Buy AIA Engineering; target of Rs 1788: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss' research report on AIA Engineering

We reiterate our positive stance on AIA Engineering (AIA) post our recent interaction with management led by: i) <15% penetration in mining market (addressable ~3mn MTPA) leading to 18-20% volume CAGR over FY18-20E; ii) high exposure to robust gold & copper mining segment (addressable ~1.2mn MTPA); iii) rising penetration in primary media (~40% of sales); and iv) enhanced R&D muscle via tie ups with research agencies.

Outlook

AIA is well equipped to leverage anticipated volume recovery with capacity in place (current utilization at 65% and 29% increase in capacity over next 2 years). We estimate AIA to clock 24% PAT CAGR over FY18-20 led by improving volume visibility. We maintain ‘BUY’ with TP of INR1,788 (28x FY20E EPS). At CMP, the stock trades at 26.6x FY19E and 22.2x FY20E.For all recommendations report, click here

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