Thank you. Thank you very much.

Good morning, everyone. Welcome and thank you for joining us on the Q4 FY '26 earnings call.

I'm joined today by Mr. Vishnu Malpani, our Whole-Time Director; Mr.

Ronak Jajoo, our CFO; and SGA, our Investor Relations Advisors. The audited results and the investor presentation have been uploaded on the stock exchanges and to our company website, and I trust you have had a chance to look at them.

At the start of FY '26, we described it as a year of consolidation, a year in which we would embed newly commissioned capacity, convert the qualifications we have been earning over multiple years, and put in place the human capital and the systems that the next phase of growth demands. I'm pleased to report that we have delivered on each of those commitments.

Before turning to the numbers, I want to spend a moment on what the growth we are seeing actually represents because it is important to characterize this correctly. The nature of our business and our growth: Azad is a global supplier.

We compete head-on with established suppliers from USA, Europe, China, and Japan, and on their own benchmarks for the same global OEM platforms. We have done so far for many years now, and our growth today is the cumulative payoff of that long, hard work, not a function of any short-term tailwind, geographic shift, or single market opportunity.

The products we manufacture—critical rotating components for gas, steam, and nuclear turbines; mission- and life-critical aerospace and defense parts; complex precision assemblies for oil and gas—are among the most demanding components made anywhere in the world. They sit inside engines that operate at extreme temperatures, extreme pressures, extreme tolerances.

The cost of failure is measured in lives and in billions of dollars platforms. The reason these components are made by only a handful of companies globally is straightforward: the qualification cycle to even be allowed to manufacture them take years, sometimes a decade, of process validation, metallurgical proof, dimensional verification, first-article inspections, and serial production audits.

Once a supplier earns that qualification, the business is sticky, multiyear, and high-value. The growth you are now seeing in our reported numbers is the conversion of qualifications we earned over the last several years against the backdrop of capacity we have deliberately built to be ready for the next conversion.

Talking on the capacity and customer milestones: as promised on our capex roadmap, we have successfully inaugurated fourth dedicated lean manufacturing facilities for our marquee global customers since listing, of which two were commissioned during FY '26 and the most recent one just last month. In April 2026, we inaugurated a dedicated facility for Baker Hughes, a milestone in a relationship that, like all our relationships, we earned through one of the most rigorous qualification pathways in the industry.

A dedicated facility represents the deepest possible form of customer integration, and we now operate several such facilities for several global OEMs. Mitsubishi Heavy Industries, a defining proof point: we are also pleased to share another significant milestone.

Azad has been awarded a prestigious contract by Mitsubishi Heavy Industries, Japan as a single-source supplier partner, and we have signed an 8-year-long contract and purchase agreement for the supply of highly engineered hot section nozzle vane segments for the combustion of a gas turbine engine. Single-source qualification for hot section components of a turbine nozzle vane for an OEM of MHI's stature is the strongest possible endorsement of our technical and process capabilities.

This product is not just being awarded, and it is awarded by many, many audits and many, many qualifications prior to even they think of awarding such product to any company. On the financial performance snapshot: Q4 FY '26 was another strong quarter.

Revenue stood at ₹157 crore, a year-on-year growth of 26.4%. Reported EBITDA margin improved from 36.5% in Q4 FY '25 to 36.7% in Q4 FY '26, driven by operational efficiencies, scale benefits, and improving product mix.

PAT margins expanded from 20.9% to 22.3% over the same period. For the full year, FY '26 revenue was ₹590 crore against ₹453 crore in FY '25, a growth of approximately 30% plus.

Reported EBITDA margins stood at 36.9% for the year and the PAT margin at 22.4%. The consistency of growth across both revenue and profitability reflects strong execution across every business segment and an increasing contribution from advanced manufacturing programs.

Building the organization for the next phase: this is very important. Equally important to the financial performance is the work we have done on building the organization itself.

This is the work that does not show up in a quarter's print, but it is in the work that determines what the company looks like five years from now. Infrastructure build-out: a meaningful portion of management bandwidth in FY '26 went into building physical infrastructure—new facilities, specialized equipment, audits, validation cycles, qualification, delta qualification for programs.

That infrastructure phase is now approximately 70% to 80% complete. With the heaviest part of the build-out behind us, the operating focus from here is conversion, throughput, and the operating leverage that comes from running a fuller, more integrated manufacturing system.

More importantly, the organizational restructuring: we are deliberately restructuring the organization to match the scale we're growing into. We are bringing in senior professionals from the industry, leaders with deep functional and sector experience, and selectively replacing certain functional roles internally where the role has outgrown what its currently incumbent was originally hired to do.

