Ladies and gentlemen, good day and welcome to Azad Engineering Limited Q3 FY 2026 earnings conference call. 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 this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. Before we begin, a brief disclaimer. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance, and it may involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Rakesh Chopdar, Chief Executive Officer and Chairman. Thank you, and over to you, sir.
Thank you. Good morning, everyone, and thank you for joining us for the Q3 and nine-month FY 2026 earnings call. I am Rakesh Chopdar, Chairman and CEO of Azad Engineering Limited. On the call with me today are Mr. Vishnu Malpani, Whole Time Director, and Mr. Ronak Jajoo, our CFO. The results and investor presentations have been uploaded on the stock exchange and the company website. I hope everyone has had the opportunity to review them. Let me begin by saying that this quarter reflects disciplined execution across all fronts. Revenue growth margin stability, new customer onboarding, contract expansion, and steady progress on our capacity creation roadmap. Let me talk about the performance overview. For Q3 FY 2026, we reported revenue of INR 155.8 crores, registering growth of over 31% year-on-year. EBIT for the quarter stood at INR 60.1 crores, registering growth of over 40.7% year-on-year.
Profit after tax was INR 34 crores, registering growth of over 40.1% year-on-year. Despite expansion related costs and ongoing ramp activities, margin remain strong and stable. This reflects operating discipline, product mix strength, and execution consistency. For nine-month FY 2026, revenue has grown nearly 32% year-on-year. EBIT and PAT have shown significant growth over last year. Importantly, our nine-month profitability has already exceeded the full year of FY 2025 level. This demonstrates the structural strength of our business model. Our focus continues to remain on profit growth. We are not changing scale at the cost of margins. Every growth initiative is aligned with long-term sustainability and value creation. Order book and customer engagement. Our order book remains strong at over INR 6,500 crores plus, providing multi-year revenue visibility. Since listing, we have consistently grown our order book quarter after quarter.
This reflects increasing trust from global OEMs and the expansion of wallet share across both new and existing customers. A key highlight this quarter is our engagement and contract progression with Safran and Pratt & Whitney for highly engineered, critical rotating aerospace components. These partnerships are built over years of engineering validation, qualification, and performance consistency. They represent high entry barriers and deep integration stickiness into customer programs. Energy and oil and gas continue to contribute the majority of revenues. At the same time, aerospace and defense is steadily increasing its share and will play an increasingly important role over the medium term in creating a well-diversified business mix. On the capacity expansion, as we have stated in previous calls, FY 2026 is a year of stabilization. The new plants dedicated to GE, Mitsubishi, Siemens programs have been capitalized.
Each plant is currently at a different stage and under stabilization, qualification of both facility and products while scheduling the customer demand. It is important to understand that stabilization in our industry is not immediate. Aerospace and energy components require stringent validation, certification, and customer audits before full capacity utilization is achieved. We expect stable operating levels by FY 2027 and maximum utilization starts by FY 2028. The capacity we are creating is substantial. These are not incremental expansions. We are building multi-fold scalable infrastructure designed to support long-term growth visibility already secured through firm contracts. Managing simultaneous constructions, equipment commissioning, workforce training, certifications, and deliveries is complex. However, our team have executed this phase with discipline and focus. On the growth outlook, based on plant readiness, secured order book, and customer demand visibility, we remain confident of achieving 25%+ revenue growth over the coming years.
FY 2026 remains a transition year where stabilization efforts continue. The larger operating leverage benefits will be more visible from FY 2027 onwards as capacity utilization improves. We are building capacity against firm contracts and long cycle programs. There is no speculative expansion. With that, I will now invite Mr. Vishnu Malpani to provide operational insights. Thank you.
Thank you, Chairman, for an insightful discussion on the quarter results. I am Vishnu Malpani, Whole Time Director of Azad Engineering. I will take you through some additional information of our operational performance this quarter. From an operational perspective, Q3 and the nine-month period have been about disciplined execution, like Chairman mentioned, and structured ramp-up. This quarter also represents our highest-ever quarterly and nine monthly performance. We have delivered revenue growth across all our business segments. During this quarter, our operational efforts have been focused on strengthening execution and discipline across the organization. We have continued to embed lean principles into our newly built facilities. These manufacturing facilities that have been designed, have been designed with absolute precision around workflow-based layouts, monitoring systems, and world-class infrastructure. As our volumes build and operating leverage comes in, we will improve through natural fixed cost absorption and cycle time optimization.
