Multibagger stock Azad Engineering spikes 9.5% on ₹960 crore order from GE Vernova

Multibagger Stock: Shares of Azad Engineering, a leading manufacturer of aerospace components and turbines, surged 9.5% to ₹1,732 apiece in early trade on Thursday, January 16, after securing a significant order.

On Wednesday, the company announced through an exchange filing that it had signed a long-term supply agreement with GE Vernova International LLC, USA. The agreement involves the supply of highly engineered, complex rotating and stationary airfoils for advanced gas turbine engines to meet global demand in the power generation industry. The value of this contract is worth ₹960 crore.

The company has recently garnered significant attention on Dalal Street on the back of consistent order wins. In November, the company won an order from Arabelle Solutions France, a French company, for the supply of critical and highly complex rotating and stationary components, which is worth ₹340 crore.

During the same month, it secured a ₹700 crore order from Mitsubishi Heavy Industries Limited, Japan (MHI) for the supply of highly engineered & complex rotating and stationary airfoils for advanced gas & thermal power turbine engines.

Investors have also reacted positively to these developments, as the stock in November jumped by 20%. Looking at the company's financial performance, it ended the September quarter and H1FY25 with the highest-ever quarterly and half-yearly performance.

The revenue from operations for Q2FY25 and H1FY25 has jumped by 34.5% and 32.2%, respectively, compared to the same period last year. Meanwhile, the PAT has improved by 8.3% to ₹21 crore in Q2FY25 and stood at ₹38 crore in H1FY25, marking a 42.3% improvement compared to the previous period last year.

The Aerospace & Defence segment’s contribution to the revenues has nearly doubled in H1FY25 compared to H1FY24, driven by products moving to the production stage, as per the company's Q2 earnings filing. 

Stock up 75% in 12 months

The company's shares have delivered stellar performance, gaining 75% over the last 12 months. The shares made their Dalal Street debut in December 2023, and with the current trading price of ₹1,733, they are up by 220% from the issue price of ₹524.

In June, the stock surpassed the ₹2,000 mark for the first time, reaching a new all-time high of ₹2,080. However, the stock has witnessed some profit booking since reaching its peak and is now down by 19.27% from that level.

Multiple brokerage firms maintained a positive outlook on the stock during the second half of the last calendar year. In early October, global brokerage firm Investec initiated coverage with a ‘buy’ rating and a target price of ₹1,850.

Earlier, domestic brokerage ICICI Securities also raised its target price for Azad Engineering stock to ₹2,450 per share, maintaining a 'buy' rating—marking a record target for the stock. It noted that the company's enhanced cost efficiencies and product quality have led to a larger share of clients' wallets.

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