Buy AIA Engineering: target of Rs 2043: ICICI Securities

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ICICI Securities research report on AIA Engineering

AIA Engineering (AIAE) is one of the few domestic companies that recouped quickly with relaxation of the Covid-induced lockdown. Global mining market leadership in high-chrome mill internals has been a key focus area for the company. To tap into the price competitive iron ore market, the company is embarking on transformation as a total mill solutions provider with mill lining capability. Factoring-in the capping of export incentives under MEIS at Rs20mn for Q3FY21, we cut FY21E earnings marginally by 0.2%, however, expecting healthy growth recovery, we raise FY22E earnings by 8%.

Outlook

Given the medium- to long-term growth drivers and continuation of mill liner capex plans despite the Covid-related slowdown, we maintain BUY on the stock with a revised target price of Rs2,043 (previously: Rs1,890).

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