This is a planned exercise executed with care, and it is essential. The Azad of future need a different organization architecture from Azad of today, and we are building for the company today.

Systems and process: equally, we are upgrading our systems—our planning, our ERP, shop floor execution platform, our quality management system, and our governance frameworks. Scaling a complex precision engineering business requires us to grow across every lever: people, process, plant, partners, and systems.

Growing one without the other is how companies stumble at this stage of the journey. We are determined not to.

Overall outlook: looking ahead, the demand backdrop of the product we make remains strong. Global OEMs across aerospace, defense, energy, and oil and gas are scaling their platforms, and the supplier base capable of meeting the technical threshold we operate at remains small.

We are confident in sustaining strong business momentum and in delivering on our previously communicated top-line growth of approximately 25% plus for the current year. In line with growth outlook, we will continue to invest in capabilities, in capacity, in people, in systems, and in deepening our customer partnership.

The story of Azad has always been one of the patient, technical qualification-led growth. We intend to continue writing this story the same way.

With that, I now hand over the call to our Vishnu Malpani, our Whole-Time Director. Thank you.

Thank you, Mr. Chopdar, and good morning to everyone on the call.

The chairman has spoke about where the tops stand strategically. Let me take you closer to how FY '20 FY '26 was actually executed on the ground: ramp-up of the new plants and how each segment performed, the operational discipline that turns an order book into revenue, and also what are our few focus areas for FY '27.

FY '26 was a year of calibrated execution for Azad Engineering. By every internal measure, it was one of our most productive years.

We delivered our highest-ever revenue, highest-ever EBITDA, and highest-ever PAT, and we did it while commissioning two plants in this financial year, qualifying parts, and adding people at record pace. With this, we now have four additional plants that we built in the newer facilities.

We've always called FY '26 a year of calibrated ramp-up and not a rushed one, and the difference is really important to understand. Calibrated means we lined up everything right from plant commissioning to customer qualification timelines, lined up hiring with our training, and lined up raw material flow with our realities of working capital and WIP cycle.

Every quarter of FY '26 was planned in detail, and we've been able to deliver close to our plan in every quarter. In terms of segmental performance, we've been broad-based by design.

Our growth of FY '26 was not dependent on any single customer or any geography or any single segment. We've had tremendous growth every segment.

Energy and oil and gas remained the largest contributor for the full year '26 and continues to be one of the main engines of the business, contributing to roughly 81.5% for the full year in terms of our revenue, which is ₹481 crore, year-on-year growing at at least 34%. In quarter four specifically, the segment generated ₹128 crore in revenue, again contributing roughly about 81% of our quarterly revenues.

The headline number hides the diversity inside. We've grown across multiple customers, subsegments within each vertical.

Coming to aerospace and defense, we've delivered another strong year and a milestone number of ₹100 crore that we were able to reach for the first time. For the full year 2026, this segment contributed ₹102 crore, about 17.2% of our FY '26 revenue, with a year-on-year growth of roughly 25%.

In quarter four alone, the segment contributed ₹28 crore. On the aerospace side, our share of qualified component categories with our key customers have grown materially through the entire year.

Talking about our order book: our order book is at approximately ₹6,500 crore, with ₹600 crore delivered in FY '26, and still remains at that level, which is about 11, 12 times our FY '26 revenue, given the forward visibility, which is very, very rare in the times today. The conversion in our order book is broadly driven by three things.

This is a question that we were asked the previous time, that the conversion of an order book into revenue is driven by the production schedule already agreed with each of our customers, our capacity availability and ramp-up against that schedule, and the qualification status of each and every part that is a part of our contract that we're signing with our customers. As we exit FY '26, I'm very happy to share that all of these three are aligned for the first time at the scale.

Capacity is largely in place, qualifications are advancing across sectors and customers, customer schedules are firm and are in place, and that's why we remain confident in delivering 25% plus top-line trajectory not just for FY '27, but on a multiyear basis. Our focus for FY '27 sits on three to four priorities at large: first, ramping up our four new capitalized plants across GE, Siemens, Mitsubishi, and Baker Hughes that we inaugurated over the last few quarters to their committed throughput; second, commissioning the remaining plants that are still under construction or are in WIP stages by the balance of the year, FY '27, with the same discipline that we followed through FY '26; third, deepening our existing customer relationships; fourth, normalizing the working capital cycle over this period.

With that, I now hand over our call to our CFO, Mr. Ronak Jajoo.

Thank you.

