Azad Engineering Ltd Management Discussions

Industry Overview and Business Context

AZAD is a build-to-print manufacturer of precision-engineered critical components serving three regulated manufacturing ecosystems: energy and power generation, aerospace & defence, and oil & gas. Components supplied into all three operate under extreme mechanical, thermal and pressure loads across asset lives, which are measured in decades. A single component failure can result in anything from an unplanned outage to catastrophic loss.

The criticality of these components for the OEMs has shaped how these supply chains are built. Original equipment manufacturers qualify a small number of suppliers and retain them across programme cycles, rather than tendering repeatedly on price. Qualification cycles routinely run 30 to 48 months, require demonstrated engineering and metallurgical capability, and demand zero-defect tolerance at parts-per-million levels. The duration and cost of this process remain the principal barrier to entry for a new supplier, and it tends to rise as programmes mature, rather than ease. The structure consequently favours suppliers already inside it, namely those with an established qualification history, a documented execution record, and customer relationships spanning multiple programme generations. AZAD has steadily built that position since 2008.

Demand across the Companys addressable markets remained supportive through FY 2025-26. In energy, capital investment in gas, nuclear, hydrogen and thermal turbine capacity continued to grow as utilities and industrial generators responded to rising baseload and grid-stability requirements, with incremental demand arising from data centre build-out linked to artificial intelligence workloads. In the aerospace industry, commercial aircraft build rates extended their recovery, while the defence sectors spending stayed elevated against a heightened geopolitical threat environment. In the domestic market, policy emphasis on indigenisation of defence manufacturing and propulsion technology strengthened further. Investments in exploration, production and drilling infrastructure held steady over the year, supporting demand for the components the Company has begun supplying under its Oil & Gas vertical.

Global and Industry Overview

The Company supplies into three end markets that follow different cycles but share a common structure. Each rests on a large installed base of capital equipment with an operating life measured in decades, and each generates demand along two distinct paths: new equipment build, which moves with the prevailing investment cycle, and the scheduled replacement of components into equipment already in service, which is governed by operating hours and inspection intervals rather than by the capital expenditure environment of any given year.

The defining characteristic of FY 2025-26 across all three markets was that the constraint on output moved decisively to the supply side. Order books at the major original equipment manufacturers lengthened materially, while the capacity available to serve them, particularly in high-temperature alloy forging, precision machining and specialist coating and finishing, expanded far more slowly. Lead times for long-cycle components extended across all three industries. Original equipment manufacturers responded by contracting further forward than has been customary, consolidating volumes with suppliers already qualified to produce, and in an increasing number of cases underwriting dedicated capacity in place of ordering against periodic purchase orders.

Energy and Power Generation

Global electricity demand has continued to grow, supported by the electrification of transport and industrial heat, industrial and residential load growth across the world, and the build-out of data centre capacity to serve artificial intelligence workloads. Utilities and independent power producers have responded by ordering dispatchable capacity. The effect has been most pronounced in gas turbines, where order intake at the largest manufacturers has run ahead of installed production capacity and delivery slots are now committed several years forward.

Alongside new capacity, the installed base itself generates continuing demand. Turbines in service require the scheduled replacement of rotating and stationary components through operating lives measured in decades, on maintenance cycles rather than the investment cycle of any given year. Demand from industrial applications, where turbines serve captive and process power requirements, adds a further stream that is not tied to utility capital spending. Components of these classes can only be sourced from suppliers qualified against the relevant part numbers, and within the gas turbine, combustion and hot section content sits at a materially higher tier of manufacturing difficulty than compressor-side content, with a correspondingly smaller population of suppliers qualified to produce it at volume.

Conventional thermal generation continues to account for the majority of installed dispatchable capacity worldwide and, in a number of markets, is still being added. Steam turbines in coal and combined-cycle service carry the same classes of forged and machined rotating and stationary content as gas turbines, held to comparable approval requirements, and the operating fleet generates a continuing requirement for replacement components through scheduled outages. In India, a continuing programme of thermal capacity addition intended to meet rising peak load extends this demand into the domestic market.