At the same time, we are also strengthening our supply chain reliability. We are seeking customer approvals and progressively improving our domestic sourcing to improve agility and reduce our lead times, also helping us manage our working capital better. However, all such initiatives remain fully aligned with OEM qualification requirements. Traceability, compliance, and quality integrity remain non-negotiable. Equally important has been for us to build capability. Scaling infrastructure without scaling human resource of people is unsustainable. We have added in this financial year skilled engineers, machinists, quality professionals across the organizations, across levels, and training still remains an important part of our entire employee journey. Aerospace and energy manufacturing demand repeatability, documentation discipline, and audit readiness. Operational capability is therefore a structural investment and not a tactical one. From an operational standpoint, FY 2026 remains a year of calibrated ramp-up.
Stabilization will continue through the year, and by FY 2027, we expect these facilities to start operating at stable levels, enabling stronger operating leverage. Our approach remains measured. We are scaling against firm contracts, long-term revenue visibility. We are maintaining quality leadership and ensuring that our growth is both disciplined and sustainable. With this, I will now hand over the call to Mr. Ronak Jajoo, our Chief Financial Officer, to give us a quick overview on financials. Thank you. Over to you, Ronak.
Thank you, Vishnu. From a financial standpoint, quarter three and nine month 2026 reflect both strong growth momentum and margin stability, even as we continue to execute one of the largest capacity expansion in the history of the company. Let me walk you through the key highlights of the results. For quarter three FY 2026, revenue stood at INR 155.8 crore, reflecting over 31% year-on-year growth for the nine month period. Revenue growth remained close to 32%, supported by the strong execution across energy program and steady scaling within the aerospace segment. Importantly, this growth is broad-based. It is not dependent on single customer, geography, or a segment. That diversification provide resilience and visibility. EBITDA for quarter three was INR 60.1 crore on a sequential basis. This represent growth of approximately 16.9%, and for the nine month period, EBITDA had grown by approximately 38.4% year-on-year basis.
Despite the initial ramp-up cost associated with the new facility and higher depreciation from recent capitalization of assets, margins have remained stable. This stability reflects a combination of improved product mix, pricing discipline across long-term contracts, and better absorption of the fixed overhead and ongoing supply chain optimizations. As utilization level improve from FY 2027 onward, we remain confident our long-term EBITDA margins profile is in range of 33%-35% is sustainable over a long period of time. Profit after tax for quarter three stood at INR 34 crore, reflecting strong year-on-year growth. For nine month 2026, PAT has grown by 55% year-on-year basis, significantly outpaced revenue growth. This is primarily driven by operating leverage, stable margin, and interest income from fixed deposit of QIP proceeds. Notably, our nine month profitability has already exceeds full year FY 2025 level as chairman has explained. This enforce the exclusivity of our operating platform.
From a capital allocation perspective, capital deployment continue in line with our expansion roadmap. Every major investment is directly linked to the secured order visibility and long cycle customer programs. We are not building a speculativity or idle capacity. Each facility has defined demand backing it. At the same time, we remain financially disciplined. Balance sheet prudence remain a priority even as we support long-term growth. Given the strength of our order book, plant readiness, progressive stabilization and stable margin structure, we remain confident in delivering 25%+ revenue growth over the coming years, with a sustainable margin in range of 33%-35% at EBITDA levels. Our financial approach remain conservative in planning while enabling ambitious and disciplined operational executions. Thank you. Now the floor is open for question and answers.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may please press star and one on your touchtone 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, we will wait for a moment while the question queue assembles. The first question is on the line of Vikash Singh from ICICI Securities. Please go ahead.
Good morning, sir, and congratulations on a very good set of numbers. My first question pertains to our next four sets which we are under commissioning. Could you give us the timeline and is there any more dedicated set which we have already tied up with any OEMs at this point of time?
Yeah. Thank you for the question. Look, the facilities which are already inaugurated, right? When we say it is inaugurated, the building is up, machines are in, and it is ready to start the production-wise. But as I mentioned, before we even start the production, though, like we were doing in our existing facility here, and the new facility requires a lot of the audits. They have to re-audit the facility. There are certifications, the validations. That will take some time. As we finish with GE, Mitsubishi, and Siemens, we are in progress and almost we are in the finishing stage. As we finish the validations, we start the production. Not all the floor happens together. It goes with few machines and few product line, and once they are approved, then the production starts.