Thank you, Vishnu, and good morning, everyone. I will take you through the financials and operational highlights for the quarter and the full year of FY '26.

FY '26 has been an important investment and transition years for the company. During the year, multiple OEM dedicated facility progressed simultaneously through commissioning, qualification, and stabilization stage.

While this resulted in elevated upfront investment in plant and machinery, inventory, manpower readiness, and work-in-progress, it has laid a strong foundation for our next phase of sustainable growth. We now have fully prepared facilities, a robust order book, and a strengthened organizational structure to support future scale.

Let me take you through the numbers now. For FY '26, the company reported revenue from operations is ₹590 crore on standalone basis and ₹603 crore on consolidated basis.

This reflects a healthy year-on-year growth of over 32%, despite several facilities being in ramp-up stage, qualification stage, and significant part of the year. The other income stood at ₹46 crore, largely compromises comprising of foreign exchange gain and treasury income.

This is expected to moderate going forward as QIP proceeds are deployed toward the growth capex. Our EBITDA margins are around 37.4%, reflecting strong execution discipline, supply chain efficiencies, and margin benefit driven by backward integration, which reduce our outsourcing cost.

Depreciation and finance costs increased due to front-ended capex undertaken during FY '26. During the year, we have capitalized assets worth ₹392 crore and record an increase CWIP and capital advance of ₹191 crore during the year.

Profit after tax stood at ₹132 crore on standalone basis and ₹134 crore on consolidated basis, delivering strong growth of 54.5% for the year. The balance sheet side, we continue to invest ahead of the curve.

During FY '26, we have capitalized assets worth ₹392 crore, as I mentioned. The company utilized increase utilized incremental term funding of ₹154 crore to support ongoing capex capacity expansion, and total borrowing stood at ₹457 crore on gross basis and ₹272 crore on net basis.

Our treasury balance stood at ₹184 crore, including ₹160 crore from QIP proceeds. Receivables stood at ₹309 crore, largely in line with historical level.

Trade payables were ₹87 crore, translating to approximately 51 days of sales, which was in line with historical number. We have not fully utilized receivable bill discounting facility this year, given the current cost dynamics and our adequate liquidity available in the system, as I mentioned that we have a treasury of ₹184 crore.

Additionally, we have GST credit of approximately ₹100 crore accumulated over the past two years. This is on the back of capital expenditures which we have done in the in historically, which we expect it to realize by H1 FY '28, supporting future cash flow and increase the liquidity in the system.

Let me take you through the inventory. Inventory during FY '27 reflects a deliberate and strategic build-up to support the ramp-up of our newly commissioned OEM facilities and ensure readiness of committed production schedules, as mentioned by Mr.

Vishnu and Mr. Rakesh Chopdar in their presentation.

The build-up is aligned with capacity expansion, customer stocking requirements, and upcoming order execution. It's important to note nearly 96% of our inventory is less than one year old, indicating that it is primarily linked to recent investment, plant ramp-up, qualification requirements, and customer-driven stocking needs rather than the legacy inventory.

As utilization improve across the new facility, we expect these investments to translate into stronger revenue absorption, improved asset turn, better return ratio, and strong operating cash flow in FY '27 and beyond. In closing remark, FY '26 was just a year just not a year of growth, sorry, but year of purposeful investment to build capacity, enhance capabilities, and position the company for long-term mass expansion.

With the strong order pipeline, operational readiness across dedicated OEM facilities, and disciplined financial management, we are confident of converting this investment phase into the earning growth and improve returns in coming years. Thank you.

I would now like to open the floor for questions.

Hi. Good morning, everyone, and congratulations for a good set of numbers again.

A few questions, if I may. The first one is essentially if I look at the projections or the commentary of global OEMs, including GE, Mitsubishi, Siemens, and that seems to be very, very bombastic.

They are fully booked for next 10 years. In this scenario, how do you see the landscape changing for Azad?

The growth that we have projected, 25% in revenue, appears to be actually a little bit on conservative side given the overall macro tailwinds that we are seeing. We have got, of course, relationship with all the global OEMs.

Just wanted your thoughts on that.

Yeah. Hi, Amit.

Thanks for the question. Yes, you are right.

There is massive pressure from our existing customers. What we say 25% plus is a growth number.

As during last call and this call and a couple of calls, we have been mentioning that we are moving to the new facility and it's not a small facility which is in the making. We could successfully come to a level of stabilization that is 70%, 80% done.

We can't see that massive jump immediately, right? Because we need capacity, we need infra, we need these audits, qualifications, redo delta qualifications.

These things will definitely eat up a lot of time. This is bound to happen with any organization, right?

