Azad Engineering Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Azad Engineering Ltd trades at ₹2,849, in a confirmed uptrend and 22 weeks into that stage. That is +34.8% against its own 200-day average. It sits at 100% of a 52-week range of ₹1,391 to ₹2,851. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 6 straight weeks.

Today the stock is in a confirmed uptrend — week 22 of stage 2, confirmed. At ₹2,849 it trades +34.8% versus its 200-day average and sits at 100% of its 52-week range (₹1,391–₹2,851).

Against the market, two honest reads. Cumulative: over the last 2.7 years the stock moved +312% while the NIFTY 500 moved +18% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 6 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

Azad Engineering Ltd's story is not scored yet against the markers our research file set on 17 May 2026. Where it sits in its own cycle: FIRST_EXPANSION.

Our read, 17 May 2026. A precision-engineering moat being built in real time — eight OEM-dedicated plants, a 11x order book, and single-digit wallet share with the world's biggest turbine makers.

From the numbers. PE at 102x is at 55th percentile of limited available history — IPO December 2023 means only ~6 quarters of data. The cycle trough was PE 17.6x in Dec 2023 (pre-IPO / listing-week pricing); current 102x represents…

From the price. Price stage 2, week 22 — above its 200-day line, relative strength rising.

From the research. A precision-engineering moat being built in real time — eight OEM-dedicated plants, a 11x order book, and single-digit wallet share with the world's biggest turbine makers.

🚨 Where they disagree. PE at 102x is at 55th percentile of limited available history — IPO December 2023 means only ~6 quarters of data. The cycle trough was PE 17.6x in Dec 2023 (pre-IPO / listing-week pricing); current 102x represents first-expansion driven purely by earnings (EARNINGS_DRIVEN decomposition). Smoothed PE contracting 21% YoY despite stock price appreciation signals that EPS growth is outpacing price. DII accumulation (9.84% Sep 2025 vs 5% Mar 2024) and FII increase (15.76% vs 6.98%) validate institutional conviction. The cycle_is_first_expansion flag is confirmed — this is a business repricing upward, not a late-cycle mean-reversion.

What is proven. A precision-engineering moat being built in real time — eight OEM-dedicated plants, a 11x order book, and single-digit wallet share with the world's biggest turbine makers.

What is not proven yet. Three documented cross-call contradictions: revenue guidance moderation, jet engine delivery slipped twice, WC target revised upward each call. Financial outcomes beat; strategic timelines need a buffer.

The test written in advance. Management Milestone Credibility — Strategic Timelines Carry 1-2Q Buffer — Management Milestone Credibility — Strategic Timelines Carry 1-2Q Buffer Rolls-Royce batch delivery (target H2 FY27): any further delay pushes commercial ramp to FY28+ by the next result.

The test written in advance. Working Capital Elevation — Inventory Cycle 200+ Days, FCF Suppressed — Working Capital Elevation — Inventory Cycle 200+ Days, FCF Suppressed H1 FY27 inventory days — management committed to 'drastic change' to ~200 days; H2 FY27 target 160-170 days by the next result.

The test written in advance. New Plant Qualification & Utilisation Ramp Risk — New Plant Qualification & Utilisation Ramp Risk Q1 and Q2 FY27 concalls: plant commissioning progress, customer audit timelines for new facilities by the next result.

Lever 6 · Order-book wins — BUILDING. Rs 6,500 Cr order book (~$700 M) distributed Energy/A&D/Oil&Gas at 11x FY26 revenue; five-year consumption at 25%+ pace; additional contracts undisclosed due to customer confidentiality. What proves it keeps working: Order Book Consumption — 11x Revenue, Five-Year Visibility. It stops working if Rolls-Royce batch delivery (target H2 FY27): any further delay pushes commercial ramp to FY28+.

