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Execution risk in ramping new plants
View Risks →Azad Engineering Limited — Q4 FY26
Azad Engineering delivered a strong Q4 FY26 with consolidated revenue of 603 crore (up 32% YoY) and PAT of 134 crore (up 54.5% YoY).
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Azad Engineering delivered a strong Q4 FY26 with consolidated revenue of 603 crore (up 32% YoY) and PAT of 134 crore (up 54.5% YoY). Growth was driven by ramp-up of four new dedicated customer facilities, a robust order book of 6,500 crore (11x FY26 revenue), and a landmark single-source contract from Mitsubishi Heavy Industries for hot-section nozzle vein segments. Management guided for 25%+ revenue growth in FY27, supported by capacity utilization improvements and working capital normalization. Key risks include execution risk in ramping new plants and potential delays in the Saudi Arabia JV with Baker Hughes due to geopolitical tensions.
अजाद इंजीनियरिंग ने वित्त वर्ष 2026 की चौथी तिमाही में शानदार प्रदर्शन किया। कंपनी की कुल आय 603 करोड़ रुपये रही, जो पिछले साल से 32% ज्यादा है। मुनाफा 134 करोड़ रुपये हुआ, जो 54.5% बढ़ा। यह वृद्धि चार नए ग्राहक कारखानों के चालू होने, 6,500 करोड़ रुपये के मजबूत ऑर्डर बुक (जो सालाना आय का 11 गुना है) और मित्सुबिशी हेवी इंडस्ट्रीज से एक बड़े अनुबंध के कारण हुई। कंपनी ने अगले साल 25% से अधिक आय वृद्धि का अनुमान लगाया है। लेकिन नए कारखानों को चालू करने में देरी और सऊदी अरब में बेकर ह्यूजेस के साथ संयुक्त उद्यम में भू-राजनीतिक तनाव के कारण संभावित देरी जैसे जोखिम हैं।
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Order Book
6,500 Cr
Flat vs Q3
Rolling order book remains at 6,500 crore, representing 11x FY26 revenue, with strong forward visibility.
Energy & Oil & Gas Revenue (FY26)
481 Cr
+34% YoY
Energy and oil & gas segment contributed 81.5% of FY26 revenue, growing 34% YoY.
Aerospace & Defense Revenue (FY26)
102 Cr
+25% YoY
Aerospace & defense crossed 100 crore milestone for the first time, growing 25% YoY.
Dedicated Facilities Commissioned
4
+2 in FY26
Four dedicated lean manufacturing facilities inaugurated since listing, with two commissioned in FY26.
What Changed vs Last Quarter
NEW
Revenue growth of 25%+ for FY27
Management reiterated guidance of approximately 25%+ topline growth for the current financial year, driven by ramp-up of new facilities and qualified products.
NEW
Working capital normalization to 160-170 days by H2 FY27
Management guided that inventory days will reduce to around 200 days in H1 FY27 and further to 160-170 days in H2 FY27 as new plants ramp up.
NEW
Balance four dedicated facilities to be commissioned in FY27
The remaining four of the eight planned dedicated facilities will be commissioned during FY27, with civil work and ramp-up ongoing.
NEW
Oil & gas segment to contribute materially in FY27
With the Baker Hughes facility inaugurated in April 2026, oil & gas revenue is expected to ramp up and become a material contributor in FY27.
DROPPED
25%+ Revenue Growth Over Coming Years
Management expects revenue to grow at 25% or more annually, backed by order book and plant readiness.
DROPPED
EBITDA Margin Guidance of 33-35%
Long-term EBITDA margin target of 33-35% is sustainable, with current quarter at 38.6%.
DROPPED
New Plant Stabilization by FY27, Max Utilization by FY28
New facilities for GE, Mitsubishi, and Siemens will stabilize operations by FY27 and reach maximum utilization by FY28.
DROPPED
Aerospace Revenues Starting from FY27
Revenues from new aerospace customers (Rolls-Royce, etc.) are expected to begin in FY27.
NEW RISK
Execution risk in ramping new plants
Management acknowledged that commissioning and stabilizing new facilities involves significant upfront investment and time before revenue conversion, posing execution risk.
NEW RISK
Geopolitical tension impacting Saudi Arabia JV
An analyst raised concerns about the Saudi Arabia JV with Baker Hughes; management confirmed timelines have shifted due to the current situation, though the opportunity remains.
NEW RISK
Working capital strain from inventory buildup
Inventory buildup to support new plant ramp-ups has elevated working capital days; management expects normalization but any delay could pressure cash flows.
NEW RISK
Dependence on customer qualification cycles
Growth relies on timely customer qualifications and audits; any delays in these processes could impact revenue conversion from the order book.
RISK GONE
New Plant Qualification Delays
Stabilization of new plants is complex and may take longer than expected, delaying revenue ramp-up.
RISK GONE
Workforce Availability and Training
Hiring and training skilled workers at scale is challenging; any shortfall could impact production targets.
RISK GONE
Working Capital Days Higher Than Target
Inventory days are elevated due to ramp-up; management targets 140-150 days but current levels are higher.
RISK GONE
Dependence on Few Large OEMs
Revenue concentration on key customers (GE, Mitsubishi, Siemens) poses risk if any program is delayed.
🤫 Topics management stopped discussing
Mentioned in Q2 FY26, Q3 FY26
Long-term EBITDA margin target of 33-35% is sustainable, with current quarter at 38.6%.
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Guidance and risk preview
Management reiterated guidance of approximately 25%+ topline growth for the current financial year, driven by ramp-up of new facilities and qualifi...
Management acknowledged that commissioning and stabilizing new facilities involves significant upfront investment and time before revenue conversio...
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