Nuclear generation has returned to the policy agenda in several major markets, supported by the same load growth and by decarbonisation commitments that require firm low-carbon capacity. Activity spans life extension and uprating of the operating fleet, the restart of units previously retired, new large-scale construction, and the development of small modular reactors. The conventional island, and the steam turbine in particular, carries long lead-time forged and machined content held to approval requirements comparable to those applied in gas turbines, and the qualified supplier base for that content is correspondingly narrow. In India, planned nuclear capacity additions and the opening of the sector to private participation extend this demand into the domestic market.

Aerospace and Defence

Commercial air traffic has moved past pre-pandemic levels and continued to grow through the year. Order backlogs at the principal airframe and engine manufacturers now represent several years of output at current build rates, and the limitation on deliveries has been the supply chain rather than demand, with shortages of structural castings, forgings, complex machined components, engine components and skilled labour holding production below announced targets for successive years.

This has two consequences for component demand. Requirements for new equipment are underpinned by a backlog largely insulated from short-term movements in traffic. And because operators cannot take delivery of new aircraft on the schedules they had planned, existing fleets are being flown longer and maintained more intensively, lifting shop visit volumes and spare component demand alongside it. Both effects fall on the qualified component base — engine airfoils and rotating hardware, auxiliary power unit content, actuation and structural assemblies alike — and most acutely on those categories subject to the most demanding qualification requirements and served by the narrowest supplier base.

The technical direction of the industry reinforces this. Each successive engine generation operates at higher turbine entry temperatures and pressure ratios in pursuit of fuel burn and emissions targets, placing greater demands on airfoil metallurgy, cooling geometry, coating systems and dimensional tolerance. The alloys involved are correspondingly more difficult to machine, and the population of suppliers able to hold the required tolerances repeatably at production volume narrows with each generation. The same pattern holds across the component hierarchy: as content moves from cooler, simpler sections toward hot section and higher-integrity parts, the qualified supplier base contracts at every step.

Defence budgets have risen substantially and, of greater consequence for the supply chain, have shifted in composition. Heightened global tensions have translated into multi-year procurement programmes rather than single-year appropriations, giving the industrial base a longer planning horizon than it has had in some time. Spending priorities have moved toward the replenishment of munitions inventories depleted by recent conflicts and toward the expansion of unmanned, loitering and precision-strike systems, a category that requires expendable propulsion units in volumes the established engine industry was not configured to supply. In India, policy has continued to press the indigenisation of defence manufacturing through phased import restriction, domestic content requirements and the wider involvement of private industry in propulsion and aero-engine development, an area historically confined to state undertakings.

Oil and Gas

The equipment supply chain in this sector is organised by its principal manufacturers around two areas, presently on distinct trajectories: industrial and energy technology, and oilfield services and equipment.

Industrial and energy technology covers turbo machinery, compression, gas technology equipment and the associated process and control solutions. It has been driven by investment in gas infrastructure. A substantial wave of liquefaction capacity is presently under construction, concentrated in North America and the Middle East, and each train requires mechanical drive turbines, centrifugal compression trains, valves and flow control equipment ordered years ahead of commissioning, giving the principal turbo machinery vendors order backlogs extending several years forward. Adjacent applications in carbon capture compression and hydrogen handling, while smaller in scale, draw on the same equipment base and the same approved supply chain. The rotating and stationary content involved is closely related to that used in power generation turbines and is held to comparable approval standards, so the qualified supply base overlaps substantially with the one serving the turbine manufacturers.

Oilfield services and equipment covers well construction, completions, production systems and pressure control equipment used across surface and subsea installations, in product families that include drill bits, slips, bonnet frames and hatch covers used in exploration and midstream systems. It has tracked a steadier investment cycle. Within it, demand has been moving toward applications operating under more demanding pressure, temperature and corrosion conditions, manufactured in more specialised materials and to tighter tolerances than has historically been typical of the market.

As in aerospace and in power generation, the population of suppliers able to hold these specifications repeatably at production volume narrows as the duty becomes more severe. Both areas draw on the same base of precision forged and machined components and apply comparable qualification disciplines, so approvals earned on one side carry substantially into the other, and approvals earned in power generation carry into both.

Business Overview and Competitive Positioning

AZAD commenced manufacturing operations in 2008 and has since established itself as a qualified supplier of highly engineered, mission- and life-critical precision-forged and machined components to global original equipment manufacturers. The Company competes against a narrow field of established suppliers based principally in the United States, certain European nations, China and Japan. Exports accounted for 93% of revenue in FY 2025-26, with the Company supplying OEMs across 11+ countries.

