Azad Engineering (AZAD) Q1 24/25 earnings summary

Executive summary

• Achieved record quarterly revenue of Rs. 984.1 Mn (INR 98 crore) in Q1 FY25, up 29.6% year-over-year, with PAT more than doubling to Rs. 171.3 Mn (INR 17 crore), driven by reduced finance costs post-IPO and robust order wins across energy, defense, and aerospace sectors.

• Aerospace & Defence segment revenue more than tripled year-over-year, supported by new domestic orders and commercial production in Oil & Gas.

• Signed major multi-year contracts with Siemens Energy, GTRE/DRDO, Rolls-Royce, Baker Hughes, and GE Vernova, expanding presence in global supply chains.

• Strategic acquisitions, including Leo Primecomp and Azad VTC, expanded manufacturing capabilities and reduced reliance on external vendors.

• Unaudited standalone and consolidated financial results for the quarter ended June 30, 2024, were approved and reviewed without qualification by auditors.

Financial highlights

• Q1 FY25 revenue rose 29.6% to Rs. 984.1 Mn, with adjusted EBITDA at Rs. 339.2 Mn (34.5% margin) and PAT at Rs. 171.3 Mn (17.4% margin), both at all-time highs.

• Gross margin achieved 70% in Q1 FY25.

• Exports accounted for 90.5% of Q1 FY25 revenue.

• Historical CAGR (FY21-24): revenue 40.6%, adjusted EBITDA 46.8%, PAT 72.1%.

• Basic and diluted EPS for the quarter were Rs 2.90, up from Rs 1.49 year-over-year.

Outlook and guidance

• Reaffirmed guidance of 25%-30% revenue growth for FY25, with anticipated margin improvement and long-term EBITDA margin guidance at 33%-36%.

• Capacity expansion on track, with incremental revenue expected from FY26.

• IPO proceeds allocated for capex, debt repayment, and general corporate purposes, with unutilized funds remaining for future use.