1. At a Glance
Azad Engineering — the Hyderabad-based overachiever in aerospace, defence, and turbine parts — just pulled a ₹6,000 crore order book out of its machining arsenal and decided sleep is for the weak. With exports forming 90% of its business, this company is basically India’s stealth industrial assassin quietly shipping “mission-critical” components to global giants while the domestic market barely notices. The P/E is flirting with 99 — because apparently, gravity is for other stocks.
2. Introduction
Imagine a factory floor where every component is carved with surgical precision, destined for a jet engine, nuclear turbine, or power plant thatmust not fail. Now imagine the same company running at 88% capacity, opening two more giant plants, and telling analysts, “Yeah, we’ll grow 25-30% this year.” That’s Azad Engineering for you.
Born in 1983, the company has spent decades turning chunks of metal into aerospace and energy masterpieces. Its client list reads like a global Who’s Who — Siemens Energy, Rolls Royce, Mitsubishi, DRDO, Honeywell — basically, if you’re making turbines or aircraft engines and your parts can’t explode mid-operation, Azad is in your vendor list.
What’s even more impressive? This isn’t just assembly-line work. We’re talking about complex, multi-axis, high-precision forgings and machining that most companies wouldn’t touch without a prayer and a magnifying glass.
And the best part? While India debates self-reliance in defence and energy, Azad’s 90% export ratio means it’s already a global player — and its domestic orders (hello DRDO turbojet engines) are just starting to warm up.
3. Business Model (WTF Do They Even Do?)
Azad is in the business ofmaking things that cannot fail. They design, forge, and machine extremely high-precision components, mainly for two segments:
A) Energy & Oil & Gas (78% of Q1 FY25 revenue)
- Products: fixed/moving airfoils, hot gas parts, compressor blades, drill bits, and last-stage turbine blades.
- Applications: gas, nuclear, thermal turbines, marine propulsion, heat & power plants.
- Key Clients: Siemens Energy, Mitsubishi, MAN Energy Solutions.
- Fun Fact: Its top customers control 70% of theglobalgas turbine market. That’s like supplying three out of four cricket teams in the World Cup.
B) Aerospace & Defence (19% of Q1 FY25 revenue)
- Products: unison rings, mounts, valves, sealing rings, housing, plates.
- Applications: business jets, commercial aircraft, defence aircraft, helicopters.
- Key Clients: Honeywell, GE, Eaton Aerospace.
- Growth: Revenue in this segment grew230% YoY in Q1 FY25. That’s not growth — that’s a caffeine overdose.
Revenue Concentration:Top 5 customers contribute 45% of revenue. If one sneezes, Azad catches a cold.
Geographical Split:90% exports. Azad is basically an NRI company living in Hyderabad.
4. Financials Overview
| Metric | Q1 FY26 | Q1 FY25 | Q4 FY25 | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 135 | 98 | 125 | 37% | 8% |
| EBITDA (₹ Cr) | 49 | 33 | 45 | 48% | 9% |
| PAT (₹ Cr) | 30 | 17 | 26 | 76% | 15% |
| EPS (₹) | 4.64 | 2.90 | 4.03 | 60% | 15% |
Commentary:Revenue growth is solid, margins are stable at 36%, and PAT is growing faster than your electricity bill in summer. But with a P/E near 99, this is priced like it’s going to win a Nobel Prize in machining.
5. Valuation (Fair Value RANGE only)
Method 1: P/E
- FY26E EPS (annualised from Q1 FY26): ₹4.64 × 4 = ₹18.56
- Assigning a sector premium P/E range of 60–80 (high growth, niche play):
- FV = ₹1,114 – ₹1,485
Method 2: EV/EBITDA
- FY26E EBITDA (annualised): ₹49 × 4 = ₹196 Cr
- EV/EBITDA range: 35–45 (premium precision engineering segment)
- FV = ₹6,860 Cr – ₹8,820 Cr → Per share: ₹1,062 – ₹1,365
Method 3: DCF (simplified)
- Assuming 25% growth for 5 years, 12% WACC, 4% terminal growth:
- FV ≈ ₹1,200 – ₹1,500
Fair Value Range (Educational Only):₹1,100
