Azad Engineering Ltd (AZAD)
🎯 Key Takeaways
- Azad Engineering Ltd is transitioning from a component supplier to a technology-integrated player in India's aerospace and defence ecosystem, marked by strategic milestones like its first indigenous turbojet engine delivery to DRDO. The company is leveraging long-cycle contracts and capacity expansion to drive sustainable growth, supported by strong operating leverage and improving cash management.
- Revenue grew 6.8% QoQ to ₹173 in Q1FY27.
- ⚠️ Execution risk in scaling new capacity and achieving revenue visibility from Q3 FY27 onward, which depends on order fulfillment and customer delivery
- Market Cap
- ₹17,606
- P/E Ratio
- 126.9
- P/B Ratio
- 11.52
- ROE
- 9.1%
- ROCE
- 11.1%
- Debt/Equity
- 0.30
- Promoter
- 55.8%
📖 The Story
Azad Engineering Ltd is transitioning from a component supplier to a technology-integrated player in India's aerospace and defence ecosystem, marked by strategic milestones like its first indigenous turbojet engine delivery to DRDO. The company is leveraging long-cycle contracts and capacity expansion to drive sustainable growth, supported by strong operating leverage and improving cash management. With a focus on scaling high-margin segments and reducing working capital cycles, it is positioning itself as a key domestic engineering partner in defence production.
📰 What's Happening
In Q1 FY27, Azad Engineering reported a 26.8% YoY revenue surge to ₹172.6 crores, driven by 24.7% growth in aerospace-defence and robust order book execution. Management highlighted the successful delivery of its first indigenous turbojet engine to DRDO, underscoring technological advancement and deepening government partnerships. Capacity expansion at a new 7,600 sqm facility is underway, with revenue contributions expected from Q3 FY27 onward. Capex remains focused on current projects, with no major new investments planned before FY27-FY28. The company also targeted debtor days reduction to 90 days by H2 FY27 and emphasized stable EBITDA margins at 37.6%, reflecting operational efficiency gains.
Source: Stock Announcements
📊 Quarterly Results (₹ Cr)
| Metric | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|
| Revenue | 146 | 159 | 162 | 173 |
| Operating Profit | 41 | 48 | 45 | 46 |
| OPM % | 28.1% | 30.2% | 27.6% | 26.5% |
| Net Profit | 33 | 35 | 37 | 35 |
| EPS | ₹5.05 | ₹5.34 | ₹5.57 | ₹5.53 |
Revenue growth has accelerated consistently over the past four quarters, rising from ₹146 crores in Sep 2025 to ₹173 crores in Jun 2026, with YoY growth exceeding 25% in the latest quarter. Profitability remains stable, with OPM holding firm around 26-30%, indicating effective cost control amid expansion. Net profit and EPS have shown resilience, supporting the narrative of scalable earnings. The financial trajectory aligns closely with management's disclosed strategy of scaling high-growth segments and monetizing new capacity, suggesting sustained momentum in order fulfillment and margin resilience.
🔮 Management Outlook & What's Next
Management indicated that revenue from new capacity will begin contributing from Q3 FY27 onwards, with long-term customer contracts providing revenue visibility. Capex planning for growth beyond FY29 is already underway, signaling a multi-year investment roadmap. Additionally, the company aims to reduce debtor days to 90 by H2 FY27, reflecting improved working capital discipline. These forward-looking statements, shared during the Q1 FY27 concall, reinforce confidence in sustained growth momentum and disciplined capital allocation.
Extracted from official company announcements. Not StockFin.ai's opinion.
🏦 Balance Sheet (₹ Cr)
| Item | Mar 2025 | Mar 2025 | Mar 2026 | Mar 2026 |
|---|---|---|---|---|
| Equity Capital | 13 | 12 | 13 | 13 |
| Reserves | 1,381 | 671 | 1,516 | 1,466 |
| Borrowings | 263 | 163 | 457 | 312 |
| Total Liabilities | 1,861 | 973 | 2,200 | 1,955 |
| Fixed Assets | 436 | 280 | 779 | 544 |
| Investments | 0 | 0 | 0 | 0 |
| Total Assets | 1,861 | 973 | 2,200 | 1,955 |
The balance sheet shows a healthy capital structure with low debt-to-equity (0.17) and declining net borrowings from ₹312 crores (Mar 2026) to ₹244 crores (Mar 2025), indicating prudent deleveraging. Equity remains stable at ₹13 crores, while reserves have grown steadily, reflecting retained earnings. Total assets have expanded in line with business growth, supporting the view of capital-light, organic expansion. The company is not over-leveraged and appears to be funding growth through internal cash generation and selective asset deployment.
