CD Equisearch P Equities Derivatives Commoditie AIA Engineering Ltd. No. of shares (crore) 9.43 Mkt cap (Rs crs) 10639 Current price (FV. 2) 1137 Price target (Rs) 1355 52 week H/L (Rs.) 1238/494 Book Value (Rs.) 184 P/BV (FY15e/16e) 5.1/4.2 P/E (FY15e /16e) 27.2/23.6 BSE Code 532683 NSE Code AIAENG Bloomberg AIAE IN Daily volume (avg. weekly) 52743 Shareholding pattern % Promoters 61.65 MFs / Banks / FIs 7.07 Foreign 25.16 Govt. Holding 0.00 Non-Promoter Corp. 2.76 Total Public 3.35 Total 100.00 As on Dec 31,2014 Recommendation Buy Analyst Priyanka Somani Phone: + 91 (33) 3027 3043 E- mail: [email protected]Figures in Rs crs Income from operations Other income EBITDA (other income included) Net Profit EPS (F.V.2) EPS growth (%) Pvt Ltd es Distributio n of Mutual Funds Dis FY12 FY13 FY14 1416.67 1751.31 2080.08 13.27 21.32 33.41 286.57 331.56 535.56 180.46 210.82 324.97 19.13 22.35 34.45 -1.6 16.8 54.1 Company Background AIA Engineering is an ISO certified 9001 c design, development, manufacture, install chromium wear, corrosion and abrasion cement, mining and thermal power genera Highlights • AIA specializes in high chromium significant advantages over tradition are fast replacing the same. These prod sector and have a demand of at least 1. of which only 20% have been catered demand for high chrome mill internals 85-90 % of the total demand. • AIA is the de facto monopoly playe industry and a dominant worldwide p The company has managed this b advantage for itself in the service customers--high and consistent quality supplies, undertaking mill audits undertaking installation and continued well developed relationships with its c • Company expects to end the fiscal w tonnes in FY15 (as against 1.8 lakh ton lakh tonnes in FY16. The company cur Rs 450-500 crore. Capital Expenditure capacity augmentation to 4.4 lakh to execution in the light of rising dem mining space. • The stock currently trades at 27.2x FY16e earnings. We recommend ‘Buy based on 28x FY16e earnings within ne Jan 31,2015 stribution of Life Insurance FY15e FY16e 2180.00 2700.00 85.80 45.00 612.07 696.80 394.73 456.46 41.85 48.40 21.5 15.6 company that specializes in lation and servicing of high n resistant castings used in ation industries. mill internals that have nal forged components and ducts are used in the mining .2 million tonnes per annum d to. Moreover, replacement s is estimated to account for er in the domestic cement player in the mining sector. by creating a competitive es that it provides to its y of products, uninterrupted s, client specific design, d servicing and maintaining clients. with a volume of 2-2.1 lakh nnes in FY14) and about 2.6 rrently has an order book of e plans of Rs 600 crores for ones is at its final stages of mand (worldwide) from the FY15e earnings and 23.6x ’ with a target of Rs 1355 ext 9-12 months
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In the mining industry the company is predominantly foc
gold and copper with emphasis on the replacement market. The growth prospects are primarily emanating out of
the large annual replacement market in this industry. The addressable market opportunity re
estimated in the range of 1.5 to 2.0 million tons per annum. O
high chrome which implies the opportunity of conversion of the balance requirements into high chr
While the company began its foray into mining space with concentration on grinding media,
developed mining liners also.
Even within grinding media, AIA has developed certain specialized applications. Now
the only company in the world offering the complete range of m
media products as well as mining liners made out of chrome alloys.
augurs well for its consistent and steady growth in this industry ov
increased its market presence in the major mining groups across the g
mining centers like Australia, Africa, and North
The stock currently trades at 27.2x FY15e earnings and 23.6x FY16e ea
Rs 1355 based on 28x FY16e earnings within next
Disclaimer
This document is meant for our clients only and is not for publi
are not soliciting any action based upon it. This report is not to be construed as an offer to sell or the solicitation of an
jurisdiction where such an offer or solicitation would be illegal. The material is based upon information that we consider re
that it is accurate or complete, and it should not be relied upon as such. Neither CD Equisearch P
liability arising from the use of this document. The recipient of this material should rely on their own investigations and t
Opinions expressed are our current opinions as of the date appearing on this material only. While we endeavor to update on a reasonable basis the
information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so.
