This paper introduces the part of efforts to develop a derivative type turboshaft engine from an existing baseline engine for multi-purpose helicopters aiming at 4000 kg of take-off weight for 10-12 passengers. As a first step in meeting the development goal of increasing the output power from 720 hp to 840hp with minimum modification, a two stage axial compressor was redesigned to obtain the higher pressure ratio by removing the inlet guide vane and increasing the chord length. As a result, a two stage axial compressor was designed to facilitate a flow rate of 3.04 kg/s, a pressure ratio of 2.01 and an adiabatic efficiency of $85\%$. Its performance tests were carried out and verification of test results and redesign are under progress. Aerodynamic and structural analyses of the preliminary design are mainly described in this paper.