Accumulate AIA Engineering; target of Rs 4909: Asit C Mehta

Asit C Mehta report on AIA Engineering

AIA Engineering Limited (AIA) was incorporated in 1991, is a distinguished entity in the design, development, production, installation, and servicing of high chromium wear, corrosion, and abrasion resistant castings. These superior products specifically serve the cement, mining, and thermal power-generating industries, highlighting the Company’s capacity to cater to diverse market demands. The company engages with a customer over 18 to 24 months to develop a mine site by doing trials and establishing optimal chrome grade for that set of operating conditions. Because of these benefits company is expect high chrome to take higher market share forged over a time. The business covers most important geographies including North America, Latin America, Australia and Brazil. The company continues to acquire new customers in these geographies. The installed capacity of company is 4,40,000 TPA that will rise further to 5,20,000 TPA by March, 2025. It has 4 manufacturing facilities i.e. Ahmedabad (Grinding media), Nagpur (Centrifugal castings), Bengaluru (Grinding media) and Trichy (Grinding media).

Outlook

We recommend an “Accumulate” rating with a target price of Rs 4909, reflecting a potential upside of 33% based on a PE multiple of 28X to FY26E EPS of Rs 175.35.