The component portfolio centres on three-dimensional rotating and stationary airfoils, alongside a widening range of non-airfoil precision components: special machined components, combustion assemblies, hydraulic and actuation systems, and, most recently, fully assembled and integrated propulsion systems. These serve customers across the Energy, Aerospace & Defence, and Oil & Gas segments.

The Companys strategy over the period under review has been to deepen wallet share with existing qualified customers, move into higher-complexity and higher-value component categories, and convert multi-year qualification investments into commercial production revenue.

Financial performance during the year reflected the initial outcomes of this strategy. The Aerospace & Defence segment crossed Rs.1,000 million in annual revenue for the first time, an inflection the Company regards as significant. Consolidated revenue grew 31.8% to Rs.6,029.8 million. EBITDA margin stood at 37.4%, expanding over the prior year as newly commissioned capacity contributed volumes and operating leverage came through. Profit after tax grew 54.3%, aided by margin expansion. On a standalone basis, revenue grew 30.3% and profit after tax 49.3%, broadly consistent with the consolidated trend.

Energy Segment : Consolidating Over Fifteen-Years of Franchise

The Energy segment remains the Companys largest revenue contributor at 79.7% of standalone revenue. It rests on relationships with GE Vernova, Siemens Energy and Mitsubishi Heavy Industries among others, each running beyond a decade, secured through qualification processes completed progressively over the Companys operating history. These three customers together account for a substantial share of global gas and steam turbine manufacturing capacity.

During FY 2025-26, the relationship with Mitsubishi Heavy Industries, already anchored by an existing supply agreement for rotating and stationary airfoils, was extended through an eight-year single-source contract for hot- section nozzle vane components used in gas turbine combustion systems. Hot-section combustion components sit at a materially higher tier of manufacturing complexity than the compressor-side airfoils that form the historical core of the Companys Energy business, and only a small number of manufacturers worldwide are currently qualified to produce them.

To support execution of the expanding order book, the Company commissioned dedicated customer-specific manufacturing facilities for GE Vernova and Siemens Energy during the year, and operationalized the Mitsubishi Heavy Industries unit inaugurated shortly before the close of FY 2024-25. This forms part of a broader shift away from shared general-purpose capacity toward facilities purpose-built for individual customer programmes. Management believes this approach reduces execution risk on committed programmes and reinforces the switching costs that already favour qualified incumbents. These facilities are expected to progress toward stable operating levels over the coming year, with peak utilisation anticipated over a longer horizon as volumes ramp in line with customer offtake schedules.

In nuclear, AZAD is amongst the few qualified producers of turbine airfoils in India. The Company is a qualified supplier for Arabelle Solutions, an EDF subsidiary, following an audit and qualification process conducted over several years. The approval is global in scope rather than tied to a single project, positioning the Company for nuclear capacity additions both domestically alongside NPCIL and in international markets.

Aerospace & Defence: From Qualification to Production

The Aerospace & Defence segment crossed Rs.1,000 million in revenue for the first time during the year. This reflects the conversion of qualification efforts for some OEMs undertaken over several years into commercial production, as some of these programmes moved from development toward supply.

The relationship with Rolls-Royce, established under a long-term contract for civil aircraft engine airfoils, progressed further during the year, with commercial-scale supply expected to commence over the coming fiscal year as remaining qualification milestones are achieved. The Company also finalised a new supply agreement with Pratt & Whitney Canada, extending its customer base to another major aero-engine manufacturer, while qualification activity with Safran continued in parallel. Management considers the current stage of these relationships broadly analogous to the Companys position with its Energy customers in earlier years, when qualification stage engagements converted into recurring commercial volume as capability and wallet share were established over successive programme cycles.

The most significant development in the segment during the period was the advancement of Indias first indigenous expendable turbojet engine in the 350 kg thrust class, developed for the Defence Research and Development Organisations Gas Turbine Research Establishment. Under an arrangement secured in an earlier fiscal year, the Company is the sole industry partner responsible for the manufacture, assembly, integration and delivery of the Advanced Turbo Gas Generator engine, a propulsion system intended for anti-ship missile, unmanned aerial vehicle and target drone applications. Management regards this as a material strategic milestone: it extends the Companys capability beyond component supply into full propulsion system integration, a capability held by a small number of companies globally.

