In the 1QFY2025, the group secured around $4.5 billion worth of new contracts, with the commercial aerospace (CA) segment sercuring $1.3 billion in maintenance, repair and overhaul (MRO) and systems contracts, which included LEAP engine maintenance and Boeing 787 services.
“The segment also continued to see healthy orders for engine nacelles and composite floor panels, underpinned by increasing new aircraft production,” adds Jaiswal.
The defence and public security (DPS) segment secured $2.7 billion, with notable wins in AI, cybersecurity, and defence electronics, while the land systems business received new orders for 40 millimetre (mm) and 155 mm ammunition from international customers.
Lastly, the urban solutions and Satcom (USS) segment added $500 million thanks to the winning of smart mobility, tolling, and satellite communications contracts across key global markets.
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Meanwhile, Elbe Flugzeugwerke (EFW), a joint-venture (JV) between ST Engineering and Airbus, has partnered with Confity Capital Partners to supply multiple Airbus A330 passenger-to-freighter (P2F) aircraft to India.
The first conversions will begin in late 2025, with Mumbai-based Jet Freight Logistics as the launch customer.
Jasiwal sees that the move supports rising demand driven by e-commerce, exports, and infrastructure growth in India and other emerging markets.
Presently, the analyst’s FY2029 estimates remain below the group’s projections of 8.6% revenue compound annual growth rate (CAGR) and up to 13.6% profit CAGR for the FY2024 to FY2029 period.
He sees potential upside risks from stronger-than-expected international defence business performance, the transition of its aviation asset management business to a fund structure and finally, potential merger and acquisitions (M&A).
Conversely, key risks include a slower revival in the commercial aerospace sector, lower margins from higher costs caused by supply chain issues, order book delivery delays and lastly, lower-than-expected contribution from acquisitions.
As at 2.49 pm, shares in ST Engineering are trading 9 cents higher 1.20% up at $7.58.
