Azad Engineering Ltd (NSE: AZAD) Q1 2026 Earnings Call dated Aug. 05, 2025
Corporate Participants:
Unidentified Speaker
Rakesh Chopdar — Chairman and Chief Executive Officer
Ronak Jajoo — Chief Financial Officer
Murali Krishna Bhupatiraju — Managing Director
Vishnu Malpani — Whole-Time Director
Ronak Jajoo — Chief Financial Officer
Analysts:
Unidentified Participant
Amit Dixit — Analyst
Karan — Analyst
Aditya Bhartia. — Analyst
Pratik Dharamshi — Analyst
Jayesh Shah — Analyst
Rakesh Roy. — Analyst
Manish Ostwal — Analyst
Maitri Shah — Analyst
Kamlesh Bagmar — Analyst
Balasubramanian — Analyst
Nitiksha Shah — Analyst
Presentation:
operator
Please wait while you are joined to the conference. The conference is now being recorded. Ram Sam IT. IT. IT. SA IT. Ladies and gentlemen, good day and welcome to the Azad Engineering Limited Q1FY26 earnings conference call. This conference call may contain forward looking statements about the company which are based on beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involves risk and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone.
Please note that this conference is being recorded. I now hand the conference over to Mr. Rakesh Chopda, chairman and Chief Executive Officer. Thank you. And over to you sir.
Rakesh Chopdar — Chairman and Chief Executive Officer
Thank you so much. Good morning to everyone. Welcome and thanks for joining us today on the Q1FY26 earning call. On this call we are joined by Mr. Murnakrishna Managing Director, Mr. Vishnu Malpani, whole time Director and Mr. Ronan Jaidu, CFO and SGA, our Investor Relations Advisor. Results and presentations are uploaded on the stock exchange and the company website. I hope everybody had a chance to look at it. I’m glad to update that. We started the year on a promising note with our best ever financial performance and delivered standalone revenues in INR 135 crores looking at a year on year growth of 36.7%.
This robust growth was accompanied by margin improvement in both EBITDA and PAT. EBITDA margin grew from 33.6 in Q1FY25 to 36.1% Q1FY26. Similarly, PAT margin rose from 17.4% in Q1 of FY25 to 22.3% in Q1FY26. This growth reflects our continued efforts across multiple areas including capacity expansion in the new plant, qualifications of new components across business verticals and operational excellence among other initiatives. With a very strong order book position of INR 6000 crores plus we are confident that we will continue to maintain this trajectory. The energy sector which is our oldest business segment constitutes the largest part of our book of approximately around $400 million.
That’s around 3,400 crores and this is followed by the aerospace and difference at $200 million, that’s around 1700 crores and then oil and gas at approximately 100 million, that’s around 850 crores. This other book provides us with strong revenue visibility across all business segments. In anticipation of this growing demand, we are gearing up with our new manufacturing facilities. As you are well aware, we have already inaugurated two of our dedicated lean factories in March and April 2025. Overall, in the next 12 to 18 months we plan to have a total of eight dedicated lean manufacturing facilities including one state of the art world class forging plant at Tungipolar.
Rakesh Chopdar — Chairman and Chief Executive Officer
However, it has been challenging to match the growing demand with our facilities. Ramp up. The team at Azad has done a great job handling the situation including but not limited to facility readiness, equipment order deployment and certifications, workforce hiring and training. All of this while ensuring customer deliveries and output of the company are on target. So it’s not easy. Of course it’s challenging, but Team Azad is doing a great job. We anticipate to similarly address these challenges to continue for a couple of upcoming quarters. Towards this expansion, we plan to deploy a capex of INR450 crores during FY26.
Also very happy to share the two subsidiaries that we acquired last year are now EBITDA neutral and should contribute to growth and profitability. From FY26 guidance, we are progressing with our strategy of positioning the company for sustainable differentiated growth and reiterating our top line growth guidance of 25 30% during FY26. Now I hand over the call to Mr. Murnakrishna Ubudaragi, our Managing Director.
Murali Krishna Bhupatiraju — Managing Director
Thank you. Thank you Mr. Rakesh Shobhdar. It is heartening to see broad based growth across all sectors. While we remain focused on scaling operations, we’re equally committed to driving greater efficiency across our value chain which is reflected in our growing margin profile.
Azad being a key supplier in global supply chain for the OEMs, we see a sizable market opportunity from our end use industries. Energy OEMs are making unprecedented investments with the need for reliable power infrastructure and decarbonization. We also see a demand for turbines and industrial applications as well as a replacement market. Likewise, the aerospace and defense segment is also witnessing strong demand which is driven by increased commercial aircraft orders, fleet modernization programs and heightened defense spending. Our existing order book resonates with these growing opportunities. We are actively working with existing and new customers to enhance our wallet share in this space.
Now I hand over the call to Mr. Vishnu Maltani, our whole time director to take this further.
Vishnu Malpani — Whole-Time Director
Thank you Mr. Molikrishna. The growth trajectory demonstrated by Azad thus far echoes our commitment to high growth while achieving operational excellence. Focusing on our standalone segment wide business performance this quarter Let me share with you. The contribution from Energy and Oil and Gas segment for us in Q1 FY26 is at 109 crores contributing to approximately 81.2% of the total revenue. This growth represents a healthy 41.7% year on year increase which is largely on account of capacity addition. With significant values of orders in hand that was shared by Mr.
