Anand Rathi has given Buy recommendation for AIA Engineering with a target price of Rs. 2283 in its research report issued on Aug 14, 2021
Anand Rathi’s research report on AIA Engineering
Higher realisations led to AIAE posting a better Q1 due to the pass-through of higher RM and freight costs. On the other hand, sales volumes (60,318 tons) were below our estimate, largely from lower mining volumes because of no exports to Canada. Also, travel restrictions continue to take a toll on marketing, leading to delayed customer additions and order bookings. From a long-term perspective, we expect AIAE to benefit from the lower penetration of high-chrome grinding media, its large global market-share and net-cash balance-sheet.
With lower-than-expected sales volume, we trim our volume estimate but raise our realization estimate based on higher costs being passed on. With this, and the recent fall in stock price, we upgrade our rating to a Buy with a higher TP Rs2,283.