Azad Engineering , a manufacturer of high-precision and OEM components, has reported a robust financial performance for the first quarter of fiscal year 2026, with significant growth in both revenue and profitability.

Strong Financial Performance

The company's standalone profit for the quarter ended June 30, 2025, soared to ₹299.94 crore, marking a substantial 75% increase from ₹171.30 crore in the same quarter of the previous year. This impressive growth in profitability was accompanied by a 36.7% year-on-year rise in revenue from operations, which reached ₹1,345.12 crore compared to ₹984.09 crore in Q1 FY25.

Improved Margins and Operational Efficiency

Azad Engineering's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for Q1 FY26 stood at ₹485.10 crore, representing a significant 46.8% increase from the previous year. The EBITDA margin improved to 36.1%, up from 33.6% in Q1 FY25, indicating enhanced operational efficiency and cost management.

Segment-wise Performance

The company's growth was primarily driven by strong performances in its key business segments:

1. Energy and Oil & Gas: This segment witnessed a robust 41.7% year-on-year growth, contributing significantly to the overall revenue increase.
2. Aerospace & Defence: Revenue from this segment grew by 26.3% compared to the same quarter last year.

Export-driven Growth

Azad Engineering continues to maintain a strong export focus, with overseas sales accounting for 92% of the total revenue in Q1 FY26, up from 90.5% in the corresponding quarter of the previous year.

Management Commentary

Rakesh Chopdar, Chairman and CEO of Azad Engineering, commented on the results: "We are encouraged by the strong momentum in our business during Q1FY26, as we delivered our highest-ever quarterly performance in both revenue and profitability terms. The strong sales performance reflects the continued trust our customers place in our execution capabilities across key verticals."

Future Outlook

Looking ahead, Mr. Chopdar added, "FY26 will be a year of consolidation and stabilization, as we focus on systematically ramping up our new facilities to effectively serve our expansive orderbook exceeding ₹60 billion. With strong execution, growing demand across sectors, and a healthy pipeline, the company is well-positioned to sustain its high-growth trajectory and reinforce its leadership position in the manufacturing sector."

Expansion and Utilization of Funds

The company recently raised funds through a Qualified Institutions Placement (QIP) and has been strategically utilizing these resources. As of June 30, 2025, Azad Engineering has utilized ₹2,028.29 crore of the ₹7,000 crore raised, with the majority allocated towards capital expenditure and general corporate purposes.

Azad Engineering's strong Q1 FY26 results underscore its growing prominence in the high-precision manufacturing sector, with a clear focus on export markets and key industries such as energy, oil & gas, and aerospace & defence. The company's robust order book and ongoing expansion efforts suggest a positive outlook for the coming quarters.

Azad Engineering Limited (AEL) has received a significant boost in its credit ratings, as announced by CARE Ratings, a prominent credit rating agency. This upgrade reflects positively on the company's financial stability and creditworthiness.

Credit Rating Upgrade Details

The credit rating upgrade encompasses two key areas of Azad Engineering's financial facilities:

Long-term Bank Facilities

Long-term/Short-term Bank Facilities

Implications of the Upgrade

The upgrade from 'CARE A-' to 'CARE A' for the long-term bank facilities signifies an improvement in Azad Engineering's credit profile. This new rating indicates a strong degree of safety regarding timely servicing of financial obligations and carries a lower credit risk.

The assignment of 'CARE A; Stable / CARE A2+' for the long-term/short-term bank facilities further underscores the company's strong position. The 'CARE A2+' rating for short-term facilities suggests a strong capacity for timely payment of short-term debt obligations and carries a lower credit risk.

Company's Disclosure

In compliance with regulatory requirements, Azad Engineering Limited has formally disclosed this credit rating upgrade to the stock exchanges. The company secretary and compliance officer, Ful Kumar Gautam, confirmed the rating changes in an official communication to both the BSE Limited and the National Stock Exchange of India Ltd.

This credit rating upgrade may potentially enhance Azad Engineering's financial flexibility and could lead to more favorable terms in future financial arrangements. It serves as a positive indicator for investors and stakeholders, reflecting the company's improved financial health and operational performance.

Investors and market participants are advised to consider this information in their assessment of Azad Engineering Limited's financial position and future prospects.