Azad Engineering stock soars over 14% on ₹700 crore order from Mitsubishi
Azad Engineering's shares rose 12.6% to ₹1,645 after announcing a ₹700 crore contract with Mitsubishi Heavy Industries for turbine components. This follows recent order wins, including contracts with Honeywell and Siemens.
Stock Market Today: Shares of Azad Engineering, a leading manufacturer of aerospace components and turbines, surged 14.3% to ₹1,670 apiece in early trade on Monday, November 4, after securing a significant order.
On Sunday, the company announced via an exchange filing that it had signed a Long-Term Contract & Price Agreement (LTCPA) with Mitsubishi Heavy Industries Limited (MHI), Japan, to supply highly engineered, complex rotating and stationary airfoils for advanced gas and thermal power turbine engines to meet global demand in the power generation industry.
The total value of the signed contract is ₹700 crore. "This phase of the contract, valued at $82.89 million ( ₹700 crore), is a robust step toward cementing our strategic relationship with Mitsubishi Heavy Industries Limited, Japan (MHI),” the company stated in its filing.
This marks Azad Engineering’s second order win in less than two weeks; on September 24, the company secured a contract from Honeywell Aerospace ISC, USA, worth $16 million, for the manufacture and supply of highly complex components to meet global demand in the aviation industry.
Earlier in July, the company signed a five-year agreement with Siemens Energy Global GmbH & Co. to manufacture and supply critical rotating components for advanced gas and thermal turbine engines to meet Siemens' global demand.
With multiple order wins, the stock has gained significant traction on Dalal Street. Additionally, in early October, global brokerage firm Investec initiated coverage with a ‘buy’ rating and a target price of ₹1,850.
The brokerage highlighted that Azad Engineering is the only Indian company providing 3D airfoils to global OEMs, emphasising the industry's high entry barriers. The brokerage projects Azad's profit after tax (PAT) to grow at a 40 per cent CAGR over FY 2024-2027, driven by recent order wins, diversification, and reduced finance costs.
Earlier, domestic brokerage ICICI Securities had also raised its target price for Azad Engineering to ₹2,450 per share, maintaining a 'buy' rating—marking a record target for the stock. It said the company's enhanced cost efficiencies and product quality have led to a larger share of wallets from clients.
“In our view, Azad is on a long runway of significant earnings growth, with significant TAM still available,” said the brokerage.
Azad Engineering specialises in precision engineering solutions for aerospace and defence, power generation, and oil & gas OEMs. The company aims to revolutionise the Indian manufacturing landscape with precision processes exceeding global standards.
Stock up 138% in CY24
The company's shares have posted an impressive rise this year, climbing from ₹699.30 to the current trading price of ₹1,670—a gain of 138%. In June, the stock surpassed the ₹2,000 mark for the first time, reaching a new all-time high of ₹2,080.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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