Accumulate AIA Engineering; target of Rs 2089: CD Equisearch

CD Equisearch's research report on AIA Engineering

AIA Engineering is engaged in designing, development and manufacturing of grinding media, liners, diaphragms and vertical mill parts which finds application in grinding and crushing operations in mining, cement and thermal power generation. With easing of some travel restrictions and lifting of consumer sentiment, AIA Engineering saw improvement in volumes which grew by 14.5% to 69064 tons in Q2 when compared 60318 tons in Q1; though yoy growth flat lined (growth a shade under 1%). Mining business accounted for much of this rise (up +30.7%) while other businesses slackened. Propelled by price hikes - accentuated by high raw material prices - revenues grew by 19.2% to Rs 885.17 crs in Q2 compared to Rs 742.32 crs in the same quarter a year ago.

Outlook

Weighing odds, we assign accumulate rating on the stock with revise target of Rs 2089 (previous target: Rs 2295) based on 30x FY23e earnings over a period of 6-9 months. For more info refer to our March report.