Azad Engineering Limited – Investor Presentation Summary

Key Operational Highlights

  • Delivered India's first indigenous expandable turbo jet engine to DRDO and Ministry of Defence, manufactured and assembled by Azad Engineering
  • Produced over 3 million mission critical parts with Zero parts per million defects requirement
  • Four new Dedicated Lean Manufacturing Facilities inaugurated: Mitsubishi Heavy Industries (7,200 sq.m, March 2025), GE Vernova (7,600 sq.m, April 2025), Siemens Energy (7,200 sq.m, September 2025), Baker Hughes (7,600 sq.m, April 2026)
  • Civil construction at Azad Centre of Excellence (CoE) in Tunki Bollaram expected to be completed within FY27

Key drivers of operational performance: Advanced manufacturing capabilities, precision engineering, and strategic partnerships with global OEMs

Segment-wise Performance

  • Energy & Oil & Gas business continued growth in line with long-term targets
  • Aerospace & Defence business continued growth in line with long-term targets
  • Both segments driven by disciplined execution and strong order book

Financial Highlights

Revenue: ₹1,705.19 Mn

EBITDA: ₹640.70 Mn

PAT: ₹363.52 Mn

EPS – Basic: ₹5.63

EBITDA Margin: 37.6%

PAT Margin: 21.3%

YoY comparison: Revenue grew 26.8% from ₹1,345.12 Mn in Q1FY26, EBITDA grew 32.1% from ₹485.12 Mn in Q1FY26, PAT grew 21.2% from ₹299.94 Mn in Q1FY26

QoQ comparison: Revenue grew 8.3% from ₹1,573.92 Mn in Q4FY26, EBITDA grew 10.9% from ₹577.64 Mn in Q4FY26, PAT grew 3.5% from ₹351.29 Mn in Q4FY26

Drivers of financial performance: Sustained operating efficiencies, business growth across segments

Key Risks: Foreign currency volatility impacting other income

Geographical Revenue Split

Not Specified

Balance Sheet Snapshot

Not Specified for current quarter

Historical FY26 data: Property, plant and equipment: ₹7,447.7 Mn, Right of use assets: ₹113.1 Mn, Capital work-in-progress: ₹2,566.8 Mn, Inventories: ₹3,266.3 Mn, Trade receivables: ₹3,092.4 Mn, Cash and cash equivalents: ₹235.8 Mn

Capex & Cash Flow Health

Capital Expenditure: Ongoing expansion at Azad Centre of Excellence with Phase 1 (~94,899 sq.mts) and Phase 2 (67,267 sq.mts)

Investment Rationale: Capacity expansion to accelerate revenue growth, dedicated facilities for specific customers

Strategic & R&D Initiatives

  • Strategic shift from component manufacturer to propulsion systems player
  • Manufacturing and assembly of critical engine components for defence applications
  • Expansion into manufacture of higher-value products including advanced gas, steam and nuclear turbines and landing gears
  • Technology-led optimization through automation, lean manufacturing, quality enhancement
  • Geographical expansion with MoU signed for expansion into Saudi Arabia
  • Strategic inorganic acquisitions to complement and enhance capabilities

Industry Trends & Business Environment

  • Jet engine technology demands exceptional precision, advanced metallurgy, and uncompromising manufacturing standards
  • Growing replacement demand in energy and aerospace sectors
  • Highly regulated industries with significant entry barriers and long vendor qualification cycles (30-48 months)

Management Commentary & Growth Outlook

Strategic Outlook: "We began the year with our best-ever quarterly results... Supported by a strong order book, the company remains well positioned for sustained growth" - Rakesh Chopdar, Chairman & CEO

FY Guidance: Reiterates long-term revenue growth guidance of over 25%

Expected ramp-up: More substantive contribution to P&L expected from H2-FY27 onwards from new dedicated lines

Orders and Contracts

  • GTRE: Prestigious nation pride contract for end-to-end manufacturing, assembling and integration of complete assembled Advanced Turbo Gas Generator Engine
  • GE Vernova: USD 112 Mn contract for advanced gas turbine engine airfoils; USD 53.5 Mn contract for nuclear, industrial, and thermal power industries
  • Baker Hughes: MoU to setup facility in Saudi Arabia; Strategic supply agreement with Nuovo Pignone srl (5 years until CY 2030)
  • Mitsubishi Heavy Industries: LTCPA valued at USD 83 Mn for 5 years for gas & thermal power turbine engines
  • Honeywell Aerospace: Business award valued at USD 16 Mn for aviation components
  • Arabelle Solutions: Supply agreement valued at USD 40 Mn
  • BHEL: Purchase order for advanced rotating airfoils for supercritical turbines
  • Pratt and Whitney Canada: Master Terms Agreement for aircraft engine components
  • Rolls Royce Plc: Agreement valued at USD 90 Mn for combustion commodities, cold blades, and machined parts