ICICI Securities raises target price for newly listed defence multibagger, sees 50% upside
Azad Engineering, domestic brokerage firm ICICI Securities has hiked the target price of the multibagger stock to Rs 2,450 as the long term prospects for the company seem appealing.
The domestic brokerage firm believes that the company is at a vantage point for healthy earnings growth as they have execution visibility on the upcoming 95,000 m2 facility. Azad Engineering is targeting a market share of up to 10% in the long run (currently 1%) in light of significant TAM and expects the recent order for ATGG engine to be a significant step in the next leg of growth.
“Given the orders, long-term contracts/agreements and roadmap worth upwards of INR 30bn, provided by the existing customers, we believe that four years of revenue is already covered. Besides, management mentioned that it has visibility on the entire 95,000 m2 facility due to commencement of operations from FY27, post which there is another 75,000 m2 facility awaiting commencement. In our view, both facilities will feed rapid earnings growth until FY35E,” said analysts at ICICI Securities.
Since Jan’24, Azad has won overseas orders from GE Vernova and Siemens Energy in the energy segment which encompasses gas, thermal, nuclear and industrial domains. Further, the company has obtained an order from Baker Hughes and one of its subsidiaries in the O&G segment.
As a result of recent order wins, Azad’s current order book stands north of Rs 3,000 crore (Dec’23: RS 1,600–1,800 crore). Besides, the company has added new customers and domains such as combustor