That is what we mentioned, it will be done by FY 2026 stabilization and FY 2027 we can see that we can stabilize the operations, and maximum utilization start by FY 2028. It is a process that we all have to follow.
Yeah. Noted, sir. So second question pertains to now we are tied up with Safran and there is a huge possibility of that engine manufacturing ecosystem for Rafale to get developed in India.
Yes.
How do we see our wallet size then? Is there any clear idea which you can give? Effectively, given our capacity constraint is the main hurdle for the higher growth, do we expecting to now go for that 75,000 sq ft third facility simultaneously? How should we look at the growth plans from here onwards now?
Yeah, if you talk especially about Safran, just to remind you, any of the OEMs which Azad is working today, it is not on the offset policy we worked with them. We are a global supplier, right? If Safran or GE or Mitsubishi or any OEM are giving business to Azad, that is not under obligation of the offset policy. We are a global supplier. So whatever requirement comes in, it goes to the global benchmark, right? So we will not know which country is using our product line and which country they are selling their engines. However, now Safran coming to India, that gives an additional boost to companies like Azad, where we have extra benefits coming in. So Azad is playing global as well as will benefit from the obligations what Safran must be having of doing business in India with the domestic suppliers.
This is nothing but a bonus. So that way I would clarify, Azad is just not a domestic supplier, it is also a global supplier.
Noted, sir. Lastly, on the development of that small engine which you were doing, any update on the same?
That's still under progress. We have finished, I think, a good progress. We are around 70, 75%. As you asked me the progress scale, we are around 75% on that.
By when we can expect the 100%?
We are planning very soon. A couple of months, I think we should be able to be positioned to deliver the engine.
Noted, sir. Thank you, and congratulations once again for a very good set of numbers.
Thank you.
Thank you, sir. The next question is on the line of Amit Dixit from Goldman Sachs. Please go ahead.
Yeah. Hi. Good morning, everyone. And congratulations for a very good set of numbers on all the fronts. A couple of questions from my side. Now, if we see the overall ecosystem, Mitsubishi, GE, all are raising their guidance on energy front. Safran reported a couple of days back, again, a very good set of numbers in increase in guidance. Even some of your peers, like [ROH], for example, has increased its guidance on the LEAP components delivery. So in this context, how do you see the traction in your line of business, since we also now have a foothold in most of these key accounts? So how do you see actually these foreign OEMs coming to you, the engagement with them, has it increased?
Amit, in that sense, just wanted to ask that this order book that we are having INR 6,500 crores, how do we see the trajectory of this, let us say, in next couple of years? I am not expecting a quarter or a six-monthly view. It is like over a couple of years kind of view.
Thanks, Amit. Thanks for the question. If we talk about the engagement with the OEMs, right? If we see when we started with energy, Mitsubishi or GE and Siemens or any other world-grade customers we have. In the years 2010, then 2012, then 2014, what we remember as we started engagement with all these OEMs, and we were at exactly the same stage what we are today with Safran or Rolls-Royce or a GE or a Pratt & Whitney. I would say, as we progress, it is with the qualifications we are doing with the existing customers which are in hand. We signed up with Safran, we signed up with Pratt & Whitney, we signed up with Rolls-Royce. As we move forward with the products which we have signed and the product line which we have already secured. All right?
That gives us an edge that we are not new to them now. It is not that knock, here we come, we are Azad to introduce and we start a thing. It has already started. It has already started, and it has started taking a shape. Once this is established, the best part is Azad has got a beautiful track record of delivering the most complex solutions any OEM is seeking today, they come to Azad. That is the beauty of Azad here, that we can give all kind of solutions that a customer needs. So that has been established. What are we waiting for is to just finish the cycle of this qualification. Once this tick in the box is there, then the door opens, and it is already open for us. We know what is coming. We know what are the pipelines they have.
We know we have the visibility, what each and every OEM is looking at. As you know that these parts are not quarter, as you rightly said, history, we cannot gauge this by quarter to quarter. This goes in a very long strategy, right? We look at a very forward-looking thing, which has to be very well managed before they even give us a production order. All these preparations are going on well.