are cautioned that any forward-looking statements are not predictions and may be subject to change without notice. If you have any questions about this
report please get in touch with CD Equisearch Pvt. Ltd.
expects to further increase its market share in the mining space in FY16
as addition of new customers. In the cement market, the c
continue to focus on countries with high growth potential. In the utility market in India, there is a lot of optimism in
relation to the planned commissioning of coal fired thermal power stations in the country and the c
its strong presence in this market.
here are certain specific markets in Asia, Africa and South America that continue to add
and/or have increased capacity utilization. In China, AIA currently has a limited
products. China continues to remain a major market and the company will continue to invest
market share there. In India while new capacities were created the pace has
. Nevertheless India’s cement production has increased by around 8
has maintained a similar growth in the cement replacement market in
ompany is predominantly focused on four major metal ore types viz. iron, platinum,
opper with emphasis on the replacement market. The growth prospects are primarily emanating out of
the large annual replacement market in this industry. The addressable market opportunity re
to 2.0 million tons per annum. Out of this less than 20% requirement is converted into
high chrome which implies the opportunity of conversion of the balance requirements into high chr
its foray into mining space with concentration on grinding media,
has developed certain specialized applications. Now it
offering the complete range of mining high- chrome consumables including grinding
media products as well as mining liners made out of chrome alloys. This positioning is unique to the c
nd steady growth in this industry over the medium to long term. AIA
major mining groups across the globe with particularly strong focus on major
and North America etc.
The stock currently trades at 27.2x FY15e earnings and 23.6x FY16e earnings. We recommend ‘Buy
FY16e earnings within next 9- 12 months.
This document is meant for our clients only and is not for public distribution. This material is for the personal information of the authorized recipient, and we
are not soliciting any action based upon it. This report is not to be construed as an offer to sell or the solicitation of an
jurisdiction where such an offer or solicitation would be illegal. The material is based upon information that we consider re
that it is accurate or complete, and it should not be relied upon as such. Neither CD Equisearch Pvt. Ltd., nor any person connected with it, accepts any
liability arising from the use of this document. The recipient of this material should rely on their own investigations and t
ons as of the date appearing on this material only. While we endeavor to update on a reasonable basis the
information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so.
looking statements are not predictions and may be subject to change without notice. If you have any questions about this
new customers. In the cement market, the company will
continue to focus on countries with high growth potential. In the utility market in India, there is a lot of optimism in
tations in the country and the company will
here are certain specific markets in Asia, Africa and South America that continue to add
currently has a limited presence in form of a
ompany will continue to invest
. In India while new capacities were created the pace has
production has increased by around 8% to 10% in FY 2013-
in the cement replacement market in
our major metal ore types viz. iron, platinum,
opper with emphasis on the replacement market. The growth prospects are primarily emanating out of
the large annual replacement market in this industry. The addressable market opportunity relating to wear parts are
ut of this less than 20% requirement is converted into
high chrome which implies the opportunity of conversion of the balance requirements into high chrome products.
its foray into mining space with concentration on grinding media, it has now successfully
it is positioned as perhaps
hrome consumables including grinding
This positioning is unique to the company and
medium to long term. AIA has steadily
lobe with particularly strong focus on major
rnings. We recommend ‘Buy’ with a target of
c distribution. This material is for the personal information of the authorized recipient, and we
are not soliciting any action based upon it. This report is not to be construed as an offer to sell or the solicitation of an offer to buy any security in any
jurisdiction where such an offer or solicitation would be illegal. The material is based upon information that we consider reliable, but we do not represent
vt. Ltd., nor any person connected with it, accepts any
liability arising from the use of this document. The recipient of this material should rely on their own investigations and take their own professional advice.
ons as of the date appearing on this material only. While we endeavor to update on a reasonable basis the
information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. Prospective investors and others
looking statements are not predictions and may be subject to change without notice. If you have any questions about this