This Defence stock which is into manufacturing aerospace components and turbines and other original equipment manufacturers for the defence, aerospace, and other industries plans to increase its capacity by 10 times to support its order book growth.
Share Price Movement
In Monday’s trading session, the share price of Azad Engineering touched a day’s low of Rs. 1,480.20 which is 1.67 percent down. The stock reiterated from the day’s low and closed at Rs. 1,491.85 per share which is 0.90 percent lower than the previous closing price of Rs.1,505.45 apiece. The share has delivered a 60 percent return and has outperformed the Nifty Index in the past year.
Future Plans and Capex increase by 10X
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.
Recent developments
Some of the partnerships involve signing a 7-year contract with Rolls Royce to produce critical engine parts for their Defence Aircraft Engines. Signing a contract with the Steam Power business of GE Vernova for the supply of high-complex rotating airfoils for the Nuclear and Thermal Power industry valued at around USD 35 Million and others.
Financials
In its Q2FY25 financial results, Azad Engineering reported revenue of Rs.112 crore, a 35 percent increase from Rs.83 crore in the same quarter of the previous year. The Profit After Tax grew by 10.52 percent to Rs.21 crore, up from Rs.19 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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