Axis Direct Assigns Buy Rating with Rs 595 Target Price

Brokerage sets target of Rs 595 per share with an estimated 10% upside potential.
Company reports record order book of Rs 9,217 crore as of June 2026.

Reader Takeaway: Strong order visibility and capacity expansion drive the Buy case, countered by export-related geopolitical delivery delays.

What just happened

Axis Direct has released a research note on the company, assigning a 'Buy' recommendation. The brokerage projects a target price of Rs 595, reflecting optimism about the firm’s ability to scale operations amid a massive Rs 35,000 crore bidding pipeline.

Why this matters

The company’s order book has reached a record high of Rs 9,217 crore, marking an 8.4% increase over the previous quarter. This growth is underpinned by a well-diversified portfolio, dominated by domestic Transmission and Distribution (T&D) projects, which account for 80% of the backlog.

Capacity and Operations

The company is nearing the completion of a 75,000 MTPA capacity expansion, expected to be commissioned by the end of Q2FY27. This brings the total manufacturing capacity to 450,000 MTPA. While the long-term expansion to 600,000 MTPA has been pushed back to FY29, the immediate addition is expected to support a targeted 15% revenue growth for the current fiscal year.

Risks to watch

Export performance saw a 50% year-on-year decline in Q1FY27, falling to Rs 162 crore due to geopolitical issues in West Asia. Investors should monitor how effectively the company manages these international shipments and whether the entry into developed markets like the USA and Australia can offset current regional instability.

Context Metrics

• FY27 Net Sales Estimate: Rs 6,386 Cr
• FY27 EPS Estimate: Rs 23.6
• FY27 PAT Growth Guidance: ~30%

What to track next

The market will be watching for the successful commissioning of the new capacity in Q2FY27 and subsequent commercial ramp-up in Q3FY27, alongside the management’s ability to execute Rs 5,000 crore of its backlog during the year.