In early trading on Monday, November 4, shares of Azad Engineering, a prominent producer of turbines and aerospace components, rose 14.3% to ₹1,670 following the acquisition of a sizable order.
Mitsubishi Heavy Industries Limited (MHI), Japan, and the company signed a Long-Term Contract & Price Agreement (LTCPA) on Sunday, according to an exchange filing. The agreement calls for the supply of highly engineered, complex rotating and stationary aerofoils for advanced gas and thermal power turbine engines in order to meet the demand for power generation worldwide.
The signed contract is worth ₹700 crore in total. In its report, the business said, “This $82.89 million (₹700 crore) contract phase is a robust step towards cementing our strategic relationship with Mitsubishi Heavy Industries Limited, Japan (MHI).”
In less than two weeks, Azad Engineering has already won two orders. On September 24, the business was awarded a $16 million contract by Honeywell Aerospace ISC, USA, to produce and supply extremely complicated components to suit the aviation industry’s global demand.
In order to meet Siemens’ global demand, the business and Siemens Energy Global GmbH & Co. signed a five-year deal earlier in July for the production and delivery of vital rotating components for innovative gas and heat turbine engines.
On Dalal Street, the stock has become very popular due to several order wins. Furthermore, international broking firm Investec began coverage in early October with a target price of ₹1,850 and a “buy” rating.
The broking emphasised the high entry barriers in the field by pointing out that Azad Engineering is the only Indian business offering 3D aerofoils to international OEMs. The broking predicts that recent order wins, diversification, and lower financing costs would propel Azad’s profit after tax (PAT) to expand at a 40% CAGR over FY 2024–2027.
Earlier, domestic broking ICICI Securities maintained a “buy” recommendation for Azad Engineering and increased its target price to ₹2,450 per share, setting a record objective for the stock. It claimed that a higher percentage of customers’ wallets has resulted from the company’s improved cost efficiencies and product quality.
“In our view, Azad is on a long runway of significant earnings growth, with significant TAM still available,” said the brokerage.
Precision engineering solutions for OEMs in the oil and gas, power generation, aerospace and military sectors are Azad Engineering’s area of expertise. With precision procedures that surpass international norms, the business hopes to completely transform the Indian manufacturing scene.
Stock up 138% in CY24.
This year, the company’s shares have seen a remarkable increase, rising 138% from ₹699.30 to the current selling price of ₹1,670. The stock hit a new all-time high of ₹2,080 in June, surpassing the ₹2,000 mark for the first time.
