AIA Engineering - Q2FY21 First Cut - ICICI Securities

(CMP: Rs. 1663; MCap: Rs. 15,685 crore)

AIA Engineering reported an overall strong set of numbers for Q2FY21. Revenues came in above expectation on the back of higher than expected volume growth in the mining segment while EBITDA margin improved to 25.6% on the back of better gross margins led by revival of business activities in key sectors.

Q2FY21 Earnings Summary

- AIA Engineering reported consolidated revenues at Rs. 742.3 crore (above our estimate of Rs. 649.9 crore) which grew by 6.6% on YoY basis owing to revival in economic activities in domestic and international markets

- EBITDA came in at Rs. 190.3 crore, up 23.5% on YoY basis (vs our estimates of Rs. 139.7 crore). EBITDA margins expanded by 350bps on YoY to 25.6% (above our estimate of 21.5%) on account of improvement of 600 bps in gross margins to 66% on YoY basis

- AIA reported PAT at Rs. 143.5 crore (above our estimate of Rs. 119.7 crore) which declined by 5.6%, YoY owing to tax adjustment in base quarter, lower other income and exceptional item of Rs. 3.7 crore as impairment towards closure of its subsidiary, Welcast Steels Ltd (WSL). Other income declined by 11.8% to Rs. 24.8 crore on YoY basis

- Sales volume came in robust at 68575 MT in Q2FY21, which grew by 12% YoY led by mining segment volumes which grew by 15.8% to 46750 MT. While, cement & others segment volumes came in at 21825 MT, up by 4.6%, YoY

AIA delivered revenues above our estimate owing to strong mining volumes and gross margins improvement despite a challenging business environment.

We would be coming out with a detailed report post conference call.

Shares of AIA ENGINEERING LTD. was last trading in BSE at Rs.1663 as compared to the previous close of Rs. 1699.5. The total number of shares traded during the day was 2663 in over 1049 trades.

The stock hit an intraday high of Rs. 1701.8 and intraday low of 1621.5. The net turnover during the day was Rs. 4388960.

Source : Equity Bulls

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