Great. The second one is essentially there were a lot of, I think, concerns on the investor side on the possible tariffs by the U.S. But with now U.S.-India deal is mostly done, I believe those concerns would be over. In that context, how do you see the opportunity for us shaping up, both in terms of U.S. and in terms of Europe, of course, with EU-India FTA also in place? I will give you context. I was speaking to the India head of Pratt & Whitney the other day, and he made a remark which was very interesting that they are looking to increase their delivery from India by 10x. Earlier it was 6x, by the way, but after U.S.-India trade deal, they are looking to increase it multifold. So how do you see the U.S.-India trade deal as an enabler for your business?
Of course, in all the concalls, you have maintained that this doesn't really matter for your kind of product. But just wanted to get your thoughts on this.
Yeah. I mean, I was about to answer that that in my previous calls also, I mentioned that these tariffs won't affect the products what Azad Engineering is holding because they are essential. They are something long, very long qualification products where even the tariff goes double, it will just not go away from Azad Engineering because it takes a lot of time to develop any other supplier. So in that angle, there is no effect before, there is no effect after. However, the customer at ease, they are more happy that, okay, we don't have to pay the tariff and we are back on track with Azad Engineering. So that is where the best part what having is happy environment. That is only changed. Nothing else has changed.
And in terms of cost competitiveness now, earlier there were some lingering, I would say, doubts that okay, with 50%, 55% tariff, maybe the cost competitiveness of Azad Engineering could be compromised. But with now 18%, I think you feel very comfortable.
Yeah. Exactly. That's what I'm saying. Customers are very happy now. Before they were like, "Okay, we are paying some tariff, but we have no choice." But now we are happy that we are back with Azad and we are happy with Azad and it is back to the olden days where how we used to work, and they were more happy than working with Azad on the pricing, the quality, the deliveries. So I think it has turned around more positive.
Wonderful, sir. Great. Congratulations and all the best.
Thanks, Amit.
Thank you, sir. The next question is from the line of Manish Ostwal from Nirmal Bang Securities Private Ltd. Please go ahead.
Yes, sir. Thank you for the opportunity and good set of numbers and maintaining the extraordinary execution track. Sir, I have a slightly longer-term question on the company's growth and the capital decision-making. I was checking, since the IPO, the company has built a formidable customer profile and 39% revenue CAGR, which is quite impressive. We have raised money through QIP and the IPO, almost INR 940 crores for the funding our CapEx program, as well as some de-leveraging because of that. As I model or visualize Azad Engineering towards a journey of INR 1,800 crore to INR 2,000 crore company by 2030, given our order book and the growth trajectory which we guided in the past in the current quarter. The growth trajectory achievable without any equity dilution, that is a question, and the financial leverage can increase.
That is a question in our investors' minds, and when we interact with the investors there. The question is, when the Azad business model will move from capital-consuming growth model to self-sustaining growth model. I want your comment on the management commitment on that trajectory, how we should think, how we should build our expectation for that journey for Azad. Thank you.
Yep, thank you. Thank you for your question. Let me start by saying, we had raised INR 240 crores in IPO, but out of that, INR 180 crores were towards debt reduction. Hardly any capital from IPO proceeds was used towards building CapEx. Right? We started deploying capital in the newer facility only with the proceeds of largely through QIP, where we had raised about INR 700 crores. Our guidance to the market has always been that we are investing roughly about INR 200 odd crores in infrastructure, INR 200 to INR 250 crores in infrastructure, and the balance INR 450 odd crores to INR 500 crores will be deployed towards actual plant and machinery. Right? Which will be leading towards an output.
From an asset turn perspective blended across our business, we believe that we should be able to do the journey. We were already doing about INR 450 crores, which we delivered last year through our existing facility. Through this incremental deployment of INR 450 to INR 500 crores in machines, we should be able to generate anywhere around 1.7-2 asset turn of INR 500 crores. If you look at that gives us another easily between INR 800 to about INR 1,000 crores sort of a visibility incremental to the INR 450 that we delivered last year. Now, if you add that, it gives you the entire roadmap from INR 400 crores to say INR 1,500, INR 1,600 crores and beyond. Right?