Oil & Gas: An Emerging Third Vertical

The Oil & Gas segment remains the smallest of the Companys three end markets. Revenue during the year was modest, reflecting activity concentrated in qualification and pre-production work. The segments principal relationship is a multi-year agreement with Baker Hughes for the supply of complex precision machined components used across its Industrial & Energy Technology and Oilfield Services businesses.

Shortly after the close of FY 2025-26, the Company inaugurated its fourth dedicated manufacturing facility, located in its Tuniki Bollaram campus and built specifically to serve the Baker Hughes relationship. Management expects this facility to support a step-up in segment revenue over the coming fiscal year as qualified components move into serial production.

SEGMENTAL PERFORMANCE

Energy and Oil & Gas remained the largest revenue contributors, carried by demand for critical rotating and stationary components in turbines and energy infrastructure. Segment revenue grew 34.2% to H4,811.3 million. Aerospace & Defence grew 25.4% to H1,012.6 million, crossing the H1,000 million mark for the first time on the back of wider participation in qualified component categories with global customers. Segment figures are presented on a standalone basis.

Revenue by segment (standalone)	FY 2025-26 ( Rs. million)	FY 2024-25 ( Rs. million)	Growth
Energy and Oil & Gas	4,811.3	3,586.3	34.2%
Aerospace and Defence	1,012.6	807.4	25.4%
Total revenue from operations*	5,903.8	4,529.3	30.3%

*includes Other Operating Revenue, which is not depicted in the segmental breakdown shown above. Full details can be found in Note 23 to Standalone Financial Statements.

Entry Barriers and Sustainability of Competitive Position

The Companys competitive positioning across all three segments rests on entry barriers created by the qualification process itself rather than by market conditions. Qualification of a new component supplier by a global original equipment manufacturer typically requires 30 to 48 months, during which supplier and customer jointly commit engineering time and capital to design validation, first article inspection and process certification, well in advance of any commercial shipment.

Components of this class carry zero-defect tolerance requirements measured in parts per million, reflecting their mission- and life-critical function. This standard leaves minimal margin for manufacturing variability and, consequently, favours suppliers with mature, proven quality systems and a demonstrated history of performance.

Once qualified, suppliers benefit from meaningful switching-cost protection. The customer has itself borne substantial cost and invested time in approving the supplier, and requalifying an alternative would require repeating that investment in its entirety. Original equipment manufacturers therefore do not generally reconsider incumbent suppliers in the absence of a substantial cost differential or a sustained performance failure.

The Company has, over its operating history, achieved qualification across more than 45 distinct manufacturing processes and in excess of 1,700 individual components. Management estimates that replicating a portfolio of comparable breadth would require a new entrant 15 to 20 years under similar capital and technical conditions.

CAPACITY EXPANSION AND CAPITAL ALLOCATION

Capacity expansion during the year remained tied to firm contracted customer commitments rather than anticipated demand, consistent with the capital allocation discipline management has maintained over recent periods. As at April 2026, the Company had commissioned four dedicated customer-specific manufacturing facilities, with further phased capacity under construction.

On completion of both phases, the programme will take the Companys manufacturing footprint to approximately 182,000 square metres, roughly nine times the area at the start of the expansion, distributed across all three business verticals and dedicated to specific OEM programmes. Management continues to view this expansion as directly linked to the order book, which which stood at H65,000 million at year end provides revenue visibility across the three segments over a multi-year horizon.

WORKING CAPITAL AND FINANCIAL DISCIPLINE

Long qualification cycles, extended production lead times and the inventory required to support newly ramping customer programmes together hold working capital at an elevated level relative to revenue. This is structural to the business rather than a function of the years activity.

Working capital intensity remained a focus for management during the year. The Company expects a gradual normalisation of working capital days over the coming fiscal periods as recently qualified programmes, particularly within Aerospace & Defence, mature from development stage activities into steadier states of production.

Capacity expansion and working capital requirements were funded through a combination of internal accruals, debt and equity capital raised in recent periods. Management expects capital efficiency to improve progressively as recently commissioned facilities reach normalised utilisation.

