Azad Engineering (AZAD) Q1 25/26 earnings summary

Executive summary

• Achieved record quarterly financial performance in Q1FY26, with standalone revenue of ₹1,345.1 million (INR 135 crores), up 36.7% year-over-year, and strong profitability driven by growth in Energy & Oil & Gas (+41.7% YoY) and Aerospace & Defence (+26.3% YoY) segments.

• Focused on ramping up new facilities, including two lean factories inaugurated, and planning for eight dedicated facilities, supporting an order book exceeding ₹60 billion (INR 6,000 crores).

• Export revenue remains dominant at 92% for Q1FY26, with sales in 12 countries and long-term relationships with major OEMs.

• Subsidiaries acquired last year have turned EBITDA neutral and are expected to contribute to profitability from FY2026.

• Standalone and consolidated unaudited financial results for Q1 FY2025-26 were reviewed and approved by the Board on August 4, 2025.

Financial highlights

• Standalone revenue from operations for Q1FY26 was ₹1,345.1 million, up 36.7% year-over-year and 8% sequentially.

• EBITDA for Q1FY26 was ₹485.1 million (36.1% margin), up 46.8% year-over-year; PAT was ₹299.9 million (22.3% margin), up 75.1% year-over-year.

• Gross margin improved by 3.4% year-over-year, with consumption expenses as % of sales decreasing to 12.1% due to product mix.

• Other income increased due to treasury income from unutilized QIP funds.

• Basic and diluted EPS (standalone) for Q1FY26 were ₹4.64 and ₹4.54, respectively.

Outlook and guidance

• Reiterated top-line growth guidance of 25%-30% for FY2026, with internal targets suggesting potential for higher growth once new facilities stabilize.

• CapEx deployment of ₹4,500 million planned for FY2026, mainly for infrastructure, plant, and machinery.

• Asset turn expected at 1.8x, supporting incremental revenue of ₹5,500 million from new capacity.

• All business segments expected to deliver record performance in FY2026.

• Strategic focus on wallet share gains, product diversification, technology-led optimization, and geographic expansion, including Saudi Arabia.