Chopda, we continue to see a healthy growth from here in the years to come. Talking about the aerospace and the Defence segment, this segment contributed to 17.1% of our revenue during quarter one of FY26 at 23 crores of revenue representing a 26.3% year on year growth. We are upbeat about the growth in the segment with the recent order wins, capacity expansion plans and also the fact that we are moving from competent manufacturing to assemblies and sub assemblies in the future as well, we are confident about the upcoming quarters. By taking small steady steps now, we can build momentum in FY26.
These efforts will lay the foundation for a significant future growth in the future allowing us to progress from small steps to larger leaps and eventually achieving rate strides. Lastly, I would also like to update that our credit ratings have now been updated from A minus to A by CARE ratings. We view this performance of quarter as a strong endorsement of our operational resilience, commitment to excellence and it positions us well as we continue to scale new heights further. I now hand the call over to our CFO Mr. Roland Jaju to further talk about our financial performance.
Ronak Jajoo — Chief Financial Officer
Thank you. Thank you Vishnu. I would like to begin by sharing our standalone clinical performance for quarter one FY26. Let me take you through Revenue from operation. Revenue from operation stood at 135 crore reflecting a 36.7% increase year on year growth compared to quarter one of FY25 and 8% growth over quarter four of FY25. This growth was primarily driven by GE SPF plant which was operationalized in quarter four of FY25 and started contributing to revenue from this quarter. On the consumption side, our gross margins has improved by 3.4% on year on year basis and remain stable compared to last quarter.
Largely due to product and segment mix. Employee cost has increased by 60bps during this particular quarter. This is attributable toward the onboarding of three personnel and we prepare the organization for the next phase of growth. The EBITDA for the quarter came at 48.5 crore making at 46.8% growth year on year basis from 33 crore in quarter 1 FY25. Our EBITDA margin guidance remain continue to be in the range of 33 to 35% depend upon product and submit. We are pleased to announce that we have operationalized the first facility at Punki Bulalam plant with three additional units scheduled to be go live during FY26.
As a result we expect our depreciation to step up and projecting to be 48 crore in depreciation for the full year. FY26 other income saw an increase during the quarter primary from the treasury income because of unutilized QIP funds. This is expected to taper down in coming quarter as these funds are deployed for capacity expansion. Profit after tax for the quarter is to back 30 crores with the PAT margin of 20.88. Here I am taking denominator as a total income for calculating the PET margin up from 17.3% in quarter one of FY25 and 20.29 in quarter four FY25.
Lastly, I am happy to share that both Ajaat prime and Ajad VTC has turned EBITDA neutral within just a few quarters of operations and we are confident they will become cat positive by quarter four of FY26. With this we conclude our presentation and open the floor for question and answers. Thank you.
Questions and Answers:
operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch. Don’t telephone if you wish to remove yourself from the question queue, you may press STAR and two Participants are requested to use handsets while asking a question. Ladies and gentlemen, in order to ensure that the management is able to take questions from all participants in the conference please limit your questions to only two questions per participant. Should you have a follow up question, we request you to rejoin the queue.
We will wait for a moment while the question queue assembles. We have our first question from the line off. Amit Dixit from Goldman Sachs. Please go ahead.
Ronak Jajoo
Yeah, hi. Good morning everyone and thanks for the opportunity. Congratulations for a very good set of numbers. I have a couple of questions. The first one is essentially on the domestic aerospace and defense segment. If we see the focus of the government is now for the indigenization of the engine that would be probably fitted on AMCA, the CO production of Tejas Mark 2 and there have been funds allocated for Cauvery as well. So in light of these developments just wanted to get your thoughts on the. On the potential that Azad sees in the domestic market particularly aerospace defense.
That is my first question.
Unidentified Speaker
Okay. Hi Amit, thank you so much. On the Indian defense as hazard’s focus is mainly on the niche components of the engines and you’re right we are focus is only on the components where we can value add and that’s the first engine what we are manufacturing for drdo. So our focus wish to stay here because we have to deliver two engines in FY26 and once they are delivered and that opens the big door for all the programs which are live going on in Indian defense as this will be the first jet engine to be manufactured right in India for this capacity and that’s definitely going to open doors and we are confident once we deliver these engines and the defence MOD will recognize Hazad for its efforts and we look forward and fingers crossed.
Amit Dixit
Okay. The second one is essentially on another segment of energy, nuclear power. A lot of your customers and peers have been quite open about the potential of this space. Now Aadra that we understand is the only company in India which is accredited by gdf. So just wanted to get your thoughts on the potential that we see in both global and local market from nuclear energy.
Unidentified Speaker
Yeah like the major worldwide EDF controls the nuclear power and the stringent approach you need to get from EDF in which which we broke all the, all the qualifications and we could really get there and we have now qualified the EDF as an approved supplier globally not just for one project or two project and that has helped us get recognized worldwide wherever nuclear plants are coming up. And similarly in India it’s NPCIL and so EDF and NPCL work very closely and definitely there is a massive big opportunity coming up for the nuclear whatever power demand comes up, nuclear power project comes up, we will be the first choice and we are the only choice to be honest today.