Key financial ratio	FY 2025-26	FY 2024-25	Change	Explanation
Debtors turnover (times)	2.22	2.31	(0.09)	Not a major variance
Inventory turnover (times)	0.22	0.39	(0.17)	Decrease was on account of improved cost of goods sold margin and increase in inventories (mainly due to capacity additions during the year).
Debt coverage ratio (times)	4.13	4.81	(0.68)	Not a major variance
Current ratio (times)	3.29	5.30	(2.01)	The ratio decreased primarily due to reduction in cash and cash equivalents consequent to utilisation of QIP proceeds towards capital expenditure.
Debt - equity ratio (times)	0.29	0.17	0.12	The increase is on account of new loans raised during the current year.
EBIDTA profit margin (%)	36.9	35.5	1.4	Not a major variance
Net profit margin (%)	22.4	19.5	2.8	Not a major variance
Return on Capital Employed (%)	10.7	8.7	2	In FY 2024-25, the ratio decreased due to an increase in capital employed arising from the issue of fresh shares. In FY 2025-26, ROCE improved marginally due to capex activities.

Strategic Position Assessment

Category	Dimension			Commentary
	Qualification base			Over 1,700 qualified components and more than 45 specialised processes, each secured through multi-year OEM validation cycles that capital deployment alone cannot replicate or shorten.
	Relationship longevity			Principal customer engagements exceed ten years with high repeat business, deepened by dedicated manufacturing facilities commissioned for individual OEMs.
	Engineering capability			Components machined to tolerances measured in microns, with defined component lines supplied against parts-per-million defect standards demanded by mission- and life-critical applications.
Strengths	Value chain positioning			The portfolio has widened from cold-section into hot-section content, and from discrete components into assemblies and sub-assemblies, moving the Company into work with fewer qualified competitors. Specialised machined parts extend the range in the other direction, broadening the base beyond heritage airfoil lines.
	Acquisitions			Acquisitions have extended the Group into large-format manufacturing and internalised specialised surface treatment, adding capability and capturing value previously outsourced.
	Capacity and scale			New facilities materially expand installed capacity and are configured around specific customers to support committed long-cycle programmes.
	Asset fungibility			Commissioned assets and recruited personnel are deployable across customers and sectors, limiting the risk of stranded capacity should a single programme or end-market slow.
	Margin profile			The Company sustains high margins on complex, low-volume work while pricing competitively against international suppliers.
	Segment concentration			Energy and Oil & Gas contributed 81.5% of FY 2025-26 revenue, concentrated among three OEMs. Rebalancing through aerospace and defence and Oil & Gas remains a multi-year undertaking.
	Input dependency			Customer-mandated raw materials are sourced from a limited pool of approved mills, restricting the Companys ability to substitute suppliers or negotiate on supply terms.
Challenges	Working capital intensity			Working capital days remain elevated relative to revenue, reflecting inventory carried in support of ramping programmes. Normalisation over the coming periods governs the conversion of reported profit into operating cash.
	Capital maturation lag			Substantive contribution from new manufacturing lines is expected from FY 2026-27, until which return ratios will reflect the timing gap inherent to a scaling cycle.
	Talent and execution			Precision machining and process engineering talent remains scarce. Retention and capability transfer are prerequisites to ramping new facilities on schedule.
Category		Dimension	Commentary
		Structural demand across served markets	Electricity demand is rising on electrification and data centre growth, with gas, nuclear and hydrogen-ready capacity expanding and OEM backlogs at elevated levels.
Opportunities		Progression into assemblies and systems	Moving from components into assemblies, sub-assemblies and complete systems raises realisation per unit of installed capacity and widens the addressable market.
		Aerospace and defence indigenisation	Aerospace accounts for approximately USD 200 million of the order book, scaling as global OEMs establish Indian manufacturing footprints under procurement mandates.
		Group operating leverage	AZAD VTCs specialised coatings capability and AZAD Primes manufacturing of components outside AZADs own scope allow the Group to serve customers across a wider portion of their requirement.
		Trade and geopolitical environment	Evolving trade policy may affect input costs, logistics and customer procurement timelines, with the direction and timing of measures outside the Companys control.
Threats		Qualification dependency	Qualification status is contingent on sustained quality and delivery performance. Withdrawal by a major OEM would remove revenue that could not be substituted within a comparable timeframe, given the multi-year cycles required to qualify elsewhere.
		Raw material pricing	Raw material cost is contractually passed through to customers, with the Company absorbing price movement within a 5% band. Margin exposure is accordingly limited to movement inside that band.
		Technological progression	Rising component complexity requires sustained investment in process capability and equipment to hold qualification standing on next-generation programmes.

