Explained: Why Azad Engineering share price jumped 14% despite market selloff

Azad Engineering shares jumped over 14% to Rs 1,670 during trading on Monday after the company announced a major long-term contract with Mitsubishi Heavy Industries worth Rs 700 crore.
Around 12:15 pm, the shares were up 9.49% at Rs 1,599.70, giving Azad Engineering a market capitalization of Rs 9,450 crore.
In a filing to the stock exchanges, the company confirmed it has signed a Long-Term Contract and Price Agreement (LTCPA) with Mitsubishi Heavy Industries, Japan. This contract involves supplying complex rotating and stationary airfoils for gas and thermal power turbine engines, addressing the increasing global demand in the power generation industry. The current phase of the contract is valued at approximately USD 82.89 million (Rs 700 crore) and is expected to strengthen the strategic relationship between the two companies.
Azad Engineering debuted on the stock market in December 2023, launching at Rs 720 on the National Stock Exchange (NSE) and Rs 710 on the BSE, compared to an issue price of Rs 524. Since then, the stock has increased nearly 220%. However, it has also faced a correction of about 20% from its 52-week high of Rs 2,080, reached in June.
Analysts estimate an average target price of Rs 2,150 for the stock, indicating a potential upside of 34% from current levels. The consensus among two analysts is a ‘Strong Buy’ recommendation.
Founded in 1983, Azad Engineering specializes in precision engineering and manufacturing solutions, providing high-quality aerospace components and turbines to original equipment manufacturers (OEMs) in sectors like aerospace, defense, energy, and oil and gas. The company’s products are known for their complexity and critical importance.