Azad Engineering’s stock soared by 14.3% to ₹1,670 per share during early trading on Monday, November 4, after the company announced a major new contract.
On Sunday, Azad Engineering revealed that it had signed a Long-Term Contract & Price Agreement (LTCPA) with Mitsubishi Heavy Industries Limited (MHI) from Japan. This deal involves supplying complex rotating and stationary airfoils for advanced gas and thermal power turbine engines, responding to the growing global demand for power generation.
The contract is valued at ₹700 crore, equivalent to $82.89 million. In its announcement, the company highlighted that this agreement strengthens its strategic partnership with MHI.
This latest order marks the second significant win for Azad Engineering in just under two weeks. On September 24, the company secured a $16 million contract with Honeywell Aerospace ISC in the USA for the manufacturing and supply of specialized components for the aviation sector. Additionally, in July, Azad Engineering signed a five-year agreement with Siemens Energy to supply critical components for turbine engines.
The stock’s impressive performance has caught the attention of investors. Earlier this month, global brokerage firm Investec began coverage of Azad Engineering with a ‘buy’ recommendation and set a target price of ₹1,850. Investec noted that Azad Engineering is the only Indian company providing 3D airfoils to global original equipment manufacturers (OEMs), highlighting the high barriers to entry in this field. The brokerage projects that the company’s profit after tax (PAT) will grow at an impressive 40% compound annual growth rate (CAGR) from FY 2024 to 2027 due to its recent contract wins and other strategic moves.
Furthermore, domestic brokerage ICICI Securities has also raised its target price for the stock to ₹2,450 per share, maintaining a ‘buy’ rating and marking a record target. They pointed out that the company’s improved cost efficiency and product quality have allowed it to capture a larger share of client budgets. ICICI Securities emphasized that Azad Engineering is poised for significant earnings growth, with substantial market potential still available.
Azad Engineering specializes in precision engineering solutions for industries such as aerospace, defense, power generation, and oil & gas. The company aims to transform Indian manufacturing by adhering to global standards in precision processes.
Remarkable Stock Performance in 2024
The company’s shares have seen tremendous growth this year, climbing from ₹699.30 at the start of 2024 to the current price of ₹1,670, representing a remarkable increase of 138%. In June, the stock even exceeded the ₹2,000 mark, reaching an all-time high of ₹2,080.
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