In today’s intraday trade, the shares of Azad Engineering, a prominent aerospace components and turbine manufacturer, hit the 20% upper circuit limit, marking a historic high at ₹854.30 per share. This notable uptrend comes on the heels of a 5.30% gain in the preceding trading session, spurred by the company securing a significant order from Rolls-Royce.
On Monday, Azad Engineering announced through an exchange filing during market hours that it has inked a 7-year long-term contract with Rolls-Royce. The contract involves the production and supply of critical engine parts for Rolls-Royce’s defence and military aircraft engines.
Debuting on Indian exchanges on December 28, 2023, at ₹677 per share—reflecting a 29.3% premium to the IPO price of ₹524 per share—the stock has demonstrated an impressive 63% increase based on its current price.
The IPO witnessed an overwhelming response from investors, garnering a subscription rate of 80.65 times.
Azad Engineering stands as a key player in the manufacturing of energy, aerospace, defence, and oil and gas components. The company specializes in highly engineered, complex, mission-critical, and life-critical components, competing with manufacturers from China, Europe, USA, and Japan.
The company’s clientele includes global OEMs across various industries, such as General Electric, Honeywell International Inc., Mitsubishi Heavy Industries, Ltd., Siemens Energy, Eaton Aerospace, and MAN Energy Solutions SE.
Notably, Azad Engineering has supplied critical components to major commercial aircraft manufacturers, and it is currently engaged in discussions to provide components for new engine platforms to different aircraft manufacturers, as outlined in the company’s RHP report.
In terms of financials, Azad Engineering demonstrated substantial growth, increasing its revenue from ₹124 crore in the financial year 2020 to ₹251 crore in the financial year 2023—a CAGR of 27% during this period. The company boasted an adjusted EBITDA margin of 31.61% in the financial year 2023.
With the majority of its revenues stemming from exports to global OEMs under long-term contracts, as of September 30, 2023, 89.69% of Azad Engineering’s total revenue was derived from contracts with customers located outside India.