Azad Engineering Ltd

- Azad Engineering raised INR700 crores through QIP (Qualified Institutional Placement) recently. - The company utilized incremental term funding of INR154 crores during FY '26 to support capacity expansions. - Total borrowing stood at INR457 crores (gross) and INR272 crores (net) as of FY '26. - Treasury balance includes INR184 crores, with INR160 crores coming from QIP proceeds. - Going forward, no specific mention of additional fundraising through debt or equity beyond deploying the QIP proceeds and some planned capex (~INR180 crores remaining deployment). - The focus appears to be on utilizing existing funds (QIP and debt) for capacity ramp-up and working capital normalization.

- FY '26 capex: INR 392 crores capitalized assets; incremental term funding of INR 154 crores utilized. - FY '27 planned capex: Around INR 180 crores to be deployed, mainly linked to QIP proceeds raised (INR 700 crores). - Focus this year: Complete commissioning of current and balance plants (total 8 dedicated lean manufacturing facilities; 4 completed, 4 to be completed in FY '27). - Third expansion plan: 85,000 square meter plant civil work to start after current plants are fully ramped up. - Strategic investment: Inaugurated dedicated facility for Baker Hughes in Saudi Arabia; capex plans on track but timelines shifted due to geopolitical events. - Long-term: Capacity to be increased based on customer order schedules to support growth; ongoing efforts to bring special processes like heat treatment fully in-house. - Large investments to support capacity building, operational readiness, and long-term earnings growth.

- Azad Engineering expects a 25%+ annual revenue growth over the next several years, supported by a robust order book of around INR 6,500 crores with delivery schedules over 5-6 years. - The company is ramping up 8 dedicated OEM plants, with 4 already commissioned and 4 more to be completed in FY '27, which will drive volume growth. - Increased capacity and stabilization of new plants will convert elevated inventory investment into revenues, improving asset turns and cash flow from FY '27 onwards. - Growth levers include ramp-up of qualified parts, addition of adjacent product categories, and onboarding new customers leveraging horizontally developed capabilities. - Vertical diversification is underway, with Energy expected to contribute 55-60% of revenues, and significant ramp-up planned in Oil & Gas and Aerospace & Defence segments. - Demand outlook is strong due to global OEM order backlogs and India's emerging engine ecosystem, positioning Azad for sustained multi-year growth.

- Azad Engineering expects a sustained top-line growth of 25%+ annually over multiple years, driven by ramp-up of newly commissioned plants and expanding customer wallet share. - Margins are robust, with EBITDA margins around 33%-35%+, and management anticipates potential margin expansion as new plants reach optimal utilization and continuous improvements are implemented. - Profit after tax grew strongly by ~54.4% in FY '26, demonstrating operational leverage despite ongoing capacity build-up. - Operating cash flow and asset turns are expected to improve in FY '27 and beyond as utilization of capitalized assets rises. - The order book (~INR 6,500 crores) offers revenue visibility extending 5-6 years, supporting stable earnings growth. - The company’s diversified industry focus (Energy, Aerospace & Defence, Oil & Gas) and ongoing capacity expansions underpin medium- to long-term profit and EPS growth potential.

- Azad Engineering's rolling order book stands at approximately INR 6,500 crores net of deliveries in FY '26 (Page 17). - The order book is described as INR 6,500 crores plus, reflecting some contracts with undisclosed values (Page 17). - Contracts typically have delivery schedules extending over 5 to 6 years (Page 17). - The order book represents about 11x to 12x of FY '26 revenue, providing strong forward visibility (Page 6). - Around INR 600 crores of the order book were delivered in FY '26 (Page 6). - Orders are diversified across multiple segments with notable contracts from GE, Siemens, Mitsubishi, Baker Hughes (Page 6-17). - Revenue conversion from the order book depends on production schedules, capacity ramp-up, and part qualifications (Page 6). - Growth guidance expects to consume the current order book over the next 5 years with 25%+ revenue growth trajectory (Page 17).