Amit Dixit
Okay, great. Thanks so much and all the best.
Unidentified Speaker
Thank you.
operator
Thank you. We have our next question from the line of Karan from Jeta Global. Please go ahead.
Karan
Hi Zaqim, congratulations again on great results. I just wanted to address obviously the topic du jour which is which is tariffs. We don’t know how this is going to play out for sure but if you can help contextualize for us, let’s say the 25% holds. How would that if in any way impact your business? And then I guess the second question would be just I guess more generally on the order book. We’ve obviously started executing against a very large order book. But what would also be interesting to see is that order book growing and doubling and tripling from here.
Unidentified Speaker
As you think about the D rivers of what may. I think you mentioned the domestic defense side. I think you just, we just talked through nuclear. Those could be drivers of the order book growth. Are there any other drivers that you would like to kind of call out or tease out that could manifest over the next 12, 18 months? Yeah. Yes. First thing, thank you so much for the question. I would like to clarify on this tariff thing. You know, it’s a big question mark for everyone in India. What’s going to happen? Right. So let me be very, very specific on this part.
One thing is very sure is if we have got this business now or before, right? Definitely it’s before. So we have competed someone and got this business and the next competition to us is China. So if you talk about Azad competition, it’s in China, Europe, Japan, America and Korea. Right. These are our competitions. Now if the business has come. So I can give you an idea. From China we are 20, 25% competitive. From Europe and Japan we are around Europe, we are around 30, 35%. Japan, we are 40, 45% and similar to the global levels where we compete them.
Unidentified Speaker
So today if we talk about the closest competition, that’s China. Okay. Now we are 25% already, you know, very. We are competing them and China has a 30% tariff. India has a 25% tariff. So the situation doesn’t change for Azad. It remains the same for the customer. So still we are the only option. Again, no matter if another tariff goes up by 10, 15% will not matter us. Right. So that, and if China is the closest and then Europe and if you talk about Japan or they’re already 40, 50% higher than us. So definitely it’s not going to affect Azad for its product line where we are competing, you know, the global peers, what we have at the moment.
Right. That’s one point. Sorry Karan, I need to have your second question again. I just lost it. Sure. Just in terms of order book growth, I just wanted to understand what the, what the drivers of that would be. We talked about nuclear, we talked about domestic defense. What would be the other drivers over the next 12 or 18 months. Yes. So look, our focus is like we what the facilities which are coming up. That is, there is, there are already. We have order books in our hand and already commitments have been given, contracts have been signed and we are committed for next four to five years for the certain contracts we have signed.
And the preparations are going well accordingly. We are setting up the plans coming up. However, there are many more opportunities which we are discussing and we Will just pick them up as we get the right time up. Right. So the current focus is what we have in hand. The conversion of the setting of the plant. It’s not easy to set up one massive facility and such eight are going on in parallel. So you can imagine how tough the situation is for the team to handle the growth, to handle the day to day commitments and to handle the new facility coming up, the certifications, the machines coming in.
So I think next two quarters is what we assume that we have to just stay calm and focus on what we are doing at the moment. Set this up. Opportunities are definitely lined up and we are going to stop here somewhere. So there is a massive opportunity lining up before Azad. So we will take it at the appropriate time. We will not lose it.
Karan
Got it. Thank you.
operator
Thank you. We have our next question from the line of Aditya Bhartiya from Investech. Please go ahead.
Aditya Bhartia.
Hi, good morning team. My first question is on the capacity addition that we have already undertaken. With this kind of capacity addition what would be the revenue potential that we can achieve? How much more can can we kind of generate from the existing capacity that we are already having? And if I heard you correctly you spoke about roughly 450 odd crore rupees of Capex for this year. So what kind of further addition would we see once that kind of Capex number gets computed?
Unidentified Speaker
Yeah. Thanks Aditya. So see again, I would like to again get the same answer what I gave in in the previous question.
What I answered is the setup is still going on. Right? We are talking about a massive facility. We’re not talking of adding few machines or they’re not adding. We’re not seeing the capacity, just buying the machines and putting obviously whole factories coming up. Right. So it’s a very, it’s a very, very big challenge to manage everything. However, however the growth trajectory, what we are seeing is the guidance what they’re giving 25, 30%, definitely that’s going to be maintained. Right. And we have to have this facilities coming up which we see in FY26. We stabilize with almost all the facilities coming up in next 12 months.
And then we can definitely see upside once the factories are up. Right. So this is where I could, I could you know, answer on the. On the capacity and the growth. So we should give at least 2, 3/4 more to stabilize everything. Keeping the growth 25, 30%, you know, together which goes in talent. Sure, sure, sure. Rakesh, the way we were kind of thinking about it earlier is that these are modular facilities. We’ll keep kind of making one operation after the other, ramp them up and then go for the other expansion.
Unidentified Speaker
Has there been a change in that.