You must be knowing all the stringent processes these OEMs carry, for that stringent products what we manufacture. You're right.

Definitely, there will be a jump coming in. Maybe in coming quarters, I would definitely elaborate on the numbers of the growth we are seeing.

As we get stabilized 100%, my take is I would only give a growth number what we are saying is conservative, you're right. This statement is going to change maybe just because in the coming quarter also, we see that the 70%, 80% is what we see the stabilization part done.

Now the spindles are running, the material is being churning out, but the effect will not come overnight, right? This takes at least this quarter you will definitely see some movement of the revenue is going up.

It's always nice to give a guidance and maybe in the next coming quarter, I can change my statement. Definitely, we can see after the stabilization is done, definitely we see a massive growth.

No, great. Got it.

The second one is essentially on ETA engine. Just wanted to understand the roadmap of delivery.

If I'm not mistaken, there are 18 to 20 engines that you have to deliver in maybe one and a half years. Just wanted to understand where we are on that development process.

Amit, I would just give you an idea. It was years, years got to months, now it has come to weeks.

We are not far away. Even we are super excited, specially me, myself, I'm super excited to deliver this to the government, much needed for the country at this hour.

It's not far away.

Cool. One data bookkeeping question, if I may.

Is it possible to break receivable and inventory days into segments of this year?

Yes. As we gave a statement in last call also, '26 was something and we were consolidating a lot of things.

Stabilization was most important. Lot of bandwidth of the entire management went up in trying to make this facilities up and running.

That's most important, priority one. Then coming to the level where we have already WIP, working progress, to cut down these inventories, as I promised, in H1, H1 you will see a drastic change, coming closer to 200 days.

H2, we get down to 160, 170 days. That's we have already planned and it's in execution, and we will achieve it.

Okay. Great.

Thank you so much and all the best.

Yeah.

Hello, sir. Thanks very much for this opportunity.

Sir, I have two questions. One is in Q1 FY '26, you had mentioned a plan of creating total eight dedicated facilities over 12 to 18 months, of which four have been completed.

Are we on track to set up four more new facilities over six months?

Yes, you're right. We are on track.

Sir. The second question is as and when you win some long-term contracts, you mentioned some contracts are 5 years, some are 6, some are 4, right?

Of the existing order backlog of around ₹6,000 crore, what will be the timeline over which you will need to deliver this? Look.

These contracts have specific delivery schedules. Every contract has their schedule at a part number level agreed with the customer, and then the capacity that we are bringing online.

Just coming to the same thing that we were talking about, in the last about 18 months, we've gotten about four plants up. Right now, on the basis of the ramp-up plan and the customer delivery schedules, the capacity is coming online for these four plants.

If you look at it over 5 to 6 years, on an average, these contracts extend over 5 to 6 years.

Got it, yeah. One last...

If you just look at the guidance that we're talking about, 25% plus on the number, you will realize that over the next 5 years, we should be able to more or less consume ₹6,000-₹500 crore.

Right. Understood, sir.

Sir, is it possible to get a split of this ₹6,000 crore order backlog by segment?

Sure. Let me tell you broadly between our segments.

Customers will be difficult for us to communicate.

Today, we have over $400 million worth of orders towards energy, approximately $200 million plus for aerospace and defense, and about $100 million plus in oil and gas.

Got it, sir. This is very helpful.

Thank you very much.

Welcome.

Hi. Thanks for the opportunity.

My first question is on this new contract that you have got from Mitsubishi for the nose and vanes for the hot section. Just want to understand a couple of things.

When you said it's a single-source order, does it mean that these were originally manufactured by Mitsubishi, which is now being outsourced to you subject to qualifications, or you have won it from some other vendor? Second, how big is this opportunity, especially on the hot section for the nozzles and well vanes?

Third question is more on the aerospace, which is for the Pratt & Whitney and Rolls-Royce order. Where are we in the qualification cycle?

Gaurav. The first question, just remind me if I'm right, the first question you asked was this parts manufactured by Mitsubishi or some other vendor.

It was manufactured in-house. These parts are very critical in nature, right?

This is the combustion area. A lot of controls and checks are required to produce this part.

It's not just someone has an infra or some kind of equipment, these parts just go like that. It needs a lot of specialized infra and specialized talent to handle these kind of components.

Either they keep it in-house or they give it to the most trusted partner. They can't have multiple partners in this.

It's decided Mitsubishi says, "Hey, you have to focus completely on this, and we only dedicate this to you, and same thing we expect from you." This is the conversation because of the nature of the product.

This is mandatory it happens that way only. Once it's developed in there.

