Buy AIA Engineering; target of Rs 1890: ICICI Securities

ICICI Securities research report on AIA Engineering

AIA Engineering (AIAE) has reported healthy execution in Q4FY20, supporting the overall earnings and cashflows. Current operations have reached ~75% of preCovid-19 levels and the management is confident regarding normalisation of demand. Though the new client development has taken a back seat due to travel ban, it is likely to pick up once travel situation normalises. Factoring in betterthan-expected execution and relatively quicker recovery in production, we raise FY21E and FY22E earnings by 12.3% and 11.8%, respectively.

Outlook

Given the medium to long-term growth drivers and continuation of mill liner capex plans, we maintain BUY with a revised target price of Rs1,890 (previously: Rs1,521).

AIA Engineering 24062020-ics