Precision engineering firm Azad Engineering Ltd on Monday (October 12) said it has been awarded a two-year long-term rate contract by Bharat Heavy Electricals Ltd (BHEL) for the supply of critical stationary and rotating airfoils (blades) for heavy-duty gas turbines, with an estimated contract value of approximately ₹52.68 crore.
The company said it has been approved as a long-term source by BHEL, a public sector undertaking. The contract is scheduled to run until October 9, 2028. Azad Engineering said it had executed a similar rate contract in May 2018.
At the time of receiving the earlier contract, the company had assessed the order as not material from a business perspective and, therefore, had not disclosed it. Considering the combined value and duration of the arrangement, the contract is now being disclosed as material.
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The company said the approval marks a step in its growing role in India’s domestic power generation equipment ecosystem and supports BHEL’s indigenisation of critical gas turbine components. The contract has been awarded by a domestic entity and is a long-term rate contract.
Last month, Azad Engineering informed the exchanges on Monday that it inaugurated two exclusive lean manufacturing facilities for GE Vernova’s Gas Power business at its Centre of Excellence & Innovation Centre in Hyderabad, expanding its footprint to three dedicated facilities for GE Vernova.
The two facilities, each worth 7,600 square meters are dedicated to manufacturing highly engineered rotating and stationary airfoils and specialised machined parts, in order to meet GE Vernova’s global demand in the power generation and essential industries segment.
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Later, Goldman Sachs maintained its “buy” rating on Azad Engineering with a price target of ₹3,315 per share, indicating an upside potential of 22% from its previous closing price.
The brokerage said the facilities inaugurated by Azad Engineering for GE Vernova are particularly relevant as gas turbine expansion remains one of the company’s key medium-term growth drivers. It added that the company continues to move up the value chain from being a component supplier, while its sizeable order book provides multi-year revenue visibility.
Of the nine analysts who have coverage on the Azad Engineering stock, eight have a “buy” recommendation, and one has a “sell” rating.
Shares of Azad Engineering Ltd ended at ₹2,969.95, up by ₹59.20, or 2.03%, on the BSE.
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