Unidentified Speaker
Thought process wherein we want to be making operations a few more manufacturing facilities at Tandem and is it a reflection of the confidence that you’re driving from the order book and in that context can this growth be much, much higher than 25 to 30% that we are speaking about? I agree with you Aditya. That’s why I mentioned the 25:30 is coming is coming from the existing orders. And as we are adding machines, as we’re adding capacity and definitely once it is up, definitely we expect a shift. Yes. From the perspective of next year would you be anticipating a much stronger growth than this 25 30%? Yes, we expect that Aditya.
Sure. And even for this year Rakesh, like we have started the year at a good rate and you also mentioned that you expect this kind of momentum to be continuing. But for the year as a whole we are retaining the guidance. So is it that we just been conservative and we actually from our internal target we are looking at more like a 35 40% growth. But speaking of 2550 only. Yeah look, I have to be a little conservative, right? I should have once the facilities are up because it’s again I mentioned it’s not a small thing what is happening here in Azad.
Right. And managing all together and 25:30 is what we look forward. But definitely we all know once the factories up, once things are stabilized, we’ll definitely see a shift for sure. And one just last kind of follow up on the same aspect you’ve spoken about let’s say turns of over one time closer to like one and a half times. Now that we are doing 450 crore rupees of Capex, does that mean that we have the additional level of going maybe somewhere around 500, 600 odd crore rupees of revenues over and above what we are already doing is that the magnitude of investment that we are undertaking and consequently growth over next couple of.
Years can be significantly faster.
Unidentified Speaker
Not by a magnitude of 1020% but significantly faster than what we’ve seen in the past. Would you like to take this? Yeah. Hi Aditya, thanks for the question. So yeah, so Aditya, we’re looking at a deployment of roughly 450 crores. And this deployment would happen towards three broad areas. One is infrastructure, one is towards, you know, plant and machinery. And we are also investing in some strategic assets like forges, hammers, etc. So if you look at the Overall deployment we should be deploying anywhere between 250 to 300 crores towards creating capacity. Now when you look at a 300 crore investment, I would suggest that with an asset turn of roughly about 1.8 we should be able to generate 550 crores of incremental revenue.
Right now we had already delivered 450 crores so this should be good to go to Take us to about 1000 crores. That’s the right way to look at it. And from that perspective, this year possibly is the peak CapEx year and from next year CapEx drops meaningfully. So we’ve been efficiently deploying CapEx. You know, looking at the demand that we are having, looking at the, you know, capacity that is needed to achieve the numbers that we’ve committed to our customers. So you know, it takes us back to the guidance where we are pretty confident of delivering 25 to 30% that Mr.
Jovda said in the coming years. Sure. Thank you so much. Perfect again.
Aditya Bhartia.
Thanks.
operator
Thank you. We have our next question from Lino Vikash Singh from ICICI Securities. Please go ahead.
Unidentified Participant
Good morning sir. Thank you for the opportunity and congratulations on very good set of numbers. So coming back to the tariff again you explained about the orders. We are cheaper than most of the countries but what about the existing orders which, which protects us for the existing orders any Paris changes and doesn’t impact our margins.
Unidentified Speaker
Thank you for the question. Now this is what I’m trying to say is we have already competed and got these contracts. It’s already done. It’s nothing that is going to be effective. More from this. This is already competing them already.
We are completing the whole world, right. So we are, we are the best cost. The next competition to US is around 20, 25%. They are expensive than us. So example I’ll give you, I’ll give you an example. Like example China is 100 for a component. A Azad is 75 for the same component for the customer. Right. And China has got 30, 30 to 40% tariff. Now India they have put 25% tariff. Still we compete. We still compete. So where I’m coming from, so we have let’s say competed and got the orders already and post that there’s a 25% tariff which has been imposed.
We have exposure to us as well. So yeah is the additional tariff would be bought me by the buyer. That is in the clause. Because if you have to bear that then your margins will get erode. That’s what my. Okay, okay, I’ll give you another Again, I’ll take back it to 100. So 100 plus say example 30 China is a tariff. So it becomes 130 from China, 75 plus 25% status. Still we compete, right?
Unidentified Participant
Oh, okay, okay.
Unidentified Speaker
So we, we are still at 93.
Unidentified Participant
Understood sir. Understood.
Unidentified Participant
What my point. Yeah,
Unidentified Participant
I got your point.
Unidentified Speaker
Yeah. I think just adding to Mr. Ch’s point also it’s important to note that our scope of production or manufacturing is, you know, FOB Hyderabad. Right. So it is X works. And so that’s why it does not impact us to that extent. And also, you know, see, we need to understand that this is an ever evolving situation for all parties in this ecosystem. Right. So so far I think our deliveries are lined up perfectly for the next few, you know, months and quarters and we don’t see any impact as of now.
Noted, sir. So my second question pertains to the Aero and Defense segments. Now that we have already 29% in the order book, you have a long term plan of taking it to 40%. So just from the margins perspective, would Aero and Defense incremental share in the revenue will have a positive impact on the overall margin in the longer term? And how should we look this segment increasing on our working capital requirement as well? Yeah. So first of all, the product line, what Azad is in, is very differentiated. We don’t do what this, we do only the niche.
