This Defence stock, which is into manufacturing aerospace components and turbines and other original equipment manufacturers for the defence, aerospace, and other industries, in focus after management comment on Trump’s Tariff benefits on other countries.
Share Price Movement
In Wednesday’s trading session, the share price of Azad Engineering touched a day’s high of Rs. 1,343.50 which was up by 6.61 percent. The stock reiterated from the day’s high and was trading at Rs. 1,313.60 per share, which is 4.24 percent higher than the previous closing price of Rs. 1,260.20 apiece.
The share has delivered a 3.31 percent return and has performed on par compared to Nifty Index in the past year.
Management view on Tariff & Margin Guidance
Azad Engineering’s Whole Time Director, Vishnu Malpani, told CNBC that their demand for products has picked up, which is 30 to 35 percent more competitive than the world (excl. China). The recent fund raise of Rs. 700 crore to be deployed for building infrastructure.
Further U.S. Tariffs will not impact Azad Engineering and can benefit from it if tariffs are imposed on other geographies. On the margins front, there are no pressure and targets 33 to 35 percent margins by FY26. and sticks to its revenue growth guidance.
Future Plans & Capex
The company plans to increase its capacity by 10 times to support its growing order book, which now stands at around Rs. 4,500 crore. Azad Engineering is on track to start revenue generation from its new plant in FY26.
The first phase is at Tuniki Bollaram. It is dedicated to GE Steam Power and is to be operational by March 2025. The other customer-specific facilities are expected to come online every few months and there will be a specific facility for Mitsubishi as well.
Additionally, Azad is setting up a manufacturing unit in Saudi Arabia under a Memorandum of Association (MoU) with Baker Hughes. With this expansion, the company aims to increase its share across OEMs and further strengthen its global footprint.
They have provided guidance of 25 percent to 30 percent revenue growth for FY25 while expecting margin improvements from operating leverage, process efficiency, and backward integration.
Financials
In its Q3FY25 financial results, Azad Engineering reported revenue of Rs. 120 crore, a 34.83 percent increase from Rs. 89 crore in the same quarter of the previous year. The Profit After Tax grew by 41.17 percent to Rs. 24 crore, up from Rs. 17 crore in the same quarter of the previous year.
Company Profile
Azad Engineering Limited was established in 1983 and is a leading Indian manufacturer specializing in high-precision components for the defence, aerospace, oil and gas, and energy sectors. They produce complex products such as turbine blades and airfoil components, catering to global OEMs.
Written by – Santhosh S
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