We initiate coverage on AIA Engineering ltd with a “BUY” recommendation and a target price of Rs 5,106/- per share. AIAE currently trades at 31X its EV/EBITDA Multiple. The company holds a strong position in a duopoly market, thereby commanding a premium. We value the firm by applying a 28X EV/EBITDA multiple to the EBITDA for year ended FY26E. We estimate value at Rs 5,106 per share. Our recommendation is primarily based on: 1) High chrome media offers opportunities for growth. 2) Mill Liners to enhances AIAE’s value proposition. 3) Technical collaborations provide designing expertise.
OutlookWe value the firm by assigning a 28X EV/EBITDA multiple to the EBITDA for year ended FY26E. We estimate value at Rs 5,106/- per share.
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