AIA Engineering Ltd. share price target

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.

Q4 revenue down 9.7% YoY with gross margin expanding 160bps and EBITDA margin 220bps

AIAE: Soft quarter, volume growth uncertain; cut to HOLD. BOB Essential Commodities Index: How prices look in Jan'24. SYRMA: Margin slide continues; retain HOLD. BRIT: Faster volume growth to boost profitability

AIA Engineering (AIAE) reported strong Q1FY24 earnings with EBITDA up 39% YoY to INR 3.4bn. This was led by 9.1% YoY/5% YoY growth in volumes/realisations and 480bps YoY EBITDA margin improvement to 27.7%. Sharp improvement in EBITDA margin was on favourable product mix and decline in other expenses.

AIA Engineering (AIAE) reported a resilient set of numbers with EBITDA up 40% YoY to Rs3.2bn. This was led by 3% YoY / 12.2% YoY growth in volumes / realisation and 420bps YoY improvement in EBITDA margin to 23%. However, sequentially realisation declined slightly by 2% (lower than our estimates and company guidance).

Q4 EBITDA margin expands to 24.8% on a better revenue mix; stronger margin coupled with higher other income aids a beat on PAT

AIA Engineering (AIAE) has reported an outstanding performance in Q3FY23 with revenue, EBITDA and PAT coming in at Rs12.2bn, Rs3.6bn and Rs3.5bn (+45%, +127% and +155% YoY), respectively.

Strong all-round beat; Q3 EBITDA margin boosted to 29.8% by a better mix and one-offs, with 20-22% levels seen as sustainable

AIA Engineering (AIAE) is on track to deliver ~30,000te incremental volumes (in line
with management guidance) each year in FY23 and FY24, led by steady demand, likely
gradual easing of logistics issues and capacity expansion.

AIA Engineering (AIAE) is on track to deliver ~30,000te incremental volumes (in line
with management guidance) each year in FY23 and FY24, led by steady demand, likely
gradual easing of logistics issues and capacity expansion.

AIA Engineering’s (AIAE) consolidated revenues, EBITDA and PAT came in at Rs10.8bn, Rs2.5bn and Rs1.9bn (+46%, +44% and +28% YoY), respectively.