₹6,500 Cr Order Book: Stock in Focus After Signing Supply Agreement with Mitsubishi

Synopsis: The engineering company has secured a long-term global agreement with a leading turbine manufacturer, marking a strategic step into advanced, high-value components and strengthening its position in the global supply chain. 

The shares of this small-cap company majorly engaged in manufacturing of aerospace components and turbines, were in focus after signing long-term agreement with Mitsubishi Heavy Industries

With the market capitalization of Rs. 9,727 Crores, the shares of Azad Engineering Ltd Reached an intraday high of Rs. 1602 per share raising nearly 8.7 percent from its previous day close of Rs. 1473 per share and is trading at a P/E of 79 whereas industry P/E stands at 31.8 

What is the NEWS

Azad Engineering Limited has been selected as a Single Source Supplier Partner by Mitsubishi Heavy Industries Limited (MHI), Japan, and has signed a Long Term Contract & Price Agreement (LTCPA) for a period of 8 years. Under this agreement, the company will supply highly engineered and complex hot-section nozzle vane segments used in gas turbine engines. This development represents a significant transition for Azad Engineering, as it moves from manufacturing compressor (cold-section) airfoils and other turbine components to producing critical combustion hot-section components, which involve higher precision and technological complexity. 

The agreement is part of the company’s expanding partnership with Mitsubishi Heavy Industries (MHI), one of the world’s leading turbine manufacturers, catering to global power generation markets. To support this new phase, the production of these components will be integrated into MHI’s dedicated lean manufacturing facility, specifically designed for advanced gas turbine platforms. While the order size remains confidential, the long-term nature of the contract provides strong revenue visibility and highlights Azad Engineering’s growing role in the global aerospace and power generation supply chain. 

About the Company and Financials

Azad Engineering Limited is majorly engaged in manufacturing of aerospace components and turbines and supplies its products to original equipment manufacturers (OEMs) in the aerospace, defense, energy, and oil and gas industries with an order book of over Rs.6500 Crores providing multi year revenue visibility. 81 percent of the revenue is contributed by Energy, OIl & Gas where as 17 percent of the revenue is contributed by aerospace and Defence  and 91 percent of the business comes from exports and remaining 9 percent is contributed by domestic markets 

Year on Year analysis: Revenue from Operations has increased from Rs. 119  Crores to Rs. 156  Crores, up 31  percent. Operating profit has increased from Rs. 43 Crores to Rs. 60 Crores, up 39  percent and net profit has increased from Rs. 24 Crores to Rs. 34 Crores, up 41.6 percent 

Quarter on Quarter analysis: Revenue from Operations has increased from Rs. 143  Crores to Rs. 156  Crores, up 9 percent. Operating profit has increased from Rs.  51 Crores to Rs. 60 Crores, up 17.6  percent and net profit has increased from Rs. 33 Crores to Rs. 34 Crores, up 3 percent  

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