Azad Engineering Ltd: A Precision Manufacturing Powerhouse on the Rise

Company Overview

• Incorporated: 1983
• Founder: Rakesh Chopdar
• Industry: Aerospace, Defense, Energy, Oil & Gas
• Specialization: High-precision, mission-critical components like 3D rotating airfoils and turbine blades
• Clients: Global OEMs like Siemens Energy, Rolls Royce, GE Vernova, Honeywell

What Makes Azad Engineering Stand Out?

Azad Engineering specializes in precision manufacturing for highly complex, life-critical components. Their products serve industries like power generation and defense, supplying key parts for gas, nuclear, and thermal turbines—essential for global power and defense sectors.

Key Products & Industry Segments

Energy & Oil & Gas (78% of Q1 FY25 Revenue)

• Products: Fixed airfoils, compressor airfoils, turbine blades, drill bits
• Applications: Power generation, marine propulsion, heat & power plants
• Clients: Siemens Energy, Mitsubishi, MAN Energy Solutions
• Growth: 73% revenue increase from FY22 to FY24

Aerospace & Defense (19% of Q1 FY25 Revenue)

• Products: Unison rings, valves, compressor housings
• Applications: Business jets, defense aircraft, helicopters
• Clients: Rolls Royce, Honeywell, GE Aviation
• Growth: 230% YoY increase in Q1 FY25; 120% growth from FY22 to FY24

Market Position & Key Clients

Azad Engineering is a crucial supplier to 5 of the world’s largest turbine manufacturers, commanding 70% of the global gas turbine market. In the aerospace sector, they are trusted by giants like Rolls Royce and Honeywell, with 45% of FY24 revenue coming from top clients, up from 33% in FY22.

Notable Contracts:

• Siemens Energy: 5-year contract for turbine components
• Rolls Royce: 7-year contract for aircraft engine parts
• GTRE/DRDO: Turbojet engine manufacturing for defense applications

Order Book & Expansion Plans

• Order Book: ?3,300 crore as of Q1 FY25, up from ?2,000 crore in FY23
• Growth Plan: Two new manufacturing facilities in Telangana, set to increase capacity tenfold by FY26
• Capex: ?120 crore for FY25 with an additional ?80-100 crore planned for infrastructure upgrades

Growth Projections & Opportunities

• Energy Segment: 13% YoY revenue growth in Q1 FY25
• Aerospace & Defense: A staggering 230% YoY growth in Q1 FY25
• Future Outlook: Projected 25%-30% revenue growth in FY25 driven by new contracts, facility expansion, and a growing order book
• Opportunities: Significant potential in the aerospace and defense sectors, expanding share with existing clients

Challenges

• Supply Chain: Global disruptions have led to increased freight costs, impacting logistics
• Forex Risks: 90% of revenue comes from exports, making the company vulnerable to currency fluctuations

Management & Strategic Focus

Led by Rakesh Chopdar, Azad Engineering's management prioritizes innovation, operational excellence, and strategic partnerships. Their focus is on expanding market share through acquisitions, such as the recent purchase of Leo Primecomp Pvt Ltd to broaden their portfolio in nuclear and oil & gas sectors.

Looking Ahead: Expansion & Innovation

Azad is on track for major growth:

• Facility Expansion: A new plant, operational by FY26, will multiply capacity tenfold
• R&D Investment: Focus on advanced manufacturing technologies to stay competitive globally

Conclusion

Azad Engineering is uniquely positioned to become a global leader in precision manufacturing, leveraging India’s growing defense and aerospace sectors. With a strong order book, strategic contracts, and aggressive expansion plans, the company is set to reach new heights in the industry.

Disclaimer: This article is for educational purposes only and does not constitute financial advice. Remember, the stock market is full of opportunities, but it’s essential to do your own research and consult with your financial advisor before making any investment decisions. Happy investing!