Second, if you're talking about market, it's a very lengthy explanation. What I can tell you is you can go to the competition.

Now we are going to be head-on is you can study with Howmet Aerospace or PCC. These are the companies who are the players who are in this segment.

We have stepped ourselves in this door, right? That will give you more this thing.

If you can have more details because it's a very lengthy conversation...

Yeah. ...so

we can come back. You can contact us after the call or something, I can explain you more in detail.

All right. Okay.

On the Pratt & Whitney and the Rolls-Royce

order? Yeah.

Gaurav, yeah. In this four engine manufacturers on airfoils what we started, the first one was Rolls-Royce.

In H2, we are expecting to supply the first qualification batch. Once that is approved, and I think we can see some momentum coming from Q4 of FY '27 or early of FY '28.

That's where the supply starts.

All right.

Followed by, and you can see, took 2, 2.5 2, 2.5 years to

come

to this stage, and this is normal. We could do it in 2.5 years, it's also a great thing, it's not a small thing to do it in 2.5 years.

Same cycle will be followed. The next is Pratt & Whitney, then comes Safran, and then it's followed by them.

All right. If you allow me just one question on the numbers bit, which is on the margin.

What I understand is that you have just commissioned the four plants. They are underutilized, and yet we get to see your margins going up every quarter.

Is it the case that we can see more margin surprise from here on because you are yet to see any operating leverage benefits from the new plants?

We always say 33% to 35% plus, and that plus can be anything.

Keep

expecting some kind of definitely a growth is always because we just don't make, we just don't produce, we do a lot of improvements, continuous improvement on the floor. That's our team's culture.

Definitely I wish and hope that we deliver that plus every time.

All right. Thanks for the answers and all the best for future.

Yeah. All right.

Thanks, Gaurav.

Many congratulations for a great set of numbers. The first question I have is related to the utilization as currently we have been maintaining quite good utilization.

The upcoming facility, like the one we have already installed and the one with going to come in six months, do we expect the same utilization or it will defer in terms of how much time we can expect it to come at the same level of 90% plus utilization?

Bhavika. See, if any plant is inaugurated, that means brand new building, brand new machines.

We don't wait for the shop to complete 100%. When talk about Baker Hughes, we were around 50%, 60% of the capacity machines were inside.

When we cut the ribbon, we start producing the parts the same day. When you see the numbers, it will take some time to flow the material to come to the dispatch area, right?

That's what I was giving an answer to Amit also that the Q1 of the current month quarter which is going on, this is the churn-out month. The revenues will follow once the metal gets started dispatching.

Once it's inaugurated, definitely the spindles are running and the metal starts in the flow.

The second question I have on the segment side, as we did quite good on the energy and oil segment. I just want to understand what's driving the growth in the segment.

Is the new addition of the customers or the new products we are adding in the portfolio, if you can give the clarity on that?

Yeah. In that case, I'll tell you these requirements were always there with Azad, right from day one when we started.

We just didn't have the capacity. As we are setting up the capacity, as we are inaugurating these plants, this is where we start taking orders.

It's us who were not taking orders because we didn't have capacity. Now we are increasing the capacity and we are opening the door to take more orders.

This is where the growth is coming in. This requirement was not today.

It was there with us from day one.

Okay. Am I understanding right that we are getting from the same products, we are not adding new products in the segment?

The right way to understand this is, see, I think it's not a straightforward approach, right? Every time our growth with a customer happens on multiple fronts, right?

First is you have certain parts that have been qualified, we are ramping up our market share on those qualified parts over time, right? Let's say we were doing a certain kind of wallet share with our customer on those parts.

Now, because of our progressive deliveries, our wallet share on those parts will continue to grow. Most of the growth that you see today is coming out of qualifications of parts that have been done and ramp-up that is coming in.

Second lever for our growth is that we are also adding adjacent categories or more part numbers to our overall capability. When Mr.

Chopdar was talking about one of you all asked us a question about how we've signed a contract with Mitsubishi, that's an additional capability, higher entry barrier than the current product, and diversified product portfolio, right, with a much higher asset turn, much higher market. We are also adding those.

The third lever for our growth is that we are also adding other customers where we can deploy our capabilities that we've built horizontally, right? This industry, right, any of these industries that we are a part of, by nature have three or four major players dominating the entire industry, whether it's energy, whether it's aerospace and defense and oil and gas.

The capabilities that Azad is building across our customers are very selectively building it so that we can horizontally deploy it and grow the business in the years to come. When we are committing a 25% plus growth, that is not on the back of products that we are going to qualify, that is on the back of the wallet share that we are gaining on qualified products.

