ICICI Securities research report on Azad Engineering
Azad Engineering (Azad) has received an order from Baker Hughes for the supply of high-complex and critical components. We believe that this is significant as it: 1) enables Azad to diversify its sector mix; 2) potentially could translate into adjacent revenue streams; and 3) would likely keep earnings growth momentum. In our view, this is the second major order in Q4FY24 after Rolls-Royce for defence engines and signifies that the development efforts made over several years are now getting monetised.
Outlook
We also believe that there is a better possibility of our FY26E EPS of INR 20 being achieved; hence, we raise our P/E multiple to 80x (earlier 70x), valuing the company at INR 1,600 (earlier INR 1,400) on FY26E EPS. Retain ‘BUY’.
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