Internal Control Systems and Their Adequacy

AZAD maintains an internal control framework designed to safeguard assets, ensure accurate and reliable financial reporting, strengthen operational efficiency and maintain compliance with applicable laws. It is aligned to established governance practice and reviewed periodically so that it keeps pace with the Companys scale and risk profile.

Defined policies, standard operating procedures and control mechanisms operate across procurement, manufacturing, quality management, finance and compliance. The discipline that governs a qualified manufacturing process governs the control environment around it, supporting risk management and the timely identification and correction of operational or financial irregularities.

Integrity is treated as an operating requirement. The Company maintains a vigil mechanism, including a Whistleblower Policy, giving employees and stakeholders a secure and confidential channel to report unethical conduct, fraud, financial impropriety or regulatory breaches, without fear of retaliation.

The Internal Audit function, operating under the oversight of the Audit Committee of the Board, reviews the adequacy and effectiveness of the control environment and risk management processes. Observations and recommendations are tracked to closure, with corrective actions implemented to strengthen controls and improve processes.

The Company continues to strengthen its internal control systems, risk management practices and ethical framework in support of sustainable growth and long-term stakeholder value.

Human Resources

Through FY 2025-26, the Company strengthened its organisational architecture in step with expanding scale and rising complexity, adding senior professionals, deepening functional capability, sharpening cross-functional coordination and building the systems the next phase of growth will require. The Company closed the year with a workforce of more than 2,500 employees, a robust growth from the prior years, with the addition concentrated in the engineering, manufacturing and quality functions required to operate the customer-dedicated facilities commissioned during the period.

In mission- and life-critical manufacturing, capability resides in people as much as in machines. As dedicated facilities ramp up and long-duration OEM programmes advance, AZAD continues to invest in talent development, technical training, leadership development and a safety culture held to the same standard as the components the Company makes.

Continuous learning, structured training, employee engagement and clear career paths support an inclusive workplace in which people can build long careers, and in which operational excellence, quality and delivery reliability are carried as individual responsibilities rather than departmental ones.

Information Technology

Information technology underpins manufacturing execution, production planning, quality documentation, programme monitoring, inventory control, finance, compliance and reporting. In mission- and life-critical work, traceability is not an administrative function: every component must carry a verifiable record of material, process and inspection across its service life, and that record depends on the integrity of the systems holding it. As the Company scales dedicated facilities and deepens its participation in global OEM programmes, AZAD strengthened systems across planning, ERP, shop-floor execution, quality management and governance during the year, tightening coordination, control over manufacturing workflows and readiness for higher throughput as new facilities stabilise.

During FY 2025-26, the Company continued to invest in strengthening its digital and information-technology environment. Key initiatives included enhancement of the ISO/IEC 27001:2022-aligned Information Security Management System, modernisation of network and security infrastructure, improvement of server and backup capabilities, strengthening of identity and access controls, and enhancement of centralised security monitoring and ICT-log retention.

The Company also improved the resilience of its IT environment through redundant connectivity, network segmentation, secure remote access, business-continuity planning and periodic review of critical-system recovery requirements.

During the year, the Company also evaluated enhanced SIEM and Security Operations Centre capabilities for improved threat monitoring, incident detection and response. These initiatives form part of the Companys ongoing programme to strengthen cybersecurity, protect stakeholder information, maintain business continuity and support the digital requirements of its expanding operations.

Outlook and Risk Factors

Looking ahead, the Company expects continued growth across each of its three segments, supported by its expanding and diversifying order book, the ongoing ramp-up of newly commissioned dedicated manufacturing facilities, and the deepening of relationships with both existing and newly qualified original equipment manufacturers. Management has consistently guided towards sustained revenue growth in excess of 25% per annum. Segmental contribution is also expected to undergo meaningful changes, with Energy contributing between 55% and 60% of revenue over four to five years, and Aerospace & Defence and Oil & Gas carrying the balance.

