Hold AIA Engineering; target of Rs 2002: Edelweiss Securities

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Edelweiss Securities' report on AIA Engineering

We recently interacted with Mr. Kunal Shah, Executive Director at ss(AIAE). Key highlights: i) Volume loss owing to competition concerns in Canada and South Africa would be mitigated by other geographies. ii) Gold and copper remain a big part of the strategy with further potential improvement in demand. iii) Mill liners’ capacity is expected to be commissioned by end-FY22 and ramp up over FY23. Recouping of volumes is likely to remain gradual as shipping costs remain elevated.

Outlook

While volume loss due to duties remains exacerbated over the near term, recoup could be stretched as volume conversion takes time. Maintain ‘HOLD’ with a TP of INR2,002, valuing the stock at 30x FY23E EPS, at the average of last three years.

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