Apr 08, 2010, 02.24 PM IST | Source: CNBC-TV18

Buy AIA Engineering: Satish Betadpur

Buy AIA Engineering, says Satish Betadpur, MD, IIR Group, PLC.

Buy AIA Engineering: Satish Betadpur

Buy AIA Engineering , says Satish Betadpur , MD, IIR Group, PLC.

Betadpur told CNBC-TV18, "AIA Engineering is a very interesting derivative play on cement, mining and power construction equipment; they produce consumables for all of these industries. They have a 90% market share in India for consumables in cement industry. Given that and cement is doing well especially volume growth in cement is very strong, these guys are going to benefit tremendously.

He further added, They also export overseas but the growth is in India at this point. All of that you are getting at a very reasonable valuations. If I look at earnings for next year, we are getting an EPS of Rs 24 and earnings growth is at 28-30%, so even if you give a PE multiple of Rs 20 which is at a significant discount to growth, we get a very decent price target for this stock going forward.

ROE in this company is very high upwards of 20%, EBITDA margins at 28%. So it is a very well run company in a space, which is very attractive and doing very well. I give it a very good medium term outlook and also on a day basis it should be doing well. Buy AIA Engg with target of Rs 419."

At 11:56 hrs the share was quoting at Rs 404.00, down Rs 0.45, or 0.11%. Yesterday the share closed up 0.19% or Rs 0.75 at Rs 404.45.

The company's trailing 12-month (TTM) EPS was at Rs 16.18 per share. The stock's price-to-earnings (P/E) ratio was 24.97. The latest book value of the company is Rs 68.78 per share. At current value, the price-to-book value of the company was 5.87. The dividend yield of the company was 0.62%.

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