Target: ₹1,900
CMP: ₹1,648.20
Azad Engineering has delivered a strong operational quarter, marked by meaningful margin expansion and continued execution discipline. The company is steadily scaling up its global top-tier OEM relationships, reinforcing its positioning in high-precision aerospace and turbine supply chains. Visibility is exceptionally strong owing to a robust order book of about ₹6,500 crore (14.2x FY25 revenue). As programs move from qualification in FY26 to anticipated peak utilization by FY28, we expect volume-led operating leverage to structurally lift earnings.
We believe that Azad Engineering stands to benefit from global aerospace and energy capex cycles in the next few years. Its 85–95 per cent export exposure positions it favorably amid deepening India–US and India–EU industrial cooperation. Additionally, easing of tariffs on critical raw materials should support cost-efficiency. The upcoming delivery of India’s first indigenous jet engine platform provides optionality.
That said, the management continues to guide for a measured, about 35 per cent topline growth trajectory despite having a large backlog, indicating calibrated scaling up rather than aggressive ramp-up. In view of moderate near-term growth expectation, we trim our target multiple to 45x (earlier 50x). Following the recent correction, we upgrade the stock to Buy (from Add) with a TP of ₹1,900, valuing it at 45x FY28E EPS.
Published on February 16, 2026