Please refer to important disclosures at the end of this report
1
AIA Engineering (AIA) is a niche player in the value-added, impact abrasion, and
corrosion resistant high chrome metallurgy segment with current capacity o
f
340,000mtpa. It manufactures products like grinding media, liners, diaphragms,
and vertical mill parts in high chrome metallurgy. AIA’s Q3FY17 was the best-
ever quarter in terms of sales volume. Management is targeting incremental
volume growth of 120,000MT over next 3 years (i.e., an addition of 40,000MT
every year). Volumes growth is expected to continue to grow strongly in Q4FY17
and AIA has guided for 210,000tonnes for FY17E. Growth is expected to be
driven by mining segment, which is expected to close the year at 130,000MT,
while cement and utilities are expected to remain flat for the year. According to
management, supplies of high chrome mill internals to Indian thermal powe
r
plants may pick up if the user industry picks up. Order book as on Dec 31, 2016
stood at `610cr (Sept 30, 2016 at `840cr). Management expects realisation to
stabilise at these levels, i.e. at around `100,000/MT. Realisations are unlikely to
go up going forward. The company has been maintaining a healthy dividend
payout of 25.61% (Div Yield: 1.23%). The company has reported a healthy profit
growth of 25% CAGR and return on equity of 21% in the last 3 years. Hence Buy.
BUY
CMP `1,465
Stock Info
Sector
Beta
Bloomberg Code
Shareholding Pattern (%)
Promoters 61.7
MF / Banks / Indian Fls 7.3
FII / NRIs / OCBs 29.0
Indian Public / Others 2.1
Abs. (%) 3m 1yr 3yr
Sensex 8.2 17.6 32.0
AIA Engineering 13.9 76.8 158.0
.
0.3
Reuters Code AIAE.BO
AIAE@IN
2
BSE Sensex 28,946
Nifty 8,935
Face Value (
`
)
Steel
Market Cap (
`
cr) 13,817
52 Week High / Low 1570/802
Avg. Daily Volume 6,470
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
A
IA Engineering
Others | Steel
March 14, 2017
AIA Engineering | Steel
March 14, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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offering of securities of the company covered by Analyst during the past twelve months.
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Disclosure of Interest Statement AIA Engineering
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
(
-5% to -15%
)
Sell
< -15
)