Lever 8 · Demerger or value unlock — BUILDING. Four dedicated plants at different stabilisation stages; as utilisation exceeds 70-80%, EBITDA margin expected to breach 37% and asset turns move to 1.7-2.0x. What proves it keeps working: Operating Leverage Inflection — New Plants Moving to 70-80% Utilisation. It stops working if Rolls-Royce batch delivery (target H2 FY27): any further delay pushes commercial ramp to FY28+.

Lever 4 · Paying down debt — BUILDING. 1-1.5% wallet share with GE, Siemens, Mitsubishi, Safran, P&W, Rolls-Royce — structural multi-year runway that compounds independently of new customer wins. What proves it keeps working: Client Mining — Single-Digit Wallet Share With All Major OEMs. It stops working if Rolls-Royce batch delivery (target H2 FY27): any further delay pushes commercial ramp to FY28+.

Lever 1 · Operating leverage — BUILDING. Rolls-Royce airfoil first batch H2 FY27; P&W and Safran follow same cycle; HTT engine delivery imminent — all represent TAM expansion into higher-barrier, higher-margin product segments. What proves it keeps working: Next-Gen Qualification Pipeline — Rolls-Royce / P&W / Safran / HTT Engine. It stops working if Rolls-Royce batch delivery (target H2 FY27): any further delay pushes commercial ramp to FY28+.

Sources: our stock research file (17 May 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Azad Engineering Ltd reported ₹173 Cr of revenue in the Jun 26 quarter, +26.3% year on year. That is the 11th straight quarter of year-on-year growth. Over 5 years it has compounded at 37.4% a year. The last full year, FY26, came in at ₹603 Cr. The last four reported quarters add to ₹640 Cr.

Why this happened. The order book is the primary underpin of the multi-year thesis. At Rs 6,500 Cr net of FY26 deliveries, it represents 11x trailing revenue with firm customer production schedules. The composition — ~$400 M Energy, ~$200 M A&D, ~$100 M Oil & Gas — is confirmed with additional undisclosed contracts hinting at a larger true backlog. For the first time in the company's history, all three execution levers (capacity, qualifications, customer schedules) are simultaneously aligned. This is what makes the FY27 inflection structurally different from prior years when capacity constrained fulfilment.

FY26 revenue came in at ₹603 Cr (+31.9% on the year), capping 5 years at 37.4% compound. The latest quarter (Jun 26) printed ₹173 Cr, +26.3% year on year — the 11th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +29.2% growth against the decade's 37.4% — the current year is running slower than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +29.0% over the last 4 quarters against +32.8%/yr over the last 8 — rolling over; TTM profit +41.4% vs +43.5%/yr — stabilising.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Azad Engineering Ltd's operating margin is 37.0% in the Jun 26 quarter, +1.0 percentage points against the same quarter a year ago. That is the widest this company has ever printed on a full-year basis. Across 6 fiscal years the operating margin has ranged 23.0% to 37.0%. The current quarter sits inside that band.

Why this happened. Airfoil supply is the next frontier. The global market is dominated by Howmet Aerospace and PCC. Azad's 2.5-year qualification cycle with Rolls-Royce is described as fast by industry standards. Once Rolls-Royce enters commercial production (Q4 FY27/early FY28), P&W and Safran follow automatically — same qualification infrastructure. The HTT engine delivery validates indigenous engine manufacturing capability, a strategic moat for defence programs. These are not yet in the revenue model; they represent optionality worth pricing at a premium.

The latest quarter's operating margin is 37.0%, +1.0 pp against the same quarter a year ago. Across 6 fiscal years the operating margin has ranged 23.0%–37.0%, and FY26's 37.0% is the top of that band — a record year.

Why the margin moved: operating margin went +1.4 pp year on year while gross margin went +6.6 pp — the gain came mostly from the gross line: input costs and pricing.

Worth repeating from the valuation section: cheap against its own history on record margins is not the same thing as cheap — a record margin flatters every ratio built on top of it.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Azad Engineering Ltd earned ₹35.0 Cr of net profit in the Jun 26 quarter, +20.7% year on year. It is the 9th consecutive quarter of growth. Full-year FY26 profit was ₹134 Cr. The 5-year compound rate is 62.0%. That is 20.2% of the quarter's revenue. The same quarter a year earlier earned ₹29.0 Cr.