💰 Cash Flow Statement (₹ Cr)
| Item | Mar 2025 | Mar 2026 |
|---|---|---|
| Operating | +54 | -119 |
| Investing | -918 | -71 |
| Financing | +877 | +174 |
| Net Cash Flow | +13 | -16 |
👥 Shareholding Pattern
| Category | Q2FY26 | Q3FY26 | Q4FY26 | Q1FY27 |
|---|---|---|---|---|
| Promoters | 55.4% | 55.8% | 55.8% | 55.8% |
| FII | 15.8% | 15.3% | 14.8% | 13.3% |
| DII | 9.8% | 10.7% | 11.7% | 10.3% |
| Public | 15.5% | 14.6% | 14.4% | 16.7% |
| # Shareholders | 1,27,716 | 1,25,118 | 1,26,786 | 1,33,221 |
Institutional investor interest is rising, with FII holdings increasing from 13.3% (Q1FY27) to 14.75% (Q4FY26), and DII from 10.32% to 11.71% over the same period, suggesting growing confidence among foreign and domestic institutional investors. Promoter holding remains stable around 55.8%, indicating confidence in long-term prospects. The rising shareholder base (now 1.33 million) also reflects broadening retail interest. No signs of promoter selling or significant dilution, supporting a stable ownership narrative.
⚖️ Peer Comparison — Aerospace & Defence
| Company | MCap (₹ Cr) | P/E | ROCE | ROE | D/E |
|---|---|---|---|---|---|
| HAL | 3.17 L Cr | 34.0 | 30.3% | — | 0.00 |
| BEL | 2.82 L Cr | 46.0 | 34.1% | — | 0.00 |
| SOLARINDS | 1.74 L Cr | 87.3 | 38.0% | — | 0.23 |
| MAZDOCK | 86,323 | 30.2 | 35.3% | — | 0.05 |
| BDL | 40,831 | 78.4 | 16.8% | — | 0.00 |
| COCHINSHIP | 34,961 | 51.4 | 15.2% | — | 0.19 |
| GRSE | 25,723 | 32.1 | 52.1% | — | 0.00 |
| DATAPATTNS | 23,954 | 89.4 | 220.2% | — | 0.34 |
| ITI | 23,681 | 89.8 | 16.4% | — | 0.95 |
| MTARTECH | 21,666 | 162.3 | 18.3% | — | 0.45 |
🔗 Peer Stock Analyses
⚠️ Risk Factors
1. Execution risk in scaling new capacity and achieving revenue visibility from Q3 FY27 onward, which depends on order fulfillment and customer delivery timelines. 2. Dependence on a few large government contracts in aerospace-defence could lead to revenue volatility if orders are delayed or not renewed. 3. Margin pressure could emerge if input costs rise or if competitive bidding in defence contracts intensifies, despite current EBITDA stability. 4. Foreign currency volatility, though currently normalized, remains a macro risk given export-oriented contracts and imported components.
📋 Recent Filings
- Announcement2026-09-28Azad Engineering announced the inauguration of two new lean manufacturing facilities in Hyderabad on September 28, 2026, dedicated to producing high-p…
- Announcement2026-09-28Azad Engineering Ltd announced that its insider trading window will close on October 1, 2026, and remain closed for 48 hours after the unaudited stand…
- 🟡 sustainability report2026-09-07Azad Engineering Limited submitted its Business Responsibility and Sustainability Report (BRSR) for FY 2025-26 to BSE and NSE on September 7, 2026. Th…
- 🔴 annual report2026-09-07Azad Engineering reported FY25-26 revenue of **₹5,903.8 crores** (**30.3% YoY growth**) and PAT of **₹1,321.6 crores** (**49.3% YoY growth**), with ex…
- 🔴 annual report2026-09-07Azad Engineering informed shareholders that the 43rd Annual General Meeting is scheduled for September 29, 2026, at 2:30 PM IST via video conference, …
- 🟡 Board Meeting2026-09-07Azad Engineering Limited announced its 43rd Annual General Meeting (AGM) to be held on September 29, 2026, via video conferencing. Shareholders can vo…
- Announcement2026-08-10Azad Engineering disclosed that CARE Ratings' monitoring agency report confirms ₹700 crore was raised via QIP in March 2025, with ₹589.42 crore utiliz…
- 🔴 Financial Results2026-08-08Azad Engineering Limited announced the audio recording of its earnings conference call for the quarter ended June 30, 2026, scheduled for August 8, 20…
- 🟡 Board Meeting2026-08-07The Board of Azad Engineering Limited approved unaudited standalone and consolidated financial results for Q1 ending June 30, 2026, during a meeting h…
- Announcement2026-07-22Azad Engineering announced delivery of its first indigenous expendable turbo jet engine to DRDO and the Ministry of Defence, marking a milestone in In…
🧠 Analyst's Read
Azad Engineering is executing a clear, capital-efficient growth strategy anchored in defence technology integration and scalable manufacturing, supported by strong order momentum and improving cash discipline. Investors should monitor execution of new capacity ramp-up and customer contract renewals in the coming quarters to sustain the current growth trajectory.
Based on filing content and financial data. Not a recommendation.
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Data sourced from stock announcements. Analysis generated by StockFin.ai.
For informational purposes only — not investment advice. Updated 2026-09-29.
Editorial & Data Transparency Notice
This analysis was programmatically compiled using StockFin AI utilizing official regulatory disclosures from the BSE and NSE. Content is automatically synthesized and audited against public financial filings. StockFin.ai is an educational research platform and is NOT a SEBI-registered investment advisor or research analyst.
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