Azad Engineering Secures ₹700 Crore Contract with Mitsubishi

4 Nov 2024 , 01:27 PM

Azad Engineering Ltd. announced on Sunday a long-term contract and price agreement (LTCPA) with Mitsubishi Heavy Industries Ltd., sparking a 13% surge in its stock on Monday.

This contract involves supplying highly engineered rotating and stationary airfoils for advanced gas and thermal power turbines to meet global power generation needs.

At the time of writing on November 4, 2024 at 1:10 pm, shares of Azad Engineering Ltd is trading at ₹1589.05 which is a 8.71% gain than the previous close. Azad Engineering Ltd stock has gained a total of 134% in the last one year, and 132% gain since the beginning of the year.

The current phase of this LTCPA is valued at $82.89 million (approximately ₹700 crore) and will be carried out over five years. In October, Azad Engineering received a ₹134 crore order from Honeywell Aerospace Ltd. for high-complexity components to support global aviation industry demand.

The company aims to increase its wallet share with Mitsubishi from 1% to between 2% and 5% over time, with revenue impact expected in three to four quarters.

As of the June quarter, 78.4% of Azad Engineering’s revenue was from Energy & Oil and Gas, and 18.5% from Aerospace & Defence. Export sales make up 91% of Azad’s revenue, reflecting its strong international presence.

Azad Engineering operates four manufacturing facilities in Hyderabad, covering 20,000 square meters, and was listed in 2023 with an IPO price of ₹524.