Rs 4,200 Crore Order Book: Defence Company Secures Major Orders, Strengthening Its Global Position in Aerospace and Energy Sectors – Plans to Increase Manufacturing Capacity by 10x
The company is set to increase its manufacturing capacity by 10x, and the new plant is expected to start generating revenue from FY26 onwards.
This Small-Cap defence company has firmly established itself as a leading manufacturer of aerospace components, turbines, and precision-engineered products, catering to industries such as aerospace, defence, energy, and oil & gas. The company’s growth journey has been remarkable, from starting with just one machine to becoming a global leader in providing high-precision components to major OEMs.
The company has announced its Quarterly Results, and the management has also announced a major acquisition of work orders in the quarter, along with the CAPEX plan.
Azad Engineering recently signed a Memorandum of Understanding (MoU) with Baker Hughes in the Kingdom of Saudi Arabia. This collaboration, witnessed by His Royal Highness Prince Abdulaziz bin Salman, Minister of Energy, will enable Azad to set up a facility for manufacturing precision components and sub-assemblies to meet the growing requirements within Saudi Arabia.
Azad Engineering also secured an impressive Rs 700 crore order from Mitsubishi Heavy Industries, Japan, to supply air foils over five years. This is a significant milestone, reinforcing the long-standing partnership between Azad Engineering and Mitsubishi, which dates back to 2012. The order will be executed from Azad's upcoming manufacturing plant, which is set to enhance its production capacity.
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Further expanding its global footprint, Azad Engineering has bagged a USD 16 million contract from Honeywell to manufacture complex components for aerospace and defense needs. Additionally, the company has entered into a strategic agreement with Siemens Energy to supply rotating components for the energy sector over the next five years.
Another key development is Azad Engineering’s signed supply agreement with Arabelle Solutions, France, to supply critical rotating and stationary components for the global nuclear power generation industry. The value of this agreement is approximately Rs 340 crores (USD 40 million), further solidifying the company’s position in the energy sector.
With these recent wins and the expansion of its capacity, Azad Engineering’s order book now stands at approximately Rs 4,200 crores, which is expected to increase to Rs 4,500 crores. The company is on track to continue its strong growth, with a guidance of 25 per cent-30 per cent for FY25, driven by improvements in operating leverage, process efficiency, and backward integration.
As part of its growth strategy, Azad Engineering is progressing with its new plant’s CAPEX plan. Civil work is advancing as per schedule, in line with the order book and planned deliveries. The company has already placed orders for the required machines and equipment, with commissioning expected to begin in Q1 of FY26. Azad is set to increase its manufacturing capacity by 10x, and the new plant is expected to start generating revenue from FY26 onwards.
Today the shares of Azad Engineering are trading at around Rs 1598 each on the BSE. Additionally, the shares have delivered multibagger YTD returns of around 135 per cent.
Investors must keep this small-cap defence stock on their radar.
Disclaimer: The article is for informational purposes only and not investment advice.