Add Azad Engineering Ltd For Target Rs. 1,900 By Choice Broking Ltd
Expanding global partnerships to drive sustainable growth
AZAD continues to demonstrate strong execution capabilities, supported by its expanding global partnerships with leading OEMs, such as Safran, GE and Mitsubishi. We believe these long-term relationships, combined with a robust order backlog—including the USD 73 Mn Phase 2 contract with Mitsubishi Heavy Industries—will enhance revenue visibility and export growth. The company’s increasing presence across aerospace, defence and turbine components should further de-risk its portfolio and sustain double-digit growth over the medium term.
Additionally, the commissioning of three new lean manufacturing facilities positions AZAD for higher operating efficiency and scale. We think the ongoing capacity ramp-up and a greater mix of high-value components will support margin expansion as utilisation improves. With strong order inflows, solid execution and continued investments in technology, Azad is well-placed to deliver superior earnings growth and strengthen its position in the high-precision engineering space.
We maintain a positive outlook on AZAD, supported by its strengthening order book, expanding global OEM partnerships and ongoing capacity additions, which collectively enhance medium-term scalability. However, following the recent rally in the stock price, we revise our rating to ‘ADD’ (from ‘BUY’), with a target price of INR 1,900, valuing the stock at 50x FY27–28E average EPS.
Healthy Q2 show; Execution momentum and margin discipline intact
* Revenue for Q2FY26 up by 39.6% YoY and up by 8.3% QoQ at INR 1,579 Mn (vs CIE est. INR 1,608 Mn)
* EBIDTA for Q2FY26 up by 31.8% YoY and up 6.7% QoQ at INR 525 Mn (vs CIE est. INR 544 Mn). The EBITDA margin stood at 36.1%, improved by 35bps YoY (vs CIE est. of 35.5%)
* PAT for Q2FY26 up by 56.2% YoY and up 10.8% QoQ at INR 326 Mn (vs CIE est. INR 331 Mn). PAT margin improved by 367bps YoY, reaching 22.4% (vs CIE est. 21.6%)
For Detailed Report With Disclaimer Visit. https://choicebroking.in/disclaimer
SEBI Registration no.: INZ 000160131
