’s growth. Broad-based, not one contract (most customers are in the 50-100k range of orders). South Africa is on has been the turnaround where they are more price competitive now. Also great potential in the US where they are yet to enter on their own. He also made the point that climate is widening the addressable market beyond traditionally arid regions — a prospective Eastern European agricultural customer had just visited after sixty consecutive days without rain.

On recurring revenue. More hands-on than software-style recurring. In Israel, MTI staff physically sit in municipal offices operating the systems, which is why the recurring proportion there is so high. The model is profitable in its own right and generates replacement sales, because the engineer on site finds the upgrade. It’s being replicated in Australia and South Africa through owned subsidiaries, and the new Italian office exists specifically to do the same — he expects two or three Italian customers on recurring contracts this year. Motorola hardware in the field can last twenty to thirty years, and MTI’s software supports every generation simultaneously.

On the US. Ten value-added resellers across California, Texas, Colorado, Florida, Hawaii and elsewhere. Most are owner-operators in their late fifties and sixties, doing around $2m a year, earning a comfortable living and with no appetite to expand however hard MTI pushes. He sees going direct as a large opportunity — each state is bigger than Israel — and will move state by state rather than all at once. Retirements will create the openings; there’s a precedent in Canada, where a distributor stood down during Covid and MTI took the market directly. He hopes to do something this year.

On backlog. Mr Borovitz is hesitant to publish it, and gave a reasoned answer rather than a brush-off. Often times he knows that a particular customer will place an order(based on the work that has been done, or indications), but at the same time there are no concrete signed orders in place. In his view, providing a backlog number would be a very crude and lumpy measure and at this point in time it is probably not the best option. Having listened to his explanation, it came across as genuine and I buy it. I guess this will keep investors interested by having to keep track of the orders themselves.

On R&D. The reported 2.3% of sales understates the effort by a wide margin. Including customer-funded non-recurring engineering, actual engineering spend is roughly two-and-a-half to three times reported R&D, and none of it is capitalised. Crucially, what MTI learns on a customer-funded project remains MTI’s and gets reused elsewhere. He also leans on the R&D of the principals he represents, often bringing them the specification.

On PSK. Demand is worldwide rather than Israeli, driven by the electronification of the battlefield: real-time data collection and command needs RF-shielded shelters, and very few companies globally can build them. A European specialist MTI represents quoted six months just to respond to a specification, then twenty-four months to deliver. Where a customer’s scope isn’t fully defined, PSK will price on a cost-plus basis to remove the execution risk rather than chase margin. Again, this is a very conservative and sensible approach. This type of approach to business came across multiple times, which is what you would expect from an owner operated business.

On IP. Asked which division has the strongest differentiation, he made a point I hadn’t considered. The antenna business has the most IP and does the hardest engineering — but an antenna is a component. Mottech sells a complete solution with MTI’s own software wrapped around it. That, more than anything, explains why the three divisions earn broadly similar margins.

On business model. He restated the two internal disciplines he manages to: roughly 20% of incremental revenue should convert to operating profit, and 70–80% of EBIT should convert to operating cash flow. Both held in the half.

The revised thesis

I bought this as a defence story with a water business attached. I now think that’s the wrong way round — or more precisely, that the diversification is the thesis rather than a hedge against it. I also like how the business is being run and also by who it is being run.

Mottech is the higher-quality asset than I gave it credit for: a large installed base with twenty-to-thirty-year hardware life, MTI-owned software supporting every generation, a genuine recurring service model, an own-hardware range that has reopened price-sensitive markets, and an obvious, uncontested growth path in the US. The Motorola dependency is real but far less fragile than the accounts imply. Massive customer base with small value contracts.

Antennas remain the option on something bigger — ABS with no direct competitor, moved to a tripled-capacity, lower-cost Indian facility, plus India’s E-band market restarting at some undated point. But antennas earn the lowest margin of the three divisions, and the reason is structural rather than temporary: MTI sells a component, not a system.

PSK has turned, and the worldwide demand for RF-shielded shelters is a bigger market than I assumed. But it remains undisclosed inside the Distribution segment, and I’m underwriting it partly on faith.

I’m leaving fair value at 100p, but if anything I am even more confident that the market will come around to this valuation sooner than I expect. What has changed in my valuation is the composition of the business: more of that number now sits in the water business and less in the antenna operating leverage I originally leaned on. Antennas become a high value option(similar to PSK).

What I’m watching

1. Antenna revenue in H2 — very important number as I want to see this stabilise
2. Terms of the PSK 40% option, which should be resolved by year-end.
3. A US move at Mottech — a first direct state, or an acquisition of a retiring reseller.
4. Cash conversion returning toward the historic level rather than settling at 70–80%.
5. Any sign of India’s E-band market restarting.

Disclosure: I hold a position in MTI Wireless Edge at the time of writing. My conversation with the CEO was conducted on the basis that I intended to publish, and material he asked me to keep off the record has been excluded. This is not investment advice — always do your own research. Read the full disclaimer here.