Yes, yes. The second, I think, sir, I was just looking the QIP proceedings nostro accounts of our filing where you mentioned that there is a use of general corporate expenses of INR 156 crore which is almost 34% of our revenue. Can you just brief about the nature of this expenditure, where we spend that money and how the company will benefit out of that? Can you just highlight for us?
Yeah, sure. As Vishnu mentioned that we are deploying around INR 450, INR 500 crore in plant and machinery that require around 10%-15% has to be deployed towards the ancillary which required your installation cost and all those things which amount to around INR 100, INR 150 crore. Out of INR 250 crore, INR 100, INR 150 crore has gone towards the debt, to stabilization debt, and balance has gone towards the long-term working capital, and few of the machines which are not part of the QIP, we have funded that.
All right. What is the CapEx in nine months and the CapEx guidance for next couple of years for our business?
For nine months we have capitalized plant and machinery. As we have mentioned that we have capitalized MHI and Siemens plant during the last nine months, which amount to around INR 250 crore from the plant and machinery side. Going forward, as Vishnu mentioned, that balance QIP money has to be deployed over the next one to two years going forward from here in FY 2027 and 2028.
All right, sir. Thank you very much for answering my question. All the very best for the future execution.
Thank you.
Thank you, sir. The next question is from the line of Mulesh Savla from Shah & Savla. Please go ahead.
Thanks for taking my question. Heartiest congratulations to team for the excellent numbers, especially when we are ramping up the production facilities, plant and machineries are being installed.
Thank you.
Employees and people are being hired and there are a lot of other expenses. Sir, my first question is to Mr. Chopdar. We have excellent product profile. We have long-standing customer relations and our additional manufacturing facilities are being ramped up. We have already grown at about 30% plus in the recent past. Still, what is restricting you to guide us for the 25%+ growth on the top line and not 30%+ ? That is my first question.
No, good question. Thank you for the question. As I mentioned, that stabilization is very important, right? FY 2026.
Correct.
We want to stabilize Azad. FY 2027 is where we start the operating levels, as I mentioned in the earlier statement also, that qualifications, audits, product qualifications, that is going to take time along with the execution and the ramp-up. When it comes to maximum utilization for FY 2028, I will change my statement of the growth. That time it will be nice to give this statement at that time. What do you say?
Right. I appreciate your conservative guidance and over-delivery.
Exactly.
But I feel that we are too much conservative, because during all these years, we have been facing these challenges of expanding capacities and all, and still we have delivered 30%.
Yes.
And with these specific dedicated facilities and other facilities coming up, I am sure we should be able to cross 30%+ guidance.
This is what we expect, because we are struggling.
Right.
What we are struggling, building this massive facility, it is not a small facility.
Right.
Making a world-class factory, having these world-class customers, having a world-class product, and such thing, hats off, and I am lucky to have a team. What everyone is handling so beautifully. We have a great coordination going on. All this, we are still on the growth of what we are delivering now, which is commendable at this stage, I would say that.
Yes.
As it settles down, then there is nothing that we can be stopped, right?
Great. Sir, my second question again to you is that you said that our gas turbine engine is likely to be ready within another couple of months.
Yes.
I believe it should be before the end of this financial year. Can you throw some light on kind of potential that can throw up for our company in maybe
Yes, this will be the first jet engine of India.
Correct.
It is 100% indigenous, right? This is the first, and the 100% engine is manufactured in Azad.
Right.
When we say it is first, and when we anticipated that we will finish off the deliveries in Q3, Q4. However, there are certain things which are jointly done by Azad and GTRE, correct?
There are certain challenges which comes in back and forth, being the first engine. We anticipate some kind of challenges, but we do not anticipate the timelines. These timelines are just, we are hopeful that we are in the last leg of the design phase, what GTRE is doing.
Right.
We are in the last phase of manufacturing. I do not see any more delays in this. However, couple of months, we never know if we see some more surprises, as this is the first engine. We all should be very happy that we are very near to get India's first jet engine out.
Correct. That will be our nation's pride.
Yes.
But if you can, sir, just give rough numbers to what kind of business that it can throw up to Azad.
See, right now, we are not looking at business. Right now, we are looking at to get this engine successful. That's my main focus now.
All right.
I am not concerned. This is the need of our country, and we all should be proud of it.
Great, sir. I wish you all the very best. That's all from my side. If I have any question, I will join back with you. Thank you so much.
Thanks.
