AIA Engineering Ltd. share price target

Q3 sales at Rs 5.7 bn (-6% YoY) was below estimate on lower-than-expected sales volume of 51.4K MT but better realization at Rs 111K/MT on product mix and price pass-through. Core EBITDA margin was at 22% (in guided range) given sharp appreciation in input prices/currency and efforts to gain share.

Maintain NEUTRAL with a revised TP of Rs 1,597 (25x Dec-19 EPS). AIA Engineering (AIAE) posted an EBITDA of Rs 1.27bn (-26.6/12.9% YoY/QoQ, Est Rs 1.30bn). EBITDA margins expanded 207bps QoQ to 22.2%, even though other expenses were higher (Rs 2.10bn, 7.8/3.7% YoY/QoQ) led by costlier power purchases. Realisations expanded leading gross spreads to escalate to 60.8% ((458)/157 bps YoY/QoQ). Volume commentary implies softer, back ended volume growth in the mining segment.

AIA Engineering volume de-grew by 9.3% while realisation grew by 6.9% in Q3FY18, however, adjusted EPS was lower by ~ 20% in Q3FY18 due to higher raw material prices. We expect earnings to remain muted in FY18E; going forward the impact of volatile prices could dissipate and lead to stable state margin profilein FY19E & FY20E.

ICICI Securities Ltd | Retail Equity Research AIA Engineering reported disappointing set of Q3FY18 results. The disappointment was in terms of decline in volumes of consumables sold. Revenues declined by 3% YoY to |572.2 crore vs. our estimate of |615 crore. Volumes for Q3FY18 declined by 9.6% YoY to 51392 tonnes vs estimates of 60804 tonnes. On a segmental basis, mining and others segment declined by 9.8% and 9.3% YoY to 32346 and 19046 tonnes respectively. Realisations were up by 7.3% YoY to...

AIA Engineering Ltd (AIAE), on a consolidated basis, for Q2FY18 reported weak numbers. Higher raw material prices, currency volatility and pricing strategy to acquire new clients led to margin contraction by 1,001bps YoY to 20.1%. Revenue grew by ~6% to 559 crore, on the back of volume growth of 5% to 54,573 tonne. Net profit declined by 23% to 87 crore. Net realisations stood at 99,489 per tonne (up 0.4% YoY, down 0.2% QoQ), impacted by new client additions and change in product mix. At present AIAE's net cash position stands at 1,119 crore. Management Guidance: The management has revised downwards the sales...

Downgrade to Neutral with a TP of Rs 1,497 (25x Sep-19 EPS). AIA Engineering (AIAE) posted weak numbers (EBITDA: Rs 1.12bn, (29.5)/(13.4)% YoY/QoQ, Est Rs 1.43bn). The miss was driven by a) Weaker volumes (54.5kT, 5.0% YoY, Est 57.8kT) and b) Higher other expenses (Rs2.03bn, 3.1/(10.6)% YoY/QoQ) led by costlier power purchases. RM costs moderated on expected lines (Gross spreads: 59.2%, (314)/171 bps YoY/QoQ), led by softer FeCr prices. Volume commentary implies softer, back ended volume growth in the mining segment.

Volume growth at 10.8% in H1FY18; volume guidance revised: Volumesfor AIA grew by 10.8% to 1,10,253mt on YoY basis in H1FY18 and the same for Q2FY18 were higher by 5.0% and volumes reached 54,573mt. In terms of user segments, Mining and Non-mining segment volumes grew by 11.6% and 9.5% on YoY basis to 68,100mt and 42,153mt respectively during H1FY18.

Revenues declined 5.3% YoY to | 542.9 crore vs. our estimate of | 583.5 crore. Volumes for Q2FY18 grew 5% YoY to 54573 tonnes vs. estimate of 58938 tonnes. On a segmental basis, mining and others segment grew 6.8% and 2.2% YoY to 34017 and 20556 tonnes, respectively. Realisations were down 2% YoY to | 99489/tonne Absolute EBITDA came in at | 112 crore, which were below our estimates of | 132 crore. EBITDA margins came in at 20.1% vs. estimate of 22%. Impact on margins is on account of penetrative...

AIA posted lower-than-expected volumes of 56K MT (our estimate: 60K MT) in Q1FY18 resulting in net sales of Rs 5.7 bn (+19% YoY), below the estimates. EBITDA margin declined for third quarter in a row

Revenue decreased by 8.87% to Rs. 554.84 Cr in Q1FY18 when compared to the previous quarter Revenue decreased by 8.87% to Rs. 554.84 Cr in Q1FY18 when compared to the previous quarter