GS on Azad Eng ; Buy, TP Rs 3125

Revenue increased 31% YoY & 11% QoQ to INR 1.91bn, 2% above estimate Sequential improvement reflects continued revenue momentum amid ongoing capacity ramp-up. EBITDA increased 38% YoY & 12% QoQ to INR 723mn, 4% above estimate EBITDA margin expanded 177bps YoY and 56bps QoQ to 37.9%, 42bps above estimate. Gross margin improved 738bps YoY and 120bps QoQ to 95.6%, 409bps above estimate, supported by a favorable movement in inventory-related costs. Per management, revenue is likely to hit an annual rate of INR 13bn by FY28E, more than 2x the FY26 level.

AZAD ENGINEERING LIMITED

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