Unidentified Speaker
Right. As we, as we spoke, I spoke earlier on the engines. We are the only company, we are the only company in India who’s, who’s, who’s producing the engines. There’s no competition to us today. It’s 100% awarded to us. Right. So we don’t go into segments where we see a lot of competition or we, you know, participate in this kind of programs where we need to, you know, look at some times like if you talk about the Indian MOD defense requirements coming up, we don’t participate. Every participate where we can value add, right. Is a nationwide project.
It’s a need of the hour and we are contributing to such projects. It’s really, really appreciable for us to be there and keeping the growth in and in total. Likewise in mod, what we are doing in India is also in the global scale. We have only chosen the products which, where we can, we can really have a value add. So we are very secured in whatever margins we are adding while we take our orders. So that’s also secured. So yes, I would just want to echo Mr. Chopra thoughts that you know, the way we are, you know, estimating These components across sectors, we ensure that you know, these are not margin dilutive in nature and the blended margins of the business will remain consistent at 32 to 36%.
Unidentified Participant
That’s all from my side and all the best. Okay.
operator
Thank you. We have our next question from the line off Pratik Dharamshi from Union Mutual Fund. Please go ahead.
Pratik Dharamshi
Yeah, thanks for giving the opportunity. Many congratulation Rakesh and team for a splendid set of numbers. Couple of questions from my side on the product side. Do we see in terms of new product introduction, is there a material scope for improving the wallet share and introducing a lot more products for our customers where we can do more of R and D and get through with higher share of the wallet of the customers from here or is winning newer clients our goal basically how should one see it from slightly medium term point of view? Yeah, yeah, good question.
So as the products whereas Art plays in are very niche. Okay, that’s very clear that it’s very, very niche and it’s not easy to just produce these companies. Right. So it takes massive time to get the qualifications approval per product, per family. Right. So if you talk about the wallet share, first of all we are on average around 2%, 1 1/2 to 2% of every customer’s wallet share. Azad is holding today for the product line which we have already qualified and approved. So one way it’s going to increase the wallet share from 1 to 2 to 3 to 5%.
Okay, that’s one way which the facility is coming up. The other way to look at it is to what to add more, to add more families in qualification and all that’s the second activity parallel which is going on, which they’re just waiting for like you know that is a continuous process that will never stop. That’s keep on there. Only thing is to ramp up. Once you get approvals you have to ramp up immediately. So that’s why these facilities are coming up. So we are very also very curious and very, you know, excited to close all the growth, I mean to close all the upcoming facilities to start the production ASAP in Boeing.
Pratik Dharamshi
Got it.
Unidentified Speaker
And when we hear likes of Boeing, Airbus talking about a lot of opportunities coming to our side of the world in terms of their order backlog is completely full. They want to move the value chain outside the western side considering the large opportunity which lies ahead of us in terms of catering the global clients as well. Margin trajectory from what we have been guiding that 32 to 30 by 36% band as more and more niche and more and more aerospace related stuff would come through trajectory wise. I’m not talking next one or two years, but trajectory wise.
Ideally this band should go up, is my understanding.
Pratik Dharamshi
Right? How should one see it?
Unidentified Speaker
Yes, yes. Primarily is a component manufacturers for the engines, components and assemblies. Right. Boeing and Airbus doesn’t manufacture engines, they buy engines from Rolls Royce, from ge, from Safran. So our main focus is these companies. Also we want to do a lot of business with Boeing and Airbus, but not all. Right, not all. And we would like to enter in the missed segments also in Airbus and Boeing of getting into the landing gear systems or something which is again niche. So again the prime focus stays with the engines where we have already committed, we have already taken the responsibility of completing our projects in this coming next two, three quarters.
And definitely, as you rightly said, the massive growth opportunity is already there and we will be going step by step.
Unidentified Participant
Got it?
Pratik Dharamshi
Many congratulations once again. All the best.
Unidentified Speaker
Thank you.
operator
Thank you. We have our next question from the line of Jaish Shah from OHM Portfolio Equire Search. Please go ahead.
Jayesh Shah
Hi, thanks for the opportunity. My question is to Rakesh and again it’s on the similar lines as the previous question. Based on your answer, do I really come to a conclusion that Azad will continue to operate in niche areas and perhaps over time will cap the customer wallet share to 4 or 5% to protect the margins. Or Azrad has ambitions to really grow with each customer and perhaps become a system integrator where the long term margins may come up to 20, 25%. So I mean at what point would.
Unidentified Speaker
You choose growth versus margin and when would the trajectory change? Is that five years, 10 years down the line or what is it? Okay, on a lighter note, what if we have both grown? That’s an ideal scenario. We will be very happy to go wrong here. So just for information, the contracts which are signed have already covered these both aspects, right? Ideally you’re saying 25, 30% growth, consistent growth with high margins. Right? So these are already captured, covered, signed off. So that’s a good news for everyone, right? Right. But you know, when we have seen companies like global companies like Apple, Airbus, Boeing, beyond the Point, they do end up checking your bill of materials and do really negotiate and come to some kind of a cost plus understanding because they become as meaningful for you as you become as meaningful for them.