Jun 26 profit was ₹35.0 Cr, +20.7% year on year — the 9th consecutive quarter of growth. On the full year, FY26 printed ₹134 Cr (+54.0%), and the 5-year compound rate is 62.0%.

Why profit moved: revenue contributed +26.3% and the margin +1.0 pp — the quarter was revenue-led, with the margin roughly flat.

Pace comparison, last four quarters: profit +42.9% vs revenue +29.2%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years −26% of Azad Engineering Ltd's reported profit arrived as operating cash — a gap worth watching. In FY26 that was ₹−119 Cr of operating cash against ₹134 Cr of profit. After ₹573 Cr of capital spending, ₹−692 Cr was left as free cash.

FY26: operating cash of ₹−119 Cr against reported profit of ₹134 Cr, leaving free cash of ₹−692 Cr after ₹573 Cr of capital spending. Across the last 3 fiscal years the conversion rate is −26% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

🚨 Why conversion sits at −26%: the cash cycle stretched 1,643 days between FY21 and FY26 — more of each rupee of profit waits inside the cycle before arriving. Less than 70% of profit arriving as cash is the thing to watch on this page.

Router verdict: conversion is below par and the cash cycle has stretched 1,643 days — the next section's job is to find where the cash is stuck.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Azad Engineering Ltd's cash conversion cycle runs 1,720 days in FY26, up from 77 days in FY21. Capital spending ran ₹884 Cr over the last 3 years. At FY26 sales of ₹603 Cr each day of that cycle holds about ₹1.7 Cr, so roughly ₹2,842 Cr sits inside the business at any moment.

FY26: debtors at 189 days, inventory at 2,067 days — roughly 68.0 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of 1,720 days, looser than FY21's 77.

The full loop: cash goes out to suppliers and production on day 0; stock waits 2,067 days to sell; customers pay about 189 days after that; and suppliers themselves are paid at 536 days — netting out to the 1,720-day cycle.

In money terms: at FY26 sales of ₹603 Cr, each day of the cycle holds about ₹1.7 Cr — so the 1,720-day loop keeps roughly ₹2,842 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹884 Cr over the last 3 fiscal years against ₹103 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹257 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the working-capital loop is the cash sink the router flagged — watch the cycle, not the P&L.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Azad Engineering Ltd earns a ROCE of 12% in FY26. Return on invested capital clears the cost of that capital by −4.9 percentage points, so growth here is not yet paying for the capital it uses. The wiring behind it is 22.2% net margin on 0.27× asset turns.

FY26 ROCE is 12%.

🚨 Why the return is what it is — the wiring (FY26): 22.2% net margin × 0.27× asset turns × 1.44× balance-sheet leverage ≈ 8.6% on equity. Margin is doing the heavy lifting; leverage is modest — this is an earned return, not a borrowed one.

The capstone test — ROIC − WACC: 7.1% − 12.0% = a −4.9 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. Negative — growth at these returns destroys value until the returns recover.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.

Azad Engineering Ltd carries total debt of ₹474 Cr against shareholder equity of ₹1,529 Cr as of Mar 26, a debt-to-equity of 0.31. On the annual view that ratio went from 1.48 in FY23 to 0.31 in FY26. Read the returns elsewhere on this page with that leverage in mind.

Why this happened. The client-mining thesis is structural, not cyclical. Azad is a qualified and trusted supplier on the lowest-margin fringes of OEM bills of materials. As plant footprint grows and qualifications deepen, cross-category and cross-platform expansion happens organically. The Mitsubishi hot-section nozzle vane win — eight-year single-source combustor supply — is the clearest manifestation: Azad moved from periphery to the highest-barrier segment. This pattern is repeatable across the entire OEM roster.

