Azad  Engineering Limited: A Leader in Aerospace and Defense Manufacturing

An Introduction to Azad  Engineering Limited

Azad  Engineering Limited , a company incorporated in 1983, is a key player in the manufacturing of qualified product lines for global original equipment manufacturers (OEMs) in the aerospace and defense category, as well as the energy and oil and gas industries. With expertise in manufacturing highly engineered components, Azad  Engineering has established itself as a trusted supplier of mission-critical components in complex and demanding industries.

Key Customers and Market Presence

With a strong focus on quality and precision, Azad  Engineering serves prestigious customers such as General Electric, Honeywell International Incorporated, Mitsubishi, Eon Aerospace, and more. The company exports its products to major markets including the USA, China, Europe, the Middle East, and Japan, with exports contributing to nearly 80% of its total sales. Azad  Engineering’s domestic sales account for the remaining 20%.

Industry Overview

Azad  Engineering operates in two main industries: oil and gas, and aerospace and defense. The oil and gas industry, which grew at a compound annual growth rate (CAGR) of 4% from 2017 to 2022, is expected to experience a slight decline in growth, with a projected CAGR of 3.2% from 2022 to 2030. On the other hand, the aerospace and defense components industry is anticipated to grow at a CAGR of 9% by 2027.

Financial Performance

Azad  Engineering has shown consistent growth in its financial performance. Revenue from operations has been steadily increasing, from 1,227 million to 1,944 million to 2,256 million. The company has also witnessed a growth in gross profit, from 189 million to 2,215 million. However, there was a significant drop in profit before tax (PBT) from 401 million to 131 million due to a one-time accounting adjustment related to amortization.

Export Breakup and Revenue Segmentation

Exports play a vital role in Azad  Engineering’s business, constituting approximately 80% of its sales. In terms of revenue segmentation, the majority of the company’s sales are derived from the energy, oil and gas, and scrap sectors, accounting for around 92% of its total sales as of June 2023. Aerospace contributes 8-9% of the sales, while the remaining .15% is attributed to other industries.

Strengths and Weaknesses

Azad  Engineering benefits from entry barriers due to its expertise in high-precision manufacturing processes, which gives the company a competitive advantage. However, there are potential weaknesses in the form of a projected decline in the oil and gas industry’s growth, which could impact Azad  Engineering’s business. Additionally, the company faces competition from both listed and unlisted players. While some competitors offer end-to-end solutions across the value chain, Azad  Engineering specializes in two out of the four key processes.

Valuations and IPO Details

Post-IPO, Azad  Engineering’s price-to-earnings (PE) ratio is estimated to be 57.5. The weighted average valuation indicates a range between 14,339 and 15,157 at the lower and higher bands, respectively. In comparison, the industry’s PE stands at 77.4. The price-to-book (PB) ratio for Azad  Engineering is expected to be 11.8 at the lower end and 12.38 at the upper end, while the industry’s PB ratio is 38.0 to. Azad  Engineering’s initial public offering (IPO) will open for subscription on December 20th and close on December 22nd. The price band for the IPO is set at 499 to 524 rupees. As of now, the grey market premium (GMP) stands at 83.97%. In conclusion, Azad  Engineering Limited holds a prominent position in the aerospace and defense manufacturing industry, catering to the needs of global OEMs and the oil and gas sector. With a strong focus on quality, precision, and mission-critical components, Azad  Engineering continues to grow its market presence and financial performance. As the company prepares for its IPO, investors have an opportunity to be part of its exciting journey. Don’t miss out on this chance to invest in a leader in aerospace and defense manufacturing.

Disclaimer: The information is only for information purpose only. It is always recommended to consult with certified financial experts before making any investment decisions. Follow busymoneyfreak.com