Shares of Azad Engineering, a leading manufacturer of aerospace components and turbines, rose 4.5% to ₹1626 apiece in early trade on Monday, September 29, after the company signed a new long-term contract and price agreement with Mitsubishi Heavy Industries Limited (MHI), Japan.
Post-market hours on Friday, the company announced that it had entered into a contract with MHI for the supply of highly engineered and complex rotating and stationary airfoils for advanced gas and thermal power turbine engines. These components will support MHI’s global demand in the power generation industry. The contract is valued at ₹651 crore.
This agreement is incremental to the earlier contract signed on November 3, 2024. Termed as “Phase 2” of the collaboration, the company said it represents a robust step toward strengthening its long-term strategic partnership with Mitsubishi Heavy Industries. With this addition, the combined value of contracts with MHI now stands at ₹1,387 crore, significantly boosting the company’s order book.
The company closed the June quarter with an order book of ₹6000 crore, which provides multi-year revenue visibility and reinforces the structural strength of the business. It also delivered robust figures in the quarter, with numbers beating the Street estimates, leading the analysts to retain their bullish outlook on the stock.
ICICI Securities has reinitiated coverage on the stock with a BUY rating and a target price of ₹1,882, based on 50x P/E FY28E EPS, and Choice Institutional Equities has also upgraded the rating on the stock to buy from reduce and lifted its target price to ₹1,865 apiece.
The company maintains its 30% revenue growth and 33-35% margin guidance for the next few years, backed by new capacity additions.
Azad Engineering share price trend
Though the company’s long-term outlook remains promising, the shares have seen only marginal movement amid broader market weakness. So far in September, they have gained 3.73%, building on a nearly 4% rally in August.
For the calendar year to date, the stock has declined 7.81%, following a massive surge of 148% in 2024. At the current trading price of ₹1,586, the stock trades 24% below its all-time high of ₹2,080, recorded in January 2024.
Recent target price upgrades from multiple brokerage firms indicate that the stock has the potential to rise by up to 19% from current levels.
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