Okay, so I’ll tell you one thing now Mitsubishi like okay, I’ll not name a customer but I’ll say Japanese customer is placing an order. We know we are 40 to 50% cheaper. Right, right. If they’re spending, if they’re spending hundred dollars in Japan we are at 40 to $50. Right. We are maintaining by maintaining our EBITDA and I know and they know that we know they are paying hundred.
Jayesh Shah
Right. Okay. Will they come and ask us? Okay. Reduce further? Rather, rather we can say okay, you want me to increase the prices further. So you know again this is again on a lighter note. Right. So I don’t see any challenges. That’s the transparency Azad maintains with all and enjoys the customers attention that we are very transparent. They know everything about us, we know everything about them. So we don’t, I don’t think we’ll see any kind of such, kind of thing of having this price thing. They may not challenge us or something like that though. Everything is open.
And I think just adding to Mr. Chopra’s point, I think it’s really about the balance that we’re trying to strike. We do not want to compromise on our growth. All our margins, we try to balance both of them simultaneously. If you look at our growth for the last five years between FY21 to 25 we’ve grown at a CAGR of about 40%. But if you look at our CAGR in terms of EBITDA we have grown at upwards of 45%. If you look at our CAGR impact we’ve grown at a CAGR of 60%. So ultimately for us I think the focus has been to scale the business by improving our wallet share and keeping our margins intact or attempting to further improve margins.
So we, we are, we are on the same path. Thank you very much. Best, best of luck and best wishes. Thank you.
operator
Thank you. We have our next question from line of Rakesh Roy from Boring amc. Please go ahead.
Rakesh Roy.
I miss. How much is our order books currently? So our order book is approximately 6000 crores. Okay, 6000 crores. So yeah. My next question regarding sir. So now oil and gas prices is coming down. Do you see any decline in future order issue in oil and gas? No, we, we don’t. We don’t. We’ve seen no impact because we, yeah. So we, we focus on a very niche segment which is mission critical and lines critical. So these are essential components for the segment and we don’t see a demand drop there. Okay. And defense business we are mostly focused on the aerospace.
Do you see any new product addition for other like Armua naming India processor. So I, I just like to slightly correct you. So we’re not, we’re not just a Aerospace company. We are an energy, aerospace, defense, oil and gas. So we focus on each of these sectors equally. So that one and we are adding a lot of products. So if you look at the way we are diversifying our business in product, four years ago 90% of our product was airfoils in energy. So today that business is about 75%, 25% in energy. We’ve diversified aerospace and defense.
Rakesh Roy.
We are adding a lot of new products components. Like we said in our previous call. We are also working on nationwide contracts where we are looking at manufacturing and engine end to end. A lot of products have been added to our portfolio. Okay, and last question, sir, you have guided guiding 25 to 30% revenue growth. This, this growth will come from energy. Same like if you want energy and oil and gas. Sorry, can you please repeat that question again? Sir, for FY26 you have guided 25 to 30% revenue growth. So this growth will be supported by again like a Q1 energy and oil and gas sector.
No, no, I think we are anticipating aerospace. So all of our segments should be delivering, you know, one of the best performance in the history. So we anticipate aerospace also to grow significantly this year including our energy and oil and gas business also. So each of these verticals will be contributing to phenomenal growth. And I think we should towards the end of this year have record performance in each of these business segments. Right, sir. Thank you, sir. Thank you, sir. Best of Sakur. Thank you.
operator
Thank you. We have our next question from the line of Manish Ostwal from Nirmal Bank Securities. Please go ahead.
Manish Ostwal
Yes, sir. Thank you for the opportunity and good set of numbers. My question on Your slide number 25 where you mentioned that the company has signed MOU for expansion into Saudi Arabia. So what are the plans for that market, what we have done so far and in the medium term what we can anticipate from.
Unidentified Speaker
Yeah, so yeah, this MOU was signed with Saudi government. This is, you know, from our customers who are already spending massive money there to do a localization program. And as I mentioned, our focus right now is to come up with our own facilities here.
And so that is discussions are going on. But we have put it in the second priority for that. But definitely we’ll go there. But our prime focus is right now to build all the factories here in this 526 currently in Hyderabad here. Okay. The second question sir, on the, in terms of technical capability with respect to human resources. So, so how the attrition rate, how we are in the company. And secondly On a yearly basis how much money we are spending on R and D and the training stuff to increase the capability and improve the efficiency for the delivery of our products.
Yeah. So human capital, I think if you notice the commentary that Mr. Ranit Jaju shared, we’ve added a lot of key leaders in our business. So today our business is fully manned. If you are looking at the key management people or the senior management people that we’ve hired, we’ve onboarded business leaders for each business segment as well. So last year we had senior leaders from Mahindra who had joined us. Senior leader from Tata who had joined us. Senior leader from another aerospace organization that has come on board. Mr. Mudli came on board from another large precision manufacturing company.
And this process is a continuous process for us. We’re also hiring a lot of people in the middle management and lower management. And there is a dedicated training and development program where each of these individuals are put to in house and then they are eventually deployed on the real projects. This is what we’re doing from a human capital perspective. We don’t spend a lot of money on R and D because we are a build to print company. We have a team which focuses on new product development but we wouldn’t call them as R and D but npd.
