Azad Engineering Shares Surge After Partnership Agreement with Baker Hughes

Shares of Azad Engineering, a key supplier of high-tech parts for the aerospace and energy sectors, climbed about 2% on November 11. The bump came after news broke about a potential partnership with Baker Hughes to build a precision manufacturing facility in Saudi Arabia.

Azad Engineering and Baker Hughes signed a Memorandum of Understanding (MoU) for the collaboration. The signing took place at the local content forum in Riyadh, witnessed by Prince Abdulaziz bin Salman Al Saud, Saudi Arabia’s Energy Minister, and other high-ranking officials.

According to an official statement, the MoU outlines Azad’s plans to set up a facility in Saudi Arabia focused on manufacturing precision parts, sub-assemblies, and assemblies to meet local demand. This follows a major deal from August 2024, where Azad entered a five-year contract with a Baker Hughes subsidiary to supply critical components for oil and gas—a deal that also allows for extensions.

Azad’s share price has been on a tear this year, rising 146%. In its June earnings report, the company reaffirmed its goal of 25-30% revenue growth for FY25, fueled by a robust order book worth ₹3,300 crore, which includes two orders from Baker Hughes.

Currently, Azad supplies parts to six major aerospace and defense companies and is diversifying its business to tap into new markets. According to an EY report, the global market for energy turbines could reach ₹28,300 crore by 2027, a promising outlook for Azad, which generates most of its revenue from three large international clients.

Recently, Azad signed a Long-Term Contract & Price Agreement (LTCPA) with Mitsubishi Heavy Industries (MHI) in Japan. This deal, worth ₹700 crore (around $82.9 million), strengthens Azad’s partnership with MHI and covers advanced turbine engine components.

In addition, Azad secured a $16 million contract with Honeywell Aerospace ISC in the U.S. to produce specialized aviation parts. The company also has a five-year deal with Siemens Energy Global, signed in July, to supply key turbine components.

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ICICI Securities has recently increased its price target for Azad to ₹2,450 per share, citing the company’s cost efficiency and increased allocation from clients as key drivers. The brokerage expects strong earnings growth for Azad, thanks to a large addressable market (TAM).

Azad Engineering has made a name for itself with precision engineering solutions in aerospace, defense, power generation, and oil & gas. The stock is gaining traction on Dalal Street, with global brokerage Investec recently initiating coverage with a ‘buy’ rating and a target price of ₹1,850.

Investec highlighted that Azad is the only Indian firm supplying 3D airfoils to major global OEMs—a niche market with high entry barriers. The firm expects Azad’s profit after tax to grow at a 40% CAGR from FY2024 to FY2027, driven by recent contract wins, expansion, and lower financing costs.