ICICI Direct has given Buy recommendation for AIA Engineering with a target price of Rs. 2200 in its research report issued on May 26, 2021

ICICI Direct’s research report on AIA Engineering

AIA Engineering reported consolidated revenues at Rs 860.2 crore (in line with our estimate of Rs 859.6 crore), up marginally by 0.4% YoY owing to decline of 3.3% in volumes YoY. Realisations grew 6% to Rs 107.1/kg YoY. EBITDA came in at Rs 169.2 crore, down 8.4% YoY (vs. our estimate of Rs 190.8 crore). EBITDA margins fell 190 bps YoY to 19.7% (below our estimate of 22.2%) impacted by commodity prices. PAT came in at Rs 133.1 crore (below our estimate of Rs 158.6 crore), declining 6.5% YoY partly impacted by lower other income, which declined 20.4% YoY to Rs 23.2 crore.

Outlook

We expect overall revenues, EBITDA to grow at 6.5%, 6.2%, respectively, in FY20-23E. We revise our target price to Rs 2200/ share (earlier Rs 2350), 31x FY23E EPS and maintain our BUY rating.

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