Azad Engineering shares: Up 85% in 6 months; stock to buy, says ICICI Securities - Check revised share price target

Azad Engineering Ltd has gained 85% in the past six months, and the stock has received a fresh boost from ICICI Securities, which retained its BUY rating and raised its target price to ₹3,200 from ₹1,900 earlier. The brokerage has rolled forward its valuation to FY29 and applied a target multiple of 55 times estimated FY29 earnings per share (EPS).

The revised target reflects the company's expanding manufacturing capacity, improving order visibility, and expectations of stronger earnings over the coming years. "We are introducing FY29 estimates and rolling over our target multiple to FY29, arriving at a target price of INR 3,200 (55x FY29E EPS)," ICICI Securities said.

Azad Engineering's stock has already delivered strong returns across multiple timeframes. The shares have gained around 3% in one month, 38% in three months, and 77% over the past year, highlighting the sharp re-rating witnessed in the stock.

GE Vernova expansion strengthens order visibility

According to the brokerage, a key development has been the inauguration of two dedicated manufacturing facilities for GE Vernova's gas power business at Azad Engineering's Centre of Excellence & Innovation Centre in Hyderabad. Spread across 15,200 square metres, the facilities represent the company's largest single-tranche capacity addition so far.

The new facilities take Azad Engineering's dedicated GE footprint to three units and deepen its integration with the global energy major. Of the seven dedicated facilities planned by the company, six have now been commissioned, along with a forging unit, it noted.

ICICI Securities expects follow-on large orders from GE Vernova, which could provide the newly commissioned facilities with an estimated five to six years of visibility. The brokerage also stated that only one of the seven planned dedicated facilities remains to be commissioned, with completion expected by the end of FY27.

"Out of the 7 planned facilities, Azad now has only one dedicated facility remaining to be commissioned, which is expected by end-FY27. This marks the start of the execution phase, which will likely drive earnings for the next 2-3 years," ICICI Securities said.

With most of the planned capacity now coming online, ICICI Securities expects the focus to shift towards converting the new capacity into higher throughput and earnings, while working capital normalises. The brokerage also expects Azad Engineering to announce another phase of growth capital expenditure to maintain growth visibility beyond FY30.

The company has also expanded its presence in the aerospace and defence segment. In July 2026, Azad Engineering delivered India's first indigenous turbojet engine to GTRE/DRDO. Weapon-integration testing and subsequent certification are expected to determine the path towards serial production, potentially opening another avenue for future growth.

Management has maintained its guidance of more than 25% revenue CAGR, along with an operating margin range of 32-35%. However, ICICI Securities believes the guidance could remain conservative given the prevailing geopolitical environment. The brokerage has built in a 33% revenue CAGR between FY26 and FY29, with margins estimated at 37-38%, partly supported by rupee depreciation.

Q1 Results

The company's latest quarterly performance also reflected strong operating momentum. For the quarter ended June 30, 2026, consolidated net profit rose 20.2% year-on-year to ₹35.7 crore, while revenue from operations increased 26% to ₹172.5 crore from ₹137 crore in the year-ago quarter.

EBITDA grew 31% to ₹64.3 crore from ₹49.1 crore, while the EBITDA margin expanded to 37.3% from 35.8%. On a standalone basis, total income increased to ₹174.5 crore from ₹143.7 crore, while quarterly profit rose to ₹36.4 crore from ₹30 crore.

Azad Engineering manufactures precision-engineered components for the energy and power generation, aerospace and defence, and oil and gas industries. Its products are supplied to markets including the US, UK, China, Japan, Saudi Arabia, Singapore, Germany and the Middle East.

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