Azad Engineering listed at a 37 per cent premium at ₹720 on the bourses on December 28, 2023 in opposition to the problem worth of ₹524. The inventory closed the day on the ₹677.50, a premium of 29 per cent to its IPO worth.
On the subject worth of ₹524, the IPO was priced at 58 occasions its annualised H1FY24 earnings and 366 occasions FY23 PAT. In FY23 its internet revenue was impacted by elevated finance prices. At at this time’s closing worth of ₹677.50 per share, the inventory is buying and selling at 75 occasions its annualised H1FY24 earnings (473 occasions its FY23 earnings). With this, its H1 annualised valuation is increased than its friends corresponding to Triveni Turbine and MTAR Applied sciences which commerce at a trailing P/E of round 65 occasions. Lengthy-term traders can wait and watch to evaluate sustainable income development price, stability in profitability, and the power to scale up earlier than contemplating an funding within the inventory.
Enterprise
Azad Engineering is engaged within the manufacturing of extremely engineered precision-forged and machined parts which are mission and life-critical. The corporate primarily operates in vitality (87 per cent of working income), aerospace and defence (9 per cent), and different segments together with oil and fuel and scrap (4 per cent).
Throughout the vitality area, the corporate manufactures airfoils/blades, particular machined elements, and combustion element assemblies for land-based generators with purposes in industrial and vitality crops utilizing totally different gasoline sorts corresponding to nuclear, hydrogen, pure fuel, and thermal. Aerospace and defence merchandise embody airfoils/ blades and parts for engines, auxiliary energy models, hydraulics, flight controls, gasoline, and inerting sections of economic and defence aircrafts and spacecrafts, amongst different defence programs.
Financials
The corporate has been in a position to develop its working income by 43 per cent CAGR throughout FY21-23 to round ₹252 crore whereas it reported income of round ₹159 crore throughout H1FY24. It has been in a position to develop its EBITDA at CAGR in step with income development, thereby sustaining its margin at round 30 per cent over the last three fiscals.
Nevertheless, internet revenue has been fairly unstable, primarily as a consequence of finance prices. Internet revenue lowered from round ₹11 crore in FY21 to ₹8.5 crore in FY23 whereas it grew to ₹28.8 crore in H1FY24. Finance price for the corporate elevated from round ₹5.3 crore in FY21 to ₹52.4 crore in FY23 primarily as a consequence of curiosity on compulsorily convertible debentures (CCDs) and optionally convertible debentures (OCDs) and premium on redemption of sure OCDs. It remained at round ₹21.8 crore in H1FY24.
#Azad #Engineering #closes #cent #premium