Azad Engineering Limited (AZAD) AI Stock Analysis

• Market Cap: ₹105.71B
• Dividend Yield: N/A
• Average Volume (3M): 26.96K
• Price to Earnings (P/E): 77.3
• Beta (1Y): 1.73
• Revenue Growth: 35.25%
• EPS Growth: 51.17%
• Country: IN
• Employees: 1,212
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 5.37
• Shares Outstanding: 64,581,740
• 10 Day Avg. Volume: 14,118
• 30 Day Avg. Volume: 26,964
• PEG Ratio: 3.07
• Price to Book (P/B): 5.93
• Price to Sales (P/S): 17.67
• P/FCF Ratio: -34.51
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ₹1,900.00
• Price Target Upside: 12.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 19.86
• Revenue Forecast (FY): ₹6.07B

• Rating: 66 Neutral
• Price Target: ₹1,611.00 ▼(-4.61% Downside)
• Action: Reiterated Date: 10/04/25
• Date: Action: Reiterated 10/04/25

Azad Engineering Limited's strong financial performance, particularly in revenue growth and profitability, is a key strength. However, the high P/E ratio suggests overvaluation, and cash flow management needs improvement. Technical indicators show positive momentum but caution is advised due to potential overbought conditions.

Positive Factors

Revenue Growth

Sustained high revenue growth (~35% reported) points to expanding market share and product/service traction. Over a multi-month horizon this growth supports scale economics, enables reinvestment in capacity and R&D, and provides a platform to convert top-line gains into durable operating leverage.

Margin Sustainability

Consistently strong gross, EBIT and net margins indicate pricing power and efficient cost control. These margin characteristics are structural advantages that generate operating cash and resilience through cycles, supporting internal funding for growth and improving long-term return on invested capital.

Balance Sheet Strength

A robust equity position and manageable leverage provide financial flexibility for capital investment and downturns. High ROE indicates effective capital allocation; together these durable balance-sheet attributes reduce refinancing risk and support strategic initiatives without excessive reliance on external financing.

Negative Factors

Negative Free Cash Flow

Persistent negative free cash flow driven by heavy capex constrains the company’s ability to self-fund growth, repay liabilities, or return capital to shareholders. Over months this pressure can force external financing, raise interest costs, or delay strategic projects if capex intensity remains elevated.

Rising Liabilities

An uptick in total liabilities signals growing obligations that may raise leverage and interest exposure. If the trend continues, it could erode financial flexibility, increase funding costs, and reduce the buffer against operational shocks, making long-term investment and dividend policies more constrained.

Growth Sustainability Risk

Very rapid revenue expansion can be difficult to sustain and may mask one-off gains or channel/dealer inventory effects. Maintaining margins and operational controls while scaling requires continued execution; failure to do so could lead to margin compression or slower growth over the following quarters.

Azad Engineering Limited Business Overview & Revenue Model

Company Description

Azad Engineering Limited manufactures and sells engineered precision forged and machined components in India. The company offers body valve, housing mount, housing compressor, fan blisk, mixed flow impeller, housing fan, shell and housing, aero structure, turbine wheel, nozzle, unison ring, lever arm, hydraulic, fuel inerting, flight control, actuating system, and other products. It also provides airfoils/blades and components; various defense systems and critical components for missiles; industrial aerospace standard fluid distribution parts; rotors and stators, combustion components, and engine accessories, as well as fasteners and hardware, and special machined parts; and drill bits, slips, reamers, flex shafts, bonnets, frames, safety valves, rings, and hatch cover products. The company serves aerospace and defense, energy, and oil and gas industries. It also exports its products to Japan, the United States, Europe, the Middle East, the United Kingdom, and internationally. The company was incorporated in 1983 and is based in Hyderabad, India.

How the Company Makes Money

AZAD generates revenue primarily through the sale of its engineering products and services. Its key revenue streams include direct sales of precision components to original equipment manufacturers (OEMs), contract manufacturing services for custom engineering projects, and long-term maintenance and support agreements. The company also benefits from strategic partnerships with major industry players, which enhance its market reach and allow it to participate in larger projects. Additionally, AZAD invests in research and development to create innovative solutions that meet evolving market demands, further driving revenue growth.

Azad Engineering Limited Financial Statement Overview

Summary

Azad Engineering Limited shows strong revenue growth and profitability with high margins. The balance sheet is stable with a strong equity position, though increasing liabilities need monitoring. Cash flow management is a concern due to negative free cash flow from high capital expenditures.

Income Statement

Azad Engineering Limited demonstrates strong revenue growth, with a significant increase from the previous year. The company achieves high gross and net profit margins, reflecting efficient cost management and robust profitability. EBIT and EBITDA margins are also strong, indicating solid operational performance. However, the rapid revenue growth should be monitored to ensure sustainability.