Okay, and the last point, just a small clarification. Is it right the company was not taking orders because of capacity constraint. Now with the eight facility, our order book will further grow in a faster way. That is the right way to. I think, I think that’s a wrong, you know, that’s, that’s a wrong statement because if we were not taking orders, we wouldn’t, our order book to sales wouldn’t be eight to nine times what it is today.
Manish Ostwal
Right. So we’ve always been pro at taking orders. But at the same time this is an industry where a commitment is valued. So we do not go ahead and do it if we, if we see challenges in terms of delivery. So we’ve always been supportive of taking newer orders going in newer segments with our customers. Okay, sir. All right. Thank you. You’re welcome.
operator
Thank you. We have our next question from line of Janice Cheda from Kemp Finn family office. Please go ahead.
Unidentified Participant
Good morning sir. And congrats on the great set of numbers. So one question from my side in terms of client addition, if you can give us what were the clients that were there as of March 25, as of June 25 and what are the new clients that we are likely to add going forward considering the order book clarity that we have,
Unidentified Speaker
yeah. So, you know, we won’t be able to share a lot of customers that used the adding. But I can tell you that we are in advanced conversations with some of the sector leaders in each of these business segments that we operate in.
And in the next coming quarters, you should be able to see announcements then give you more info on this. I understand not naming it, but can you just share a ballpark number if that’s possible? Sorry, we won’t be able to share that. Thank you so much.
operator
Thank you. We have our next question from the line of Maitri Shah from Sapphire Capital. Please go ahead.
Maitri Shah
Yeah, hello, I’m audible. Hello. Mentioned on the great results and we have a lot of capacity expansion happening. We’re also introducing new products and the new projects that we signed in. So our peak revenue capacity expectation is about 1000 crores. So do we expect to achieve that by FY27? Is that a correct assumption?
Unidentified Speaker
Ma’, am? The right way to think about this would be to take our guidance and do it because we are very confident of, you know, meeting our guidance and also delivering. You’ve seen our historical performance. We’ve always beaten the management guidance, so we want to stick to it. But yes, you know, we are working very hard internally trying to push everything to, you know, beat our estimates as well.
Maitri Shah
And if it doesn’t grow order, what kind of timelines do we have on that?
Unidentified Speaker
So we are looking at developing this internal plant and all the investments that we would do this year and the next couple of years. We anticipate all of this to get realized over the next five to six years.
Maitri Shah
That is it for myself. Thank you.
operator
Thank you. We have our next question from the line of Kamila from Lotus Asset Managers. Please go ahead.
Kamlesh Bagmar
Yeah, thanks for the opportunity. Sir, just one question on the part of workforce, like say if I see last year we had 1300 employees and as of the quarter it is 1313. So where all we have seen this increase because it’s 1% if I compare it year over year or year, even quarter.
Unidentified Speaker
So thank you. So I think we are adding people across domains and some of the people, employees that get onboarded for us, which are on the lower slide. So they are a part of the contract workforce initially sometimes and then once they are trained and ready to be deployed, then they move into a skilled workforce that we have.
So that is only the model. But if you look at the top nets for us, all the provisions are perfectly manned with respect to SBUs. So that’s something that’s happening. Yeah. And lastly like, like I believe 80 odd percent or you are not providing that how much is the US here in our revenue? So if I assume like say roughly around 75 odd percent would be going to us. So how are we navigating with this tariff imposition? So is it like say entire is entirely taken up by the customer or how are we proceeding on that? How are we navigating that particular issue? So yeah, So I think two things.
Our exposure to us is not 70%. For the last two years it’s been consistent at about approximately 40%. So one point is that. Second point I think you know Rakeshi in his previous questions tried to explain this. See for us I think as of now we are not seeing any impact in our business. We are good to go. Deliveries for the next couple of months and quarters are lined up with absolutely no change in the way we are doing business. Okay, great. And congrats on a very strong excellent performance.
Rakesh Roy.
Great. Thank you. Thank you. Mister.
operator
Thank you. We have our next question from the lineup. Bala Subramanian from Aryan Capital Markets. Please go ahead.
Balasubramanian
Good morning sir. Thank you so much for the opportunities and congratulations for a good set of numbers. Sir, on that order book side we have 6,000 crores kind of order book. What’s the mix of long term contracts and versus short cycle orders?
Unidentified Speaker
So our outlook is all in terms of long term contracts, et cetera. Because our long term contracts convert into purchase orders. Right. So every purchase order that we have is a function. It’s coming out of the long term contracts only. So if you want to know the split of long term contracts. Rakeshi mentioned it but I will repeat it. It’s about $400 million for energy, 200 million for aerospace and defense and about $100 billion for approximately for oil and gas.
Balasubramanian
Okay, sir. And we are moving components to full engine assemblies especially for GRT cast caster B engine projects. What’s the margin applications and scalability challenges.
Unidentified Speaker
So we are not saying that we are moving. We are building capabilities in that department. See the current market for us in component manufacturing that we’re doing mission in life critical parts is extremely huge. But for us to build a layer of capability in competent manufacturing to assemblies and subassemblies is something that we are doing today. Because the moment we enter that space it enters, you know, it, you know improves our target addressable market to a really large step. So that is what we’re doing. But you know that is more from a capability development perspective today.
But the market is significantly large on the component manufacturing team that we donate away. So we want to keep focusing on that and improving our wallet share while at the same time we keep building capabilities in moving up the value chain for manufacturing.
Balasubramanian
Okay, sir. So on that export size we have more than 80 percentage of revenue. And the segment size or segment side also like energy, gas, these things are more than 80 percentage of revenue. How do you look at exports and the segment side, whether we’ll maintain same kind of share or like is there any plans to reduce it, focus on other sectors?
Unidentified Speaker
I think we are not looking at reduction from any perspective. I think our business model is pretty straightforward because we work with largely global OEMs. That’s why our business is, you know, export oriented. And that should continue for the longer period. Okay, simple.
operator
Thank you. We have our next question from the line of Nitiksha from Anvil Capital. Please go ahead.
Nitiksha Shah
Oh, hello. Yes ma’, am, we can hear you.
Nitiksha Shah
Yeah. Congratulations sir, on a great set of numbers. I just wanted to understand, sir, as you mentioned, we are a builder to print company in general. We have seen that to print companies have lower margins sometimes like low single digits. So how. How do we distinguish ourselves for a BTC BTP company to have such good set of margins?
Unidentified Speaker
Good question. But again I. What we. What we have been telling is we operate in niche. So that’s exactly. When we say it’s niche, everything is mission back. Right. And when we say we have only one company for measure of the components manufacturing in the country, that means there is nothing called what every. It’s not a normal business. They have 3D components, three dimensional components. Right. So it’s not easy to manufacture them. And it’s more over a process, process engineering what we do on the floor. And this is where we generate the margins from.
Nitiksha Shah
Okay. So the technology is provided by the customer.
Unidentified Speaker
No, no ma’, am, no. It’s all. All in us. It’s. It’s the teamwork what we do here.
Unidentified Speaker
Okay. Because the technology and everything is provided by the customers. That’s why the margins are lower. And in built to spec it is more. The process is innovated from the rm. So then where do we fit in? Actually. Yeah. Correct ma’, am. It’s a very long story. I. I request you to. I invite you to the facility here. I would like to demonstrate how we do this. It’s a very long story.
Nitiksha Shah
Okay. Okay, sir.
Nitiksha Shah
Thank you sir. Congratulations and best of luck.
operator
Thank you. We have our next question from the line of Tejas Mehta from Norwest. Please go ahead.
Unidentified Participant
Thanks for the opportunity. Congratulations on a great set of numbers. One quick question.
Unidentified Participant
Between Q4FY25 and Q1FY26 the Aero revenue just had a slight dip. What would you attribute this to? Cyclicality that you see along the quarter? Yeah, see the first thing what I would like to mention is we have a lot of families of components per OEM per segment, per part number, right? So there is a cycle of qualifications and there’s a cycle of after you qualify you get approvals and then you add capacity and then you start doing the revenue. So it’s definitely there are not one family, there are many families of many OEMs which are falling in the pipeline, in the queue, right? So unless you don’t qualify, don’t get approvals, you can’t generate much revenue.
S
Unidentified Speaker
o that’s a cycle, that’s a process. So this is not that we have declined somewhere or it’s not that we have not grown in that. Definitely there is a lot of qualification parts on the floor there. That’s very understood. However the capacities, what we are increasing is not just for one segment, right? So we are going in energy, we are going in aero, we are going in defense, we are going in oil and gas. So all the four simultaneous capacities are getting increased. So definitely I would say that there is, there are a lot of parts which are under qualifications and qualifications don’t generate much revenue and if you don’t qualify, don’t get approval, you may not generate revenue.
So it’s, it’s, it’s a cycle. And yeah, having said that, just to add to Mr. Chukda’s point, so there’s no. So you know, I wouldn’t call it decline, you know, if the numbers gone down by a few crores, I wouldn’t call it decline. I think the right way to look at the segment which is aerospace and defense. I would suggest please look at say our overall numbers when you look at it over a period. When you look at our numbers for CH1 or when you look at our numbers for the full financial year you will see that this vertical will demonstrate one of the best growth segments of this, you know, this year we don’t see any challenge from that system.
Thanks. Appreciate the robot demonstrated in the past. Thanks for the clarification. Yeah.
operator
Thank you. This will be the last question for today and I now hand the conference over to the management. Closing comments. I’m sorry, do you have one more question or are you saying this was. The last question and.
Unidentified Speaker
Okay, okay. Well thank you so much. Thanks. Thank you everyone for the time you guys have spent over last one hour. And we appreciate your support and we appreciate your insightful feedback and they’re most welcome. Please keep, keep giving us feedback so that we can deliver. We can perform much better. Thank you so much. Thank you. Thanks everyone. Thanks everyone for your support.
Unidentified Speaker
Thank you. Thank you. Thanks a lot for your support.
operator
Thank you. On behalf of Azad Engineering Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.