Synopsis: Aerospace and defence stock jumped 6% as Q3 revenue rose 31% YoY to ₹156 crore, EBITDA grew 40%, and net profit increased 42%, driven by strong segment growth and export demand.
A manufacturer of aerospace components and turbines and supplies its products to original equipment manufacturers (OEMs) in the aerospace, defense, energy, and oil and gas industries has come into the spotlight after its shares jumped by 6 percent, attracting attention from investors and market watchers.
With a market capitalization of Rs. 10,670.20 crore, the shares of Azad Engineering Limited were trading at Rs. 1,652.90, up by 4.67 percent from its previous day’s closing price of Rs. 1,579.10 per equity share. The stock has touched an intraday high of Rs. 1,679.80, implying an increase of 6.37 percent from previous day’s closing price.
Q3FY26 Results
The company reported revenue of Rs. 156 crore in Q3FY26, up 31.1 percent YoY from Rs. 119 crore in Q3FY25 and 9.1 percent QoQ from Rs. 143 crore in Q2FY26, reflecting strong growth momentum both annually and sequentially.
EBITDA for the quarter rose to Rs. 60 crore, marking a 39.5 percent YoY increase from Rs. 43 crore in Q3FY25 and a 17.6 percent QoQ improvement from Rs. 51 crore in Q2FY26, indicating robust operational performance and margin expansion.
Net profit stood at Rs. 34 crore, up 41.7 percent YoY from Rs. 24 crore in Q3FY25 and slightly higher 3 percent QoQ compared to Rs. 33 crore in Q2FY26, showing healthy bottom-line growth driven by improved revenues and operating efficiency.
In Q3FY26, the company reported strong growth across both segments. Energy & Oil & Gas revenue rose to Rs. 127.09 crore from Rs. 95.21 crore in Q3FY25, a 33.5 percent increase, while Aerospace & Defence grew to Rs. 26.44 crore from Rs. 19.89 crore, up 33 percent.
Total income reached Rs. 164.43 crore versus Rs. 124.05 crore last year, marking 32.6 percent growth. On the geography front, exports contributed Rs. 141.94 crore (up 26.5 percent YoY), and domestic sales surged to Rs. 13.86 crore from Rs. 6.41 crore, a 116.2 percent jump.
Employee expenses increased primarily due to the addition of new employees as part of capacity expansion. Depreciation also rose because of new capacity additions, reflecting investment in long-term assets. Interest from fixed deposits contributed to higher other income during the period.
As of December 25, the company’s net debt stood at Rs. 157.5 crore, with finance costs rising due to additional loans taken to support business growth. The company continues to focus on leveraging new capacity additions and operational efficiencies to sustain healthy growth and strengthen profitability.
Brokerage View
Choice International has upgraded Azad Engineering to Buy following the recent correction in the stock price. It has set a revised target price of Rs. 1,900 (Upside of 20 percent), valuing the company at 45x FY28E EPS, compared to the earlier multiple of 50x, reflecting moderated near-term growth expectations.
The positive stance is driven by AZAD’s strong operational performance, marked by margin expansion and disciplined execution, along with a robust order book of approximately Rs. 65 billion (~14.2x FY25 revenue), providing strong earnings visibility. As key programs transition from qualification in FY26 to peak utilisation by FY28, volume-led operating leverage is expected to structurally lift earnings.
The company is well-positioned to benefit from global aerospace and energy capex cycles, with 85–95 percent export exposure supporting growth amid strengthening India–US and India–EU industrial ties. Additionally, easing tariffs on critical raw materials and the upcoming delivery of India’s first indigenous jet engine platform provide further cost-efficiency benefits and long-term optionality.
Azad Engineering Limited manufactures and supplies precision-engineered components for aerospace, defense, energy, and oil & gas industries in India and internationally. Its product portfolio includes airfoils and blades for aircraft engines, turbine components for nuclear and thermal power, aerospace actuator systems, and specialized parts for flight control, propulsion, hydraulics, and oil & gas sub-systems.
The company also offers 3D rotating airfoil portions and other critical components for defense missiles, spacecraft, and power generation solutions. Incorporated in 1983, Azad Engineering is headquartered in Hyderabad, India.
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