Right, I hope that answers your question.

This is also very important to understand by a time that whatever we say the growth numbers are on the qualified products. We never have taken in consideration what is going to come, what we have to qualify, right?

Let it be the engine, let it be the hot gas components. Though the markets are big and all, we know that we have signed up, we are definitely going to qualify, definitely going to increase revenues, but our culture here is what is achieved, what is qualified, what is the growth numbers coming out from them.

That's the reason we give a very decent number and definitely we see a upside going forward, definitely.

Understood. Just last on the aerospace and defense side, currently it holds 70% of our total revenue.

Do we see the same percentage going forward, or we are expecting the aerospace division getting increased in terms of share of the revenue?

Look. Let me take this up.

I think we've tried to address this even in the past. See, Azad's been trying to build a well-diversified business across any sector, right?

If you look at the history, you'll be able to see the demonstration of how we are looking at diversifying. Back in the 2020 or 2021, Azad was largely an energy business, focusing on one product category, which was compressor airfoils, right?

Over the last 5 years, you see Azad has diversified at multiple levels, whether it is segments and then in the segments product categories as well, right? Going forward, let's say we want to look at Azad 5 years from today, you will see that Azad is a fairly diversified business where energy will be contributing anywhere between 55% to 60%, and the balance will be contributed by our other verticals, which is aerospace and defense and even oil and gas for that matter.

We expect our verticals to continue to grow because we have a lot of headroom and become balanced, diversified over the next 4, 5 years.

Out of 80% of current energy and oil and gas, how much is the oil and gas segment?

Ma'am, oil and gas, we are working, we are still under qualification. Baker Hughes is one of our only customers in the segment, and we are we are in the process of building capabilities right now.

If you look at any revenue contribution for the current year, it was not material. It was under, in under about ₹10 crore between because we are largely doing qualification.

FY '27 will be the first year where you will see a ramp-up in this, and you will be because we've just started. In fact, the last notification that we gave in April 2026 was inauguration of the facility, right?

This is 1 month old. You will be able to see how we quickly ramp up in this industry or in the sector in the current financial year.

We we expect to add material numbers by our oil and gas segment this year. It'll follow the same trajectory, right?

It took us, see, it's important to understand that it took us from 2008 to 2020 to get to about ₹120 crore, and it took us, we've grown 5x in the last about 5, 6 years, right? Aerospace was started in 2018, 2019, and in 5, 7 years, we've been able to deliver ₹100 crore of top line in that vertical.

Similarly, oil and gas will not even take 5, 6 years. Oil and gas should be able to reach that number over the next couple years.

This is how the ramp-up works, and this is the nature of this industry,

right? Yes, sir.

Thank you so much. Welcome.

Many congratulations for fantastic set of numbers, Rakesh and the team. Just one question from the risk side.

Any risk are you currently observing from this Middle East geopolitical tension on supply chain or it's business as usual for us? How are we seeing things?

Yeah. See, if you take away the macro risk that are there in every business that is existing today, from our business perspective, I think we have derisked ourselves from majority issues that can be faced in our business, right?

Our business can get impacted if we do not have demand. We have purchase orders and visibility over the next 5, 7 years.

The other thing that we can have a risk on is capacity creation, which we've been able to do to a large extent. Third one was manpower, which we are today doing.

It's about our ability to be able to do all of this together so that execution risk remains. We today are focusing on normalizing our working capital cycle along with it as well.

We don't see from a risk perspective, I think we've been able to manage that because our customer relationships are structured around qualifications which have taken several years to do and are based on multiyear contracts. We don't see risk from that perspective.

Got it. Just a follow-up.

In terms of the new theme which is emerging on energy side, which is nuclear, do we have any scope or any opportunity which we can participate or play in the nuclear opportunity?

We're already a player that is working in the nuclear space. In fact, our energy segment when we talk about it, we cater to gas turbines, nuclear turbines, and thermal turbines as well.

We make critical rotating components for even nuclear turbines, and we make it for the world's largest customer, which is based out of France. It is a government-owned entity called EDF, Arabelle, and a fully owned subsidiary of EDF, which is Arabelle Solutions.

They audited Azad for a few years. We cleared all our qualifications, we cleared all our entry barriers, and we've been supplying nuclear for the last couple of years.

Today, in fact, we are one of the only qualified partners in the country to be producing nuclear turbine airfoils. We are ready and geared up for the opportunity that we're seeing, whether in India or globally.

Great. Many congratulations once again.

Thank you.

Thank you.

