Add AIA Engineering, target price Rs 1,588: IIFL

IIFL has retained add rating on AIA Engineering with a target price of Rs 1,588. The stock ended down 0.88 per cent at Rs 1,475.40 on Thursday while the BSE Sensex closed 483.53 points up (+1.54 per cent) at 31,863.08.

AIA Engineering Ltd., incorporated in 1991, has a market cap of Rs 13916.03 crore.

Investment Rationale


AIA has not yet seen any major impact on offtake from miners, and healthy inventory should support volumes amid production disruptions, said IIFL. But as the slower demand growth begins impacting mining output, IIFL sees increasing risk to existing client offtake and new-client addition.

Financials

AIA Engineering's key products/revenue segments include Castings which contributed Rs 2737.17 crore to sales Value (96.46 per cent of total sales) and Export Incentives which contributed Rs 100.42 crore to sales Value (3.53 per cent of total sales)for the year ending March 31, 2019.

For the quarter ended December 31, 2019, the company reported consolidated sales of Rs 670.91 crore, down -0.80 per cent from last quarter sales of Rs 676.35 crore and down -4.18 per cent from last year same quarter sales of Rs 700.21 crore. The company reported net profit after tax of Rs 156.36 crore in the latest quarter.

Promoter/FII Holdings

Promoters held 58.47 per cent stake in the company as of March 2020, while FIIs held 21.34 per cent, DIIs 14.63 per cent and public & others 3.41 per cent.