Thank you, sir. The next question is from the line of Gaurav from Avendus. Please go ahead.
Yeah. Thanks for the opportunity. First question is on the aerofoils opportunity that we have. Given that gas turbines are in very high demand currently because of from the data centers, we have seen globally gas turbine prices have gone up considerably in last one year. The question is that, have you also seen any benefit of that gas turbine price increase as OEM passed on that benefit to you as well, which you have seen in a good margins currently? That's question number one. Second question is that, where are we in the qualification cycle, especially for the engine aerofoils, and how much time you think it will take for you to get the qualifications?
Fine. Thank you for the question. Let me answer it in two parts. The first question, I think, see, we are definitely experiencing a lot of demand, which is coming back-to-back from our customers directly. Because we are the only qualified partners in India, we are a direct beneficiary of this, and we've been doing it. Plus with the global situation, we are seeing extremely high demands coming to us. Now it's only our ability to be able to build up infrastructure and execute, we shall keep growing our volume share. In terms of the price, we are not seeing any. Pricing decisions are not being done. For us, our contracts are longer term, where we maintain our 30%-35% margins and continue to grow on that front. We are not looking at short-term gains from this perspective.
We are building a very robust relationship, strategic relationship with our customers, which is not a supplier-customer relationship, but a partnership. This is our intent to do, but we are experiencing heavy demand, so as to say. So that's part number one of your question. The second is w e are aggressively progressing on our airfoil qualification on the aerospace side as well. In fact, if you see these developments that are happening with our customers on this side, is a testament to the fact that there is progress that is happening and customers are recognizing it. That is why we are becoming a part of not just legacy platforms, but also a lot of new engine platforms that will be driving the aviation for the future, right? Across all of our engine manufacturers. We have recently done a contract and finalization with Pratt & Whitney, which we notified. There has been progress that Mr. Chopdar spoke about on Safran. Rolls-Royce, we started working in 2024, we should be starting to supply something in FY 2027. All of these things are a mix bag.
Let me bring about one point, which is important to understand, and I think our chairman also touched upon it. See, today, what journey we are with Rolls-Royce, Pratt & Whitney, Safran and all of these engine manufacturers is what we were with GE, Mitsubishi, and Siemens a few years ago, right?
While we are ramping those up because we have finished qualifications, this will be a journey of qualification. We will build qualifications to a point, and slowly, this will be the next leg of growth for us in the future. But qualifications are progressing really well, and you should be able to see some revenues coming out of the aero-engine department in the coming year.
All right. I have two more questions on the accounting side for Ronak. Ronak,
Yeah.
Number one is, in this quarter, have you seen the sales of services going up considerably compared to last quarter, which has benefited the gross margins and EBITDA margins? That is number one. Number two, what are the inventory days and working capital days in this quarter?
Yeah. Coming to the first question, the business is quite stable and more or less it is in the same line in the historical numbers. As I mentioned last time also, we do not track business on that particular front like that. On the working capital side, H1, as I mentioned, that we are targeting around 190 to 200 days. We have started working on that direction, and the results are coming, but it will take some time to stabilize and it will take time to have. For H2, we are targeting around 140 to 150 days, because once we completed all the things on the distribution, supply chain, and discounting part, we are quite confident it will come to 140 to 150 days time.
No, but my question is, have you seen inventory days going up in this quarter, given the growth that you are posting?
Not really. Yeah.
Okay.
WIP is. This is into the WIP and you start reflecting this in H1 and H2, as I mentioned, but right now it is still on the sustainable basis, what we have seen in the historical periods.
See, this is progressive change, right? All these things that we are doing will start reflecting over time.
Right.
Our endeavor was to finish this by the end of this current financial year. But I think this is while the complexity in our business that we spoke about, we are in the ramp-up phase, transition phase. All of this should. So probably in the next about two quarters, you will see the first milestone being hit, and then it will start reflecting in H2 for the second milestone. And we should be able to do this in our H1 commentary for next year.
All right. Okay. Thanks a lot, and best wishes for the future.
Thank you.
Thank you, sir. The next question is on the line of Vinayak Kariwal from Xponent Tribe . Please go ahead.
