Azad Engineering Q1 FY27 Results (NSE: AZAD)
Signal: Margin expansion
The read
The key inflection is operating margin: consolidated EBITDA margin expanded to 39.3% from 36.0% YoY and 38.0% in Q4FY26, while revenue growth decelerated to 25.9% from 39.8% in Q1FY26; PAT rose 20.3% to ₹357.45 million and remained clean despite ₹35.49 million of other income. The parent continues to carry the earnings, with standalone PAT of ₹361.60 million slightly above consolidated PAT.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹172.6 Cr | +25.9% | +6.8% |
| EBIT | ₹49.29 Cr | N/A | N/A |
| Net profit | ₹35.74 Cr | +20.3% | N/A |
| EPS | ₹5.53 | +21.3% | N/A |
| EBIT margin | 39.3% |
P&L walk
Consolidated revenue increased to ₹1,725.99 million (+25.9% YoY, +6.8% QoQ), EBITDA margin expanded to 39.3% (+330bps YoY), and PAT rose to ₹357.45 million (+20.3% YoY), with profit growth lagging EBITDA because depreciation and finance costs remained material.
Segments
The filing does not provide a segment results table; standalone PAT of ₹361.60 million was ₹4.15 million above consolidated PAT of ₹357.45 million, implying a small subsidiary drag on group earnings.
Key positives
- Consolidated EBITDA margin expanded 330bps YoY to 39.3% and 130bps QoQ, extending the recent margin improvement visible from 36.0% in Q1FY26 to 39.0% in Q3FY26 and 38.0% in Q4FY26.
- EBITDA increased to ₹679.11 million, with employee benefits expense rising only 7.4% YoY to ₹411.43 million against 25.9% revenue growth.
- Finance costs increased only 4.7% YoY to ₹103.23 million while revenue rose 25.9% YoY, supporting operating-to-profit conversion.
- The company delivered the first indigenous expendable turbojet engine to DRDO on July 22, 2026, strengthening its aerospace and defence credentials, although the current results filing does not quantify financial impact.
Key concerns
- Revenue growth decelerated to 25.9% YoY from 39.8% in Q1FY26 and 32.5% in Q3FY26, making sustained order conversion the central trajectory variable.
- PAT growth of 20.3% to ₹357.45 million lagged EBITDA growth of 37.6%, reflecting the effect of ₹186.23 million depreciation and ₹103.23 million finance costs.
- Standalone PAT of ₹361.60 million exceeded consolidated PAT of ₹357.45 million by ₹4.15 million, indicating a modest subsidiary drag on group earnings.
- The filing does not disclose order book, order inflow, capacity utilisation, volumes or cash flow, limiting visibility on whether revenue growth is volume-led and cash-backed.
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