February 22, 2017 / 16:25 IST
AIA Engineering (AIAE) delivered strong mining volume growth yet again (35.8 kT, 48.8% YoY), even as other segments (Cement, Power) chugged along (21.0 kT, 4.2% YoY). The volume growth ensured margins did not suffer (29.3%, -82 bps YoY, -83 bps QoQ) despite flattish realisations (Rs 100,890, -7.1% YoY, 1.9% QoQ) and a sharp surge in RM costs (up 3.6/21.6% YoY/QoQ on a per tonne basis).
Outlook
Along with Magotteuax, it is a key beneficiary of the increasing adoption of cast high chrome grinding media by the mining industry. Its upcoming expansion (+100 kt by October 2017) will make it the largest producer of HC grinding media outside China. Maintain BUY with a TP of Rs 1,571 (25.0x FY19 P/E).
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