The Company remains subject to a number of risks inherent to its business model and industry. A meaningful proportion of the Companys order book depends on the successful and timely conversion of qualified programmes into production volume, a process that, notwithstanding the Companys strong execution track record, can be subject to timeline variability given the technically demanding and often first-of-kind nature of the components and systems involved. The Companys working capital and capital expenditure requirements are likely to remain structurally elevated for a sustained period as capacity continues to expand ahead of full utilisation, and the Companys ability to generate free cash flow on a sustained basis is expected to develop only gradually as this expansion cycle matures. The Companys revenue remains heavily weighted towards export markets and towards a concentrated customer base, notwithstanding recent diversification, among a relatively small number of large global original equipment manufacturers, exposing the Company to cyclicality in global commercial aerospace production, energy sector capital expenditure, and defence procurement activity. Certain growth initiatives, including exploratory international expansion, remain subject to evolving geopolitical and market conditions that may affect their timing. The Company continues to monitor these risks closely as part of its ongoing strategic and operational planning.

CAUTIONARY STATEMENT

This Management Discussion and Analysis contains forward-looking statements based on the current expectations, assumptions, projections and estimates of the management of AZAD Engineering Limited. These statements carry risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied.

Factors that could influence performance include economic conditions, geopolitical developments, customer procurement schedules, regulatory changes, raw material availability, currency movements, technological change, capacity ramp-up timelines, qualification outcomes, supply chain disruptions and other internal or external factors affecting the industry or the Company.

The Company assumes no obligation to publicly update or revise any forward-looking statement, whether from new information, future events or otherwise. Readers should exercise caution when interpreting forward-looking statements.

AZ A DW

Corporate Information

Board of Directors	Rakesh Chopdar - Executive Chairman and CEO Murali Krishna Bhupatiraju - Managing Director Jyoti Chopdar- Whole-time Director Vishnu Malpani- Whole-time Director Madhusree Vemuru- Independent Director Subba Rao Ambati- Independent Director Michael Joseph Booth - Independent Director Deepak Kabra- Independent Director
Key Managerial Personnel	Ronak Jajoo - Chief Financial Officer G. Praneeth Abhishek - Company Secretary, Compliance Officer and Head Legal
Statutory Auditor	M S K A & Associates LLP (Formerly know as M S K A & Associates), Chartered Accountants FRN: 105047W/W101187 1101/ B, Manjeera Trinity Corporate, JNTU-Hitec City Road, Kukatpally, Hyderabad, Telangana-500072
Secretarial Auditor	Ashish Kumar Gaggar Flat No. 201, IInd Floor, Lake View Towers, Safari Nagar, Kothaguda, Kondapur, Hyderabad, Telangana-500084, India
Registrar and Share Transfer Agent	KFin Technologies Limited 301, The Centrium, 3 rd Floor, 57, Lal Bahadur Shastri Road, Nav Pada, Kurla (West), Mumbai - 400 070, Maharashtra, India
Bankers	Union Bank of India IndusInd Bank Ltd. ICICI Bank Ltd. HDFC Bank Limited Tata Capital Limited Bandhan Bank Limited Yes Bank Limited
Registered Office	90/C, 90/D, Phase-I, I.D.A, Jeedimetla, Hyderabad, Telangana-500055, India
Plant Locations	90/C, 90/D, Phase-I, I.D.A, Jeedimetla, Hyderabad 500055, Telangana, India. 90/E, IDA, Jeedimetla, Hyderabad, Medchal Malkajgiri, Telangana-500055, India Plot No D42/43, Phase V, TSIIC, IDA, Jeedimetla Industrial Park, Quthbullapur Mandal, Hyderabad, Medchal Malkajgiri, Telangana-500055, India Plot No 63/A , Phase I, TSIIC IDA, Survey No 298, Jeedimetla Village, Industrial Park, Quthbullapur Mandal, Hyderabad, Medchal Malkajgiri, Telangana, 500055, India Plot No. 17/B, Pashamylaram, Isnapur, Sangareddy, Telangana-502307, India SY 340, Plot No 85 to 92 & 118 to 123, Industrial Park - Tuniki Bollaram, Siddipet, Telangana-502279, India Plot No 30 & 31 Phase 5, IDA, Jeedimetla, Hyderabad, Medchal Malkajgiri, Telangana, 500055, India