Balance Sheet

The balance sheet shows a strong equity position, with a healthy equity ratio indicating financial stability. The debt-to-equity ratio is manageable, suggesting prudent leverage levels. Return on equity is impressive, reflecting effective use of shareholders' funds. However, the increase in total liabilities requires careful monitoring.

Cash Flow

While operating cash flow has improved, free cash flow remains negative, primarily due to significant capital expenditures. The operating cash flow to net income ratio is positive, indicating satisfactory cash generation relative to net income. However, the company faces challenges with free cash flow, necessitating attention to cash management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2022	Mar 2021
Income Statement
Total Revenue	4.99B	4.68B	3.41B	1.93B	1.21B
Gross Profit	4.34B	4.04B	2.92B	635.42M	309.71M
EBITDA	1.94B	1.72B	1.34B	640.97M	294.59M
Net Income	999.12M	873.18M	585.80M	294.57M	115.00M
Balance Sheet
Total Assets	0.00	18.61B	7.97B	4.04B	2.56B
Cash, Cash Equivalents and Short-Term Investments	6.97B	468.85M	587.62M	113.98M	17.74M
Total Debt	0.00	2.63B	394.33M	1.97B	877.13M
Total Liabilities	-13.93B	4.68B	1.52B	2.84B	1.65B
Stockholders Equity	13.93B	13.94B	6.45B	1.20B	908.92M
Cash Flow
Free Cash Flow	0.00	-2.40B	-822.89M	-962.08M	-156.11M
Operating Cash Flow	0.00	536.67M	-69.49M	209.39M	47.73M
Investing Cash Flow	0.00	-9.18B	-552.55M	-1.14B	-347.06M
Financing Cash Flow	0.00	8.77B	709.87M	959.11M	236.16M

Azad Engineering Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1688.85
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:AZAD, the sentiment is Positive. The current price of 1688.85 is above the 20-day moving average (MA) of 1638.77, above the 50-day MA of 1592.98, and above the 200-day MA of 1623.91, indicating a bullish trend. The MACD of 46.26 indicates Negative momentum. The RSI at 55.71 is Neutral, neither overbought nor oversold. The STOCH value of 65.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:AZAD.

Azad Engineering Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CUMMINSIND	72 Outperform	₹1.27T	63.22	―	1.14%	20.23%	18.69%
THEJO	70 Outperform	₹17.77B	53.19	―	0.30%	4.11%	2.40%
BLUESTARCO	67 Neutral	₹378.95B	110.38	―	0.51%	14.20%	3.84%
AZAD	66 Neutral	₹105.71B	77.32	―	―	35.25%	51.17%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KIRLPNU	60 Neutral	₹74.34B	40.77	―	0.97%	6.51%	-1.61%
ISGEC	58 Neutral	₹63.36B	24.01	―	0.59%	-4.14%	-35.66%

Azad Engineering Limited Corporate Events

Azad Engineering Retains Statutory Auditor After Firm Converts to LLP

Azad Engineering Limited has announced that its statutory auditor, M/s M S K A & Associates, Chartered Accountants, has converted from a partnership firm into a limited liability partnership (LLP) with effect from 13 January 2026, and will now operate under the name M S K A & Associates LLP with the same ICAI firm registration number. The company clarified that this is only a change in the constitution of the audit firm and that there will be no alteration to the existing audit engagement, with M S K A & Associates LLP continuing as Azad Engineering’s statutory auditor for the remainder of its approved tenure, thereby ensuring continuity in its audit oversight and regulatory reporting framework.

Azad Engineering Confirms SEBI Demat Compliance for December Quarter

Azad Engineering Limited has notified the stock exchanges that it has complied with Regulation 74(5) of the SEBI (Depositories and Participants) Regulations, 2018, for the quarter ended December 31, 2025. The company, along with its registrar and transfer agent KFin Technologies, confirmed that all details of securities dematerialized or rematerialized during the quarter have been furnished to every exchange where its shares are listed, and that the relevant securities continue to be listed on those exchanges, underscoring its ongoing adherence to regulatory and disclosure requirements for shareholders and market participants.

Azad Engineering to Attend Virtual Investor Conference

Azad Engineering Limited has announced that its officials will participate in an Investor Conference organized by J.P. Morgan on November 26, 2025, which will be held virtually. The meeting will involve 1×1 and group discussions, and the company has assured that no unpublished price-sensitive information will be disclosed, adhering to SEBI regulations. This engagement is part of Azad Engineering’s ongoing efforts to maintain transparency and communication with its stakeholders.