Ambit Capital maintains ‘sell’ rating on AIA Engineering, target price Rs 1,334

Ambit Capital has maintained a ‘sell’ rating on AIA Engineering in the long term with a target price of Rs 1334. Shares ended down 2.8% at Rs 1622 on Tuesday while the BSE Sensex closed 67.93 points down at 40,821.30.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 676.35 crore, down -5.24% from last quarter sales of Rs 713.74 crore and down -5.44 % from last year same quarter sales of Rs 715.28 crore. The company has reported net profit after tax of Rs 151.99 crore in the latest quarter.


The company’s top management includes Mr.Bhadresh K Shah, Mr.Dileep C Choksi, Mr.Rajan Harivallabhdas, Mr.Rajendra S Shah, Mr.Sanjay S Majmudar, Mr.Yashwant M Patel, Mrs.Bhumika S Shodhan, Mrs.Janaki Udayan Shah, Mrs.Khushali S Solanki. Company has B S R & Co. LLP as its auditors. As on