Azad Engineering, a notable player in the engineering and manufacturing sector, has made headlines today as its stock surged by 5% to hit the upper circuit on the NSE. This significant movement comes on the heels of the company securing a prestigious 5-year international contract with Siemens Energy Global GmbH & Co. KG, Germany. The contract involves the manufacturing and supply of critical rotating components for Siemens Energy's advanced gas and thermal turbine engines, underscoring Azad Engineering's capabilities and reputation in the global market.

Market Performance:

The Azad Engineering share price opened at ₹1,781.90, reflecting a 5% increase from the previous close of ₹1,697.05. This rise is part of a broader trend of exceptional performance since the company's initial public offering (IPO) at the end of December 2023. The stock has delivered over 159% returns since its IPO, making it a multibagger for investors. The IPO price was set at ₹594, and the share price has more than tripled since then, demonstrating the market's confidence in the company's growth potential.

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Contract Details:

In a release to the exchanges on Thursday after market hours, Azad Engineering announced the five-year contract awarded by Siemens Energy. This contract not only solidifies Azad Engineering's position as a key player in the manufacturing of advanced turbine components but also expands its international footprint. Earlier in May 2024, the company had secured another significant contract from the Gas Turbine Research Establishment (GTRE) under DRDO for the manufacturing, assembly, and integration of advanced turbo gas generator engines. This contract, termed a "nation pride" project, further highlights the company's strategic importance and technical prowess.

Financial Performance:

Azad Engineering's financial performance has been robust, with revenues for FY24 reaching ₹341 crore, a 35% year-on-year increase. Earnings before interest, tax, depreciation, and amortization (EBITDA) rose by 48% to ₹117.5 crore, while net profit surged by 589% to ₹58.6 crore compared to FY23. These impressive financials underscore the company's effective business strategy and operational efficiency.

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Future Outlook:

In its Q4 and FY2024 results presentation, Azad Engineering emphasized its commitment to broadening its revenue base, particularly in the Aerospace & Defence and Oil & Gas sectors. The company aims to achieve sustainable growth of 25-30% in revenue over the long term. The recent contracts and financial performance indicate that Azad Engineering is well-positioned to continue its growth trajectory and expand its market presence.

Conclusion:

The surge in Azad Engineering's share price and its successful securing of significant contracts highlight the company's strong market position and growth potential. Investors and market analysts will be keenly watching the company's next moves as it continues to leverage its capabilities in the global market. With a solid financial foundation and a clear strategic vision, Azad Engineering is poised for continued success in the engineering and manufacturing sectors.

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