Hi. Thank you for the opportunity, sir. I just remember Mr. Vishnu Malpani posting about the hiring of at least 1,000 workers for our new plants in the next three months. On the same post, I remember someone commenting that they hired 100 workers and that took them 12 months to hire. I just wanted to understand how is the aerospace and precision engineering workforce situation in the area where we are operating in, and what is the progress on that hiring?
Sure. I think a very good question. First of all, I think while you can manage everything else with capital, I think capability or recruitment or skill is something that will only be built over time, right? Azad Engineering recognizes that for us to be able to achieve these goals that we are setting for ourselves, these aggressive goals, we will need a very strong team to support this, right? That's why we're onboarding talent at every level, building the skill, training them to be future ready. Right? If you look at, I know you're referring to my post on LinkedIn where I said I want to recruit 1,000 people over the next.
The idea is that we do not want the business to be deprived of manpower, because the cost of having employees versus the cost of not having employees is disproportionately high in our business. We've built an execution engine today that we are able to source about 150 to 200 people per month. We have created a training center internally in a program where we are able to, in about 50 days, we're able to put a person on the training program and deploy them on the shop floor. We are running several engagement programs in the company which are interesting, which are helping us train, retain employees as well.
It's important, and I think, yeah, it's not an easy thing to be cracked, but then I think we've taken enough and more measures to solve the entire piece of human resource, and we are well in control given our targets for the next few years.
Sure. And sir, on the margins part, do you expect the margins to dip for the next FY, considering the fact that we are coming up with these factories and the utilization won't be up to the mark, which will only hit maximum utilization in FY 2028. So do you expect a margin dip for the next year?
Sir, I'll go back to, on every call we say we would want to maintain our guidance to be in the range of 33%-35%, but even this quarter, you can look at our EBITDA margin. It's been at 38%. I would want to still continue to guide 33%-35% EBITDA margins in our business for the longer term. But there are always positive shoots that we would want to bring to the market like we did this quarter. Fingers crossed.
Sure. And sir, last question on the requirement from the three gas turbine OEMs.
The data center compute is expected to get 3x every year for the next four to five years.
Right.
That is a similar requirement of power that the data center industry expects to be ramped up.
Right.
The front runners in the onsite power generation are these three OEMs, which you are the only qualified player in the country.
Right.
What are the conversations you are having with these OEMs in the kind of ramp-up they are expecting from you? What is the situation, if you could give us a broad view?
I think you have very correctly summarized this, that there is a lot of demand. The demand for electricity over the next about 15 years is going to double with what the world needs today. The only way you can power the world's demand for electricity is by putting up these gas turbines, nuclear turbines, steam turbines, and so on and so forth, right? This demand is being experienced by all of our OEMs aggressively, right? If you look at their order books, if you look at their order backlogs and how much orders are they taking quarter on quarter, there is a lot of pressure for them in delivery because data centers have presented this opportunity and this entire industry has changed structurally, right?
Our conversations are how quickly can we ramp up on the existing product line, how quickly can we move into adjacent product lines which are also critical, and ramp up, right? Azad is today holding with our existing 100% ramp-up, et cetera. We will still be doing a single-digit wallet share with our customers, right? This is going to grow, right? Giving you an example, if you look at how much aerospace, even at $700 million worth of scale that they are doing, they are still growing at 25% year-over-year, right? This year, they have delivered a 25% growth. This is a brilliant time to be in these industries, and we are constantly just looking at newer demand coming to us, newer capacity, and even the existing business is to be done over the next few years, right?
The backlog is constantly increasing for our customers, and that is just channeled to us directly. Like you said, since we are the only qualified partner in the country, and the only qualified partner, this demand, we will be a direct beneficiary of this. It is in Azad's best interest to sort of keep scaling up and improving our wallet share existing, and then also enter into newer product portfolios, which we have the opportunity today, right? These are low-hanging fruits for Azad to get into adjacent categories as well. We are also expanding, right? We are building capability. We do not talk about it in our earnings call as much, but there is a lot of capability development that we are doing that will only lead to revenues in the coming years, which is our long-term plan, right? We are entering into conversion from compressors.
Every aspect of a turbine, right from a compressor airfoils to really complex conversion parts also. For land, sea, and air turbines, we are building capabilities for gas, steam, and nuclear turbines, we are building capabilities. I think Azad is very beautifully present in terms of capabilities that we have and capabilities that we are building right now from our customers' perspective. These are some of the conversations.
Just for clarification, could we expect more than 40%-50% growth once you stabilize these factories with the three turbine OEMs for the next four to five years?
Demand is there, right? There is obviously a lot of demand. You see, our customers are signing. If you look at just the contract that we signed with Mitsubishi, we signed roughly a $100 million contract, $ 70 million to $ 80 million contract in phase one. It was immediately in about one and a half, less than a year, we were able to sign a phase two of the same contract of a similar value, right? The demand is obviously there, but our ability to execute these contracts depends on infrastructure, stabilization, all the things that Mr. Chopdar mentioned, right? All the new plants that we are building up, it is not just about building a factory, putting machines and starting, right? This industry does not have a very linear growth, right? All the other industries, this needs a lot of time.
You see in Azad's case also, 2008 to 2020, we did INR 100 crores. 2020 to 2026, we are talking about a number. This year we have delivered more than five times of what we were. Definitely the opportunity to grow is there, but it relies on Azad's ability to execute, take contracts, and execute at that scale. While you were asking me questions on how are we also doing on manpower. This is a complex project management, right? You will have to manage every aspect of the business while you are managing customer expectations, you are building infrastructure, you are ensuring that your current deliveries are not impacted. Also hiring, planning for the next year quarters. It is a very complex lesson. That is why while we still grow at 25%, we say that with absolute confidence, right?
That is why we believe that there is a definitive opportunity in the future to see this demand.
Thanks. Thank you so much. That is excellent. Thanks.
Thank you, sir. Ladies and gentlemen, to ask a question, please press star and one now. The next question is from the line of Kaushik Mohan from Ashika Group. Please go ahead.
Hi, sir. Sir, I just wanted to understand, with the missile engines that what we are trying to do, is those also numbers being considered in the growth rates that we are talking about?
No, sir. Thank you for your question. The number projections that we've spoken about, we've only spoken about the customers, what we have in hand today, and not something that we haven't, which is in the future. The engine development that we're doing is not a part of our revenue projections, if you're asking us. But this is a capability that we're developing.
What can be the market size, if it is possible to be told or anything? What is the market size and what can we capture over here?
I think the market is huge. You should be able to understand that these are strategic defense drones. This will be used in strategic defense, UAVs, and drones, et cetera. Single shot device. From that perspective, it will be used in anti-ship missiles, et cetera. This is the first strategic jet engine that will be made out of India. You should think about it. I will request Mr. Rakesh Chopdar to sort of give us a little more insight on this.
Your question is when we can know? Because in Azad Engineering, whatever we say or whatever we project, we project whatever is there in hand. What is confirmed and what we can deliver. Maybe in Q1. Q1, we can give you more good news on the engines. We can give you some projections. We can give you some revenues. Because as we have a practice, whatever is confirmed, whatever is there is in hand, we can definitely talk about it. This is a great moment for sure. The volumes can be substantial, as this engine is currently being imported by Government of India, and this is an import substitute. There is a massive pressure from the country to develop this engine, and we are on the same page with them, and we are putting all the efforts to develop this engine.
Hopefully, fingers crossed, we very soon will give you good news in Q1. We can talk more on the projections, we can talk on the revenues, we can talk on the numbers.
Got it. Sir, I just wanted to understand another thing. With the current order book that we have, the revenue growth rates that we are talking about will be sufficiently fulfilling its numbers.
Yeah.
I just wanted to understand what kind of growth rates that we can see in the current existing products and with the current existing clients. What will be the market share that we can increase over next three, four, or five years down the line?
The question is good, short, but the answer is very long to this. Can I invite you to Azad and I can show you? Because every customer has its own product line, every customer has their own design, and nothing is common within these customers. I have a very long answer for this. I would request you to please visit Azad so that I can show you more in detail.
Sure. Post this quarter, we will definitely come this.
Yeah, most welcome. Most welcome.
Thanks for this.
Thank you, sir. Ladies and gentlemen, in the interest of time, that was the last question for today. I would now like to hand the conference over to management for closing comments.
On behalf of Azad Engineering board of directors and shareholders, we would like to thank everyone for joining the call and listening to the performance updates of quarter three FY 2026. We are very happy to share that this was an excellent quarter, and we believe that we will be continuing the momentum and the guidance that we have shared with the market. Thank you.
Thank you, sir. On behalf of Azad Engineering Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.