Azad Engineering News: Share Price Soars After Rs 700 Crore Mitsubishi Deal

Shares of Azad Engineering surged by over 13% on November 4, 2024, following the announcement of a significant long-term contract with Mitsubishi Heavy Industries worth Rs 700 crore.

Azad Engineering News: Share Price Soars After Rs 700 Crore Mitsubishi Deal

Azad Engineering’s shares soared over 13 per cent on November 4, 2024, as the company bagged a humongous long-term order of Rs 700 crore from Mitsubishi Heavy Industries. The share of Azad Engineering went up by 11 per cent in one day and 137 per cent in the calendar year, while Nifty 50 is up by 11 per cent till 9:30 am.

Azad Engineering's Big Deal with Mitsubishi Heavy Industries

This move of Azad Engineering is seen to propel its shares to new heights when it recently announced that the market had been informed that the company had signed a strategic Long Term Contract & Price Agreement (LTCPA) with Mitsubishi Heavy Industries, Japan. This agreement ensures that the company will come up with very complex and high-class rotary as well as fixed airfoils for leading gas and thermal power turbine engines in the world class. That meets all the requirements of the Power Generation sector around the globe. Estimated at almost USD 82.89 million, roughly Rs 700 crores, this deal marks Azad’s largest international foray so far, also going a little further down into the trenches to strategize with MHI.

This is a hard contract phase in establishing our permanent strategic relationship with Mitsubishi Heavy Industries Limited, Japan (MHI). The contract explicitly proclaims Azad’s potential in the manufacture of highly engineered components for critical application and makes Azad an advanced manufacture supplier worldwide.

Earlier Deals and Performance in the Market

The Mitsubishi contract forms an offshoot of an original agreement signed with Honeywell Aerospace, for the supply of high-precision components to the aviation sector, sealed in October 2024 in Rs 134 crore. It’s another strategic step which also clearly states that Azad Engineering is keen on broadening its client list and then digging deeper roots there in the aerospace and energy sector.

Although share prices have gone up over the past two to three weeks, the chart between July and October points to trading at low levels. The fresh rallies do depict some positive ones ushered in by new contracts for various prospects of future businesses with its customers.

Azad Engineering Financial Performance

Azad Engineering has declared a high growth in its financial for this year. According to Q1 FY25, the company has reported a net sales growth of 29.6% in the company’s Q1 FY25 at Rs 98.41 cr from last year. Net profits have also improved to a great extent by 131.5% at Rs 17.13 cr, which has been reflected by successful cost management and revenue diversity for the company.

Share Price Target and Investor View

Investors are still gaining confidence about the Azad Engineering’s IPO share price target. Recent significant contract announcements in combination with the strategic win on their long-term contract with MHI and the good revenue associated with the Honeywell deal have made investors believe this company will definitely benefit financially. Many consider Azad Engineering’s share will continuously move upwards on consistent increase in financial activities, increased business opportunities due to these high-tech manufacturing industries and sectors.

Those wins put Azad Engineering firmly in a very strong place, showing the company’s ability to provide complex pieces for global industry giants in the form of Mitsubishi and Honeywell. As it continues to strengthen its growth trajectory, these wins also cement the firm’s appeal as an investment opportunity. Its attractive year-to-date profit margin combined with upside from strategic wins puts Azad Engineering as the company long-term investors might want to keep an eye on.

Disclaimer:

All above recommendations are of the market analysts. Neither the author, nor the brokerage firm, nor Stockstoday.in will be responsible for any loss arising out of any such decision taken based upon this information. All users are cautioned to take their own expert advice prior to making any investment decision.

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