Q3FY21 Result Update - AIA Engineering - ICICI Direct

AIA Engineering reported consolidated revenues at Rs. 698.7 crore (below our estimate of Rs. 765 crore), merely up 0.7% YoY owing to lower realisation YoY, which declined 5.3% to Rs. 105.4 per kg. EBITDA came in at Rs. 172.3 crore, almost flat YoY (vs. our estimate of Rs. 169 crore). EBITDA margins declined marginally by 20 bps YoY to 24.7% (above our estimate of 22.1%). PAT came in at Rs. 156.1 crore (above our estimate of Rs. 125.5 crore), down marginally by 0.2%, YoY owing to tax adjustment in base quarter, higher other income and adjusting for reversal of exceptional item of Rs. 3.7 crore towards closure of its subsidiary, Welcast Steels (WSL). Other income grew 7.5% to Rs. 49.4 crore on a YoY basis.

Valuation & Outlook

Despite challenging conditions, AIA reported reasonable volumes in Q3FY21. However, new customer engagement and acquisition are expected to pick-up as the travel situation is expected to normalise in H1FY22 and will allow AIA to gain incremental volume growth in coming years while gradual volume ramp-up with repeat customers would aid medium term growth. AIA's strong balance sheet, decent cash balance and efficient working capital management are expected to support long term growth. We introduce FY23E and expect overall revenues, EBITDA to grow at 8.3%, 8.1%, respectively, in FY20-23E. We revise our target price to Rs. 2350/ share (earlier Rs. 1785), 32x FY23E EPS. We change our rating from HOLD to BUY.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_AIAEng_Q3FY21.pdf

Shares of AIA ENGINEERING LTD. was last trading in BSE at Rs.1956.45 as compared to the previous close of Rs. 1948.1. The total number of shares traded during the day was 1290 in over 233 trades.

The stock hit an intraday high of Rs. 1978.45 and intraday low of 1935. The net turnover during the day was Rs. 2519183.

Source : Equity Bulls

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