A leading defence stock has captured attention after announcing a significant Rs.800 crore investment to establish a state-of-the-art superalloy manufacturing plant in Telangana. This move is expected to boost indigenous production capabilities and strengthen India’s defence manufacturing sector.
Price Movement
During Wednesday’s trading session, Azad Engineering Ltd’s stock reached a peak of Rs.1,784.85 per share, marking an increase of over 1.5 percent from its previous close of Rs.1,757.05 apiece. The stock has since pulled back slightly and is now trading at Rs.1,763.60. Year-to-date, it has delivered returns exceeding 145 percent.
What happened
Azad Engineering, a domestic supplier to aerospace and defence OEMs, has announced plans to establish a Rs.800 crore superalloy manufacturing facility near Hyderabad.
The project, to be developed in two phases, Rs.300 crore in the first and Rs.500 crore in the second will span 25 acres in IP Ghanpur and is expected to create 600 jobs. The announcement was highlighted as a significant investment by the Minister’s office.
Strategic Partnerships
In January 2024, Azad Engineering signed a long-term agreement with Rolls-Royce to manufacture components for its defence aircraft engines. This partnership is anticipated to drive significant revenue growth, with management forecasting a 25-30 percent increase in revenue for the current fiscal year.
Additionally, Azad Engineering has been chosen as the exclusive industry partner by the Defence Research and Development Organisation (DRDO) to produce Advanced Turbo Gas Generator Engines. This contract represents a critical expansion into propulsion systems, with initial deliveries projected to begin by early 2026.
Revenue Mix
Azad Engineering operates in various sectors, including aerospace, defence, and energy. According to its recent filings, the company derived 78 percent of its revenue from the Energy and Oil & Gas segment, followed by 19 percent from the Aerospace & Defence segment, and the remaining 3 percent from other segments.
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Financial Performance
For the quarter ending September 2024, the company reported revenue from operations of Rs.112 crore, a 35 percent increase from Rs.83 crore in Q2FY24. Net profit for the period stood at Rs.21 crore, reflecting a 10.5 percent growth compared to Rs.19 crore in the same quarter last year.
Shareholding Pattern
As of the September 2024 shareholding pattern, promoters hold a 65.90 percent stake in Azad Engineering Ltd., with Foreign Institutional Investors (FIIs) holding 9.74 percent, Domestic Institutional Investors (DIIs) at 5.74 percent, and retail investors owning 18.61 percent.
Before the IPO, Sachin Tendulkar invested Rs.5 crore in the company, an amount that rose to over Rs.31 crore post-listing and has continued to grow since then.
About the Company
Azad Engineering Pvt Ltd, founded in 2008 and based in Hyderabad, India, specializes in high-precision components for the aerospace, defence, and energy sectors. The company is known for its advanced manufacturing capabilities, including CNC machining and forging, and serves major OEMs like General Electric and Honeywell.
Written by – Siddesh S Raskar
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