ICICI Direct's research report on AIA Engineering
AIA has already commissioned Phase 1 of the capex programme, which has taken the capacity to 340000 tonnes. Phase 2 is likely to get commissioned in Q3FY18, which will add incremental 1000000 tonnes and take total capacity to 440000 tonnes by FY18E. The capex of Phase 2 is pegged at Rs 350 crore out of which Rs 170 crore will be spent in FY17E.
Outlook
Given, AIA is on the verge of becoming the largest HCMI player globally, the company is making strides in the right direction. A strong market position, pristine balance sheet and a management with foresight make it a portfolio stock. We further upgrade our target price to Rs 1562/share (30xFY18E EPS) and maintain BUY recommendation.
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