Thank you for the opportunity. Just wanted to ask, how many ATDE engines we have the order for, and what will be the delivery timelines?

It'll be difficult to share that information as it's a part of a coveted national defense program. Our Chairman addressed this before, I think we are in the process of delivering it and soon we will be able to share more updates on it officially.

We may not be able to discuss specific numbers about it. We can tell you that, yes, there have been great advancements internally.

We are very confident moving forward on the space, but sharing specific numbers around this will be difficult. Thank you.

Okay. The next question was, what was the capex number for FY '26 and planned capex for FY '27?

For FY '26, I already covered in my presentation. We have done the capex of around ₹392 crore capitalizing during the year.

For FY '27, we are on the trajectory to ramp up the upcoming plants.

What would be the number, if you could quantify it?

Sorry?

What would be the number for FY '27, if you could quantify the number for FY '27?

Most of our capex deployment is linked to the raise that we had done for QIP, right? We'd raised ₹700 crore in QIP, and our CFO covered that the balance deployment of about ₹180...

₹180, ₹190 crore. ...is remaining there, which will happen towards that.

Okay. Sir, do we have any plans in entering the heat treatment plants or surface treatment plants?

Can you repeat

that? Can you repeat that?

Your voice is a little muffled. Can you please repeat your question?

Do we have any plans of introducing heat treatment plants or surface treatment plants?

We already have state-of-the-art heat treatment facility, both, we have vacuum heat treatment as well. We are Nadcap approved, by the way.

We just got Nadcap approved. Also on the special processes, yes, that's the plan because there are some dependencies on our supply chain.

What we're doing is we are ultimately going to have every special process in Azad. However, the critical special processes are already in-house, like shot peening and coatings, all these are already in-house, but few more left, that is also going to be in-house.

Okay. Thank you.

Can I add on the capex, we had announced our capex in Saudi Arabia with Baker Hughes. Are we on track with the plans or is there some delay due to the war scenario?

Sorry, Sahil, your voice is not very clear.

Am I audible now?

We had announced our capex in Saudi Arabia with Baker Hughes. Are we on track with the plans or there's some delay there due to the war?

Also, so

that is still on from an opportunity perspective. I think we are still going ahead with that.

Yes, the timelines have been shifted. We are still in discussions with our customer on how do we best take this forward given the current situation and priorities.

While you see we had signed an MoU, we inaugurated a Baker Hughes plant for us in our dedicated facility. Our growth plans with our customer remain and that is an opportunity that is there.

Our current management bandwidth is today focused on what is there in the current plant, and we want to get that capacity up and running. That opportunity, which exists in the Kingdom of Saudi Arabia, is available for us and will continue.

I think we want to take it up not as the most important priority today. We want to get our current plants up and do that, and then that can happen alongside.

That opportunity still lies in sight. Thank you.

Thank you so much, sir.

You're welcome.

Good morning, everyone. Thank you for the opportunity.

Sir, two questions from my end. When are you guys planning to start civil work for the third plant?

Secondly, if you could share your views on the potential benefits from upcoming engine ecosystem in the country?

I'm sorry. Can you repeat your second question again?

Just your views on potential benefits from the upcoming engine ecosystem in the country.

Okay. The first one, Rishika, I think we've already completed four plants, four lean facilities in the capex that we were deploying towards creating additional capacity, and the balance four plants will be completed in this financial year, right?

Every plant has a schedule that we are following on in terms of commissioning, when are we looking at ramping it up. Obviously, as explained by our Chairman and CFO, it takes specific time before we are able to get a plant to a reasonable amount of utilization, right?

That is a natural course. That is coming up.

In terms of the engine ecosystem, I think I would make it broad-based even further, saying that the opportunity that Azad today is sitting on, Azad has positioned itself always as a manufacturer of highly engineered, critical components across these three segments, which are mission- and life-critical. With the demand for these engines going up over time, with backlogs of our customers increasing, Azad is obviously looking at a much larger opportunity in this domain.

Which also means that the ecosystem in India should be thriving. With indigenization plans of the government, with indigenization plans of how we are stacking up, we are moving from building capability for one engine, and we will only scale it up, from the engine that we are building, we will move from the current 3.7 to 4 kN engine to a higher capacity going forward and eventually contribute to much larger programs.

The entire engine ecosystem, we are seeing this demand grow, and a lot of capacity is being added in the country. We won't be able to talk too much about the engine programs, but, yeah, we see that India is going through that phase where we will now start contributing meaningfully to our GDP from a precision manufacturing industry perspective.

That's helpful. Thank you.

