ICICI Securities has issued a buy rating on Azad Engineering with a target price of ₹1,900, as reported by Moneycontrol. The brokerage's recommendation is based on the company's impressive Q3FY26 results, where EBITDA jumped 45% year-on-year to ₹622 million, marking an all-time-high. This strong performance was driven by revenue growth of 32% YoY, supported by new facilities and robust operational execution.
According to ICICI Securities research, Azad Engineering has built up a robust order book of over ₹65 billion, positioning the company for significant expansion. The brokerage expects the company to treble revenues over the next 3-4 years as it continues to increase its manufacturing capacities. This growth trajectory is supported by the company's strong positioning in the energy business, where most customers are experiencing record order books themselves.
ICICI Securities has projected revenue/EBITDA/PAT CAGRs of 32%/35%/42% over FY25-28E respectively, as reported by Moneycontrol. The brokerage expects EBITDA margins to progress from 36% in FY26E to 37% by FY28E, driven by a higher proportion of aerospace and defense orders. The target price of ₹1,900 is based on 50x FY28E EPS valuation methodology.
As reported by ICICI Securities, the company is well-positioned to benefit from India's improving aerospace segment outlook and record order books among its energy business customers. The brokerage notes that revenue growth will likely be limited only by the company's ability to build and ramp up facilities and acquire necessary skilled manpower in a timely manner. This creates a positive revenue runway for the next decade.