Mar 26: total debt of ₹474 Cr against shareholder equity of ₹1,529 Cr — a debt-to-equity of 0.31. On the annual view, debt-to-equity went from 1.48 (FY23) to 0.31 (FY26). Read the returns on this page with that leverage in mind.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Promoters cut 10.1 points of Azad Engineering Ltd over 8 quarters, the biggest move on the register. That takes promoters to 55.8% of the company. Domestic institutions moved +6.9 points over the same window, to 10.3%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Promoters: −10.1 points over 8 quarters to 55.8%; Domestic institutions: +6.9 points over 8 quarters to 10.3%; Foreign institutions: +3.6 points over 8 quarters to 13.3%.

🚨 Why the register moved: promoters drove it (−10.1 points), absorbed on the other side by domestic institutions (+6.9 points) — distribution into the market’s bid.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Azad Engineering Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Azad Engineering Ltd trades at 132.0× P/E, at the pricey end of its own range (89th percentile). Its long-run median P/E is 101.9×, measured across 2.7 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Why this happened. Four dedicated plants at different stabilisation stages; as utilisation exceeds 70-80%, EBITDA margin expected to breach 37% and asset turns move to 1.7-2.0x.

Today's P/E of 132.0× is at the pricey end of its own range (89th percentile), against a long-run median of 101.9× measured over 2.7 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

🚨 Why the multiple sits where it does: over the past year annual EPS moved +52.2% against a +77.9% price move — the price outran earnings, pushing the multiple UP its own range.

Put together: the multiple is full against its own past, so the story rests on the earnings line underneath it, not the multiple.

Stage: Mixed Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Azad Engineering Ltd reads as mixed on its fundamental arc. Mixed — growth is normalizing off a hyper-growth base: profit growth has eased from +58.4% at its peak to +41.4% but is still expanding, ROCE holding at 12.4%. The read is built from 11 quarters across 4 curves, on full evidence.

Why it matters: when the curves disagree, the per-curve reads above matter more than any single verdict.

4-Factor Sector Score

64.0/100 — rank 4 of 25 in Aerospace & Defence - Equipments · 93% evidence confidence

Azad Engineering Ltd scores 64.0 out of 100 against the 25 companies it is compared with in Aerospace & Defence - Equipments, ranking 4. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 24.2 + 12.8 + 8.2 + 18.8 = 64. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Said versus delivered

What Azad Engineering Ltd's management promised, set against what actually arrived — 4 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

Rolls-Royce Qualification Timeline Pulled Forward · 8 August 2026. In May 2026, management expected the first Rolls-Royce qualification batch in H2 FY '27, with momentum only from Q4 FY '27 or early FY '28. In Aug 2026, management moved the first batch forward to the current quarter without explaining a change in the qualification schedule, which is a material acceleration for a qualification-dependent program.

Working Capital Target Deteriorated Versus Earlier Guidance · 8 August 2026. The Feb 2026 call targeted 140-150 working capital days by H2, while the Aug 2026 call targeted 160-180 days. The latest range no longer reaches the earlier target and represents a meaningful deterioration in cash conversion, with no explanation for why the 140-150 day objective was abandoned.

🚨 Turbojet Engine Delivery Missed Earlier Near-Term Timetable · 8 August 2026. The Feb 2026 call indicated that the engine could be delivered within a couple of months, and the May 2026 call described delivery as weeks away. The latest call identifies July 22 as the delivery milestone, indicating that the project took materially longer than the earlier near-term expectations without explaining the slippage.

Upward Revision of Target Inventory Cycle · 16 May 2026. During the Feb 2026 call, management established a specific target to reduce the inventory cycle to 140-150 days for the second half of the performance cycle, expressing high confidence in supply chain optimizations and a new distribution network. In the May 2026 call, management revised this target upward to 160-170 days for the same period. This indicates that the previously stated operational efficiencies and working capital improvements are moving more slowly than originally communicated to the market.

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions