SHAREHOLDING PATTERN (%)
STOCK PERFORMANCE (%)
STOCK PRICE PERFORMANCE
Book Value per share
Eq Shares O/S (F.V. Rs.2)
Median Vol (12 mths)
52 Week High/Low
AIA ENGINEERING LTD.
Q2 FY 2009 update
Sector Engineering I CMP Rs 196 I Target Rs 235
AIA Engineering Ltd’s (AIA) Q2FY09 results were above
expectations as net sales grew by 77% to Rs2.9bn and net
profits rose by 63% to Rs444mn. OPM expanded 110bps to
23.5% due to higher realisations and richer product mix.
z Volume and realisations drive growth
AIA’s net revenues surged by 77% YoY to Rs2.9bn on back of a robust
30% increase in volumes to 27k MT and a 36% growth in realisations to
z OPM fuelled by cost savings and better product mix
A richer product mix, ramp up of new facilities and benefit of rupee
depreciation led to OPM expanding by 110bps to 23.5%. As a result,
operating profits surged 86% to Rs673mn.
z Net profit growth muted due to lower other income
Hedging losses impacted other income by 66% to Rs21mn, negating the
impact of higher OPM. Thus, net profits grew by 63% to Rs444mn.
z Gaining traction in mining segment
After successfully concluding various tests with global mining majors in
the last couple of quarters, AIA booked firm orders of Rs400mn from
the segment. This marks an entry into a nascent but lucrative segment
for the company.
VALUATIONS AND RECOMMENDATION
At the CMP of Rs196, AIA trades at a P/E of 8.3x and EV/EBITDA of 5.1x
FY10 estimates. AIA is well entrenched as a domestic market leader
and second largest globally in cement internals and grinding media. It
has also forayed into the lucrative global mining segment. AIA has
consistently proven its market leadership by mai