Just one more question. What about the third expansion plan of 85,000 square feet of plant that you are planning?

When will that civil work start?

Ma'am, as pointed out, this year, our focus is very clear. We want to get the current facility and the balance plants committed.

Our next priority would be to ramp these up slowly. Once this is done, we will take on the next facility.

Because today, we are creating capacity basis the schedules that we have with our customers and order book. Once this is completed, our next focus will be building the second plant up over time.

Understood. That's helpful.

Thank you so much.

You're welcome.

Yes, sir. I joined the call a bit late because I was in the impression of 12:00, my question might be repetitive.

I just wanted to understand your thought process around the working capital management and the cash flows generation of the company. We have invested a lot of money in the capacity building, but how we are managing working capital and what sustainable cash flow we can think of in our business?

Thank you.

Yeah. If you see, we have upfront invested into the inventory and all the plants are at different level of capacity ramp-up, as Mr.

Chopdar and Vishnu explained. These plants are at different level of maturity, but our investment has to be upfront.

That is the reason this year the inventory is slightly looking elevated. Looking forward from FY '27 and onward, we see that this inventory will be converted into the revenues, and that will ease out the cash flow from that particular perspective.

All right, sir. I'll go through the entire transcript after the call.

Thank you.

Thank you.

Hello, good morning, and thank you for the opportunity. Am I audible?

Yeah. Sir, congratulations on new contract wins and the hot section nozzle vane order.

I guess you gave a break-up on the order book. I just reiterating the number, it will be around 9,000—8,500 around, right?

₹8,500 crore. Is my understanding correct?

No. We are talking about our closing order book, right?

That is about ₹6,500 net of what we've delivered this year.

My question was basically on the renewals and amendments on the long-term contract that we had, and also the new orders that we had after the Q3 that you indicated order book was around ₹6,500 crore.

So... Yeah.

We've added contracts, and some of these contracts we cannot disclose the order value. That's why whatever can be publicly disclosed is about ₹6,500, but it is ₹6,500 plus, right?

That is the order book that we are looking at from a long-term perspective.

Sir. Got it.

Sir, also on the hot section nozzle vane segment, without getting into the customer confidential details, I just wanted to understand the manufacturing processes. Is it broadly similar to existing airfoil work where you receive a near-shape, forged, cast ingot and you perform high-precision machining, finishing, or this requires something materially different?

Look. Yeah.

I think, see, the process of manufacturing hot section components cannot be discussed on the call. If you are very keen, we would invite you to our company and please visit us.

We'll be able to explain the manufacturing process. I can only give you one statement that there are only three players around the world of precision manufacturing that have been able to crack this materially, right?

The complexity in manufacturing these components is very, very high.

That makes sense.

The process is different than the existing manufacturing process.

Got it,

sir. Makes sense.

You can look at the more operational details if you're keen. If you plan to visit, we'll request our SGA team to sort of arrange a plant visit, and this can be addressed at the plant.

Sure, sir. Sir, basically this question was basically around, given the higher complexity and the single-source position, this definitely will be margin accretive, right?

How will it be during ramp-up and at mature volumes? This is obviously above company's blended EBITDA margin band, right?

See, we won't be able to share See, this is a single contract and you're asking specific information on the contract. It'll be difficult to share, but, once you understand the process of manufacturing, most of these answers questions that you're answering will be addressed.

I would request you to please come down and spend some time with us. We'll be able to explain.

You can also look at, to draw parallels, please look at the, top two or three players that are making these kind of components and what is the kind of profitability and bottom line that they do on these segments. This is publicly available information.

You can look it up and you'll get a sense of it as well.

True, sir. Also one accounting clarification.

I guess in the FY '25 annual report, you mentioned there is capitalization of new product development program. Can you clarify what exact costs are capitalized and which balance sheet line they sit in FY '26 quantum, and if these costs were fully expensed, what would the EBITDA PAT margin look like?

We generally don't capitalize any development cost in our balance sheet, and we expensed out as a part of our good accounting policy. There can be some tools specifically designed for the customer which are capitalized to that extent, but the general development cost or the general expenses are expensed out in the P&L itself.

Got it, sir. That's it from my side, and thank you.

You're welcome.

Thank you. With this, I think I'd like to take this opportunity on behalf of Azad Engineering, our Chairman, our Board of Directors, and all of us, thank you so much for giving us this opportunity to talk about our business, present our thesis, and share how we will be executing FY '27 and beyond.

Thank you so much. We're very excited about the current phase that Azad Engineering is in, and how our capacity is coming up online.

We are only looking at upwards and onwards from this point. Thank you so much.