Azad Engineering (AZAD.BO): Delivery of the first ATGG engine to DRDO- A significant milestone; Maintain Buy

Research evidence excerpt

Azad Engineering (AZAD.BO): Delivery of the first ATGG engine to DRDO- A significant milestone; Maintain Buy

Equity Research

22 July 2026 | 7:55PM IST

Azad Engineering (AZAD.BO): Delivery of the first ATGG engine to

DRDO- A significant milestone; Maintain Buy

Azad Engineering (Azad) has delivered its first Expendable Indigenous Advanced Amit Dixit

+91(22)6616-9008 | amit.dixit@gs.com

Turbo Gas Generator (ATGG) Engine to DRDO, marking a significant milestone in the Goldman Sachs India SPL

company’s journey from precision components supplier to a propulsion system Kumari Rishika

supplier. Recently, the company executed a Long Term Contract & Price Agreement +91(22)6616-9154rishika.x.singh@gs.com|

(LTCPA) with Mitsubishi Heavy Industries (MHI) for supply of hot-section Nozzle Vane Goldman Sachs India SPL

segments of gas turbine engines. In our view, both these developments firmly

establish Azad’s capabilities and credentials in the Engine ecosystem. We maintain

Buy rating on Azad Engineering with an unchanged TP of INR 2,460/sh.

Delivery within 2 years and 100% indigenous components

Azad was selected as the sole Design-Cum-Production Partner (DCPP) and

single-source industry partner by the Gas Turbine Research Establishment (GTRE), a

DRDO arm, for the development of Advanced Turbo Gas Generator (ATGG) engine in

May’24. In a little more than 2 years, the company has delivered the first ATGG to

DRDO for testing. As a next step, the engine will be tested by DRDO for air

worthiness on the weapon. Per management, the company is likely to deliver 20

engines in next 12-15 months. Per the company, the engine has 100% indigenous

components, including the critical hot section parts supplied by Defense

Metallurgical Research Laboratory (DMRL) of DRDO. This development positions