Azad Engineering Ltd.
ISIN: INE02IJ01035 • Market Cap: ₹18,259 Cr
The 5-Pillar Quality Audit for Azad Engineering Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (37.7%), Return on Capital Employed (8.7%), and equity compounding (6.3%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 0.17 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (36.4%) and 3Y PAT CAGR (154.3%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 131.38 vs PEG of 4.94 and Dividend Yield of —.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 55.8%, backed by 23.6% institutional ownership.
Key Fundamental Strengths
Strong Topline Expansion (3Y Sales CAGR: 36.4%)
Revenue has expanded at 36.4% CAGR over 3 years, signaling industry market-share gains.
High-Velocity Profit Compounding (3Y PAT CAGR: 154.3%)
Net earnings have compounded at 154.3% annualized, demonstrating operating leverage.
Areas to Watch & Potential Risks
Subdued Capital Efficiency (ROCE: 8.7%)
A sub-12% ROCE suggests return on capital barely exceeds the company's weighted average cost of capital (WACC).
Priced for Perfection (P/E: 131.38)
A steep valuation multiple of 131.38 leaves little margin for safety against quarterly earnings misses.
Quantitative Strategy Eligibility
Checking AZAD against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 69/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Valuation multiple or return metrics require further cyclical pullback.
Capital Goods Sector Peer Comparison
Compare AZAD directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| Azad Engineering Ltd. (AZAD)Current | 69/100 | ₹18,259 Cr | 131.38 | 8.7% | 0.17 | — |
| Hindustan Aeronautics Ltd. (HAL) | 70/100 | ₹3.35 Lakh Cr | 35.94 | 13.9% | 0.00 | View |
| Bharat Electronics Ltd. (BEL) | 80/100 | ₹2.99 Lakh Cr | 48.61 | 32.7% | 0.00 | View |
| Tata Motors Ltd. (TMCV) | 71/100 | ₹1.76 Lakh Cr | 42.02 | 31.3% | 0.38 | View |
| ABB India Ltd. (ABB) | 72/100 | ₹1.57 Lakh Cr | 52.48 | 28.7% | 0.00 | View |
| Hitachi Energy India Ltd. (POWERINDIA) | 76/100 | ₹1.50 Lakh Cr | 129.99 | 26.7% | 0.00 | View |
Frequently Asked Questions: Azad Engineering Ltd.
Q:What is the 5-Pillar Fundamental Score for Azad Engineering Ltd. (AZAD)?
Azad Engineering Ltd. has a RupeeTools Fundamental Score of 69/100, placing it in the 'Solid & Healthy' category. Its pillar scores are: Profitability (67/100), Financial Health (73/100), Growth (99/100), Valuation (18/100), and Ownership Quality (78/100).
Q:Is AZAD fundamentally strong for long-term investment?
AZAD currently holds a moderate quality rating of 69/100. While it operates in the Capital Goods sector, investors should monitor its profit margins before initiating long-term positions.
Q:Does AZAD pass the Coffee Can Investing filter?
No. AZAD does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does AZAD compare against other Capital Goods peers?
Within India's Capital Goods sector, AZAD trades at a P/E of 131.38 and generates an ROCE of 8.7%. Compare its 5-Pillar score of 69/100 against top sector peers like Hindustan Aeronautics Ltd. (70/100), Bharat Electronics Ltd. (80/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.