Azad Engineering stock hits 20% upper circuit, up for 2nd day in a row on Rolls-Royce deal
Shares of Azad Engineering, an aerospace components and turbine manufacturer, were locked in the 20% upper circuit limit in today's intraday trade, reaching a historic high of ₹854.30 per share.
Shares of Azad Engineering, an aerospace components and turbine manufacturer, were locked in the 20% upper circuit limit in today's intraday trade, reaching a historic high of ₹854.30 apiece. This upward movement follows a 5.30% gain in the previous trading session, driven by the company securing a substantial order from Rolls-Royce.
On Monday, during market hours, Azad Engineering informed investors through an exchange filing that Rolls-Royce has signed a 7-year long-term contract with the company to produce and supply critical engine parts for their defence and military aircraft engines.
Having debuted on Indian exchanges on December 28, 2023, at a price of ₹677 per share, which was a 29.3% premium to the IPO price of ₹524 per share, the stock has witnessed a remarkable 63% increase based on its current price.
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The IPO received a phenomenal response from all section of investors, as it was subscribed by 80.65 times.
The company is one of the key manufacturers of its products in the energy, aerospace and defence, and oil and gas industries. It manufactures highly engineered, complex, mission-critical, and life-critical components. The company competes with manufacturers from China, Europe, USA, and Japan.
Its customers include global OEMs across the energy, aerospace, defence, and oil and gas industries, such as General Electric, Honeywell International Inc., Mitsubishi Heavy Industries, Ltd., Siemens Energy, Eaton Aerospace, and MAN Energy Solutions SE.
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The company has supplied critical components to major commercial aircraft manufacturers for B737, B737 Max, B747, B777, B777X, A320, A350, A355, A350 XWB, and Gulfstream G550, and it is currently in discussions to supply components for new engine platforms to various kinds of aircraft manufacturers, according to the company's RHP report.
In terms of financials, the company improved its revenue from ₹124 crore in the financial year 2020 to ₹251 crore in the financial year 2023, representing a CAGR of 27% during this period with an adjusted EBITDA margin of 31.61% in the financial year 2023.
Most of its revenues are derived from exports to global OEMs, backed by long-term contracts, and as of September 30, 2023, 89.69% of its total revenue was from contracts with customers located outside India.
Disclaimer: We advise investors to check with certified experts before taking any investment decisions.
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