Azad Engineering (AZAD) Q2 24/25 earnings summary

Executive summary

• Revenue for Q2 FY25 reached INR 111 crores (Rs 1,114.1 Mn), up 35% year-over-year, with a robust order book and record quarterly and half-yearly performance driven by global demand and major new contracts with Mitsubishi, Honeywell, Siemens Energy, and Arabelle Solutions France.

• Adjusted EBITDA for Q2 FY25 was INR 41 crores (Rs 412.9 Mn, 37.1% margin), with PAT for Q2 at INR 21 crores (Rs 208.82 Mn), reflecting margin expansion and profitability growth.

• Major new orders include a five-year INR 700 crores contract with Mitsubishi Heavy Industries, a $16 million Honeywell order, a $30 million supply agreement with Arabelle Solutions France, and a USD 83 million contract with Siemens Energy.

• Strategic MoU signed with Baker Hughes to establish a manufacturing facility in Saudi Arabia, expanding international presence.

• IPO completed, raising Rs 2,227.49 Mn, with proceeds allocated to debt repayment, capex, and general corporate purposes.

Financial highlights

• Q2 FY25 revenue was INR 111 crores (Rs 1,114.1 Mn), up 34.5% year-over-year; H1 FY25 revenue reached Rs 2,099.44 Mn, up 32.2% year-over-year.

• Adjusted EBITDA for H1 FY25 increased 42.2% to Rs 752.1 Mn (35.8% margin); Q2 FY25 Adjusted EBITDA up 54.5% to Rs 412.9 Mn (37.1% margin).

• PAT for Q2 FY25 was INR 21 crores (Rs 208.82 Mn); H1 PAT was Rs 380.05 Mn, up from Rs 268.89 Mn year-over-year.

• Net debt as of September stood at INR 112 crores, with net debt to equity reduced to 1.22x in FY24 from 1.50x in FY23.

• Basic and diluted EPS for H1 FY25 stood at Rs 6.45, compared to Rs 5.43 in H1 FY24.

Outlook and guidance

• Guidance for FY25 remains at 25%-30% revenue growth, with expectations of margin improvement due to operating leverage and backward integration.

• Management expects continued growth momentum, leveraging a strong and diversified order book and upcoming capacity expansions.

• Capacity expansion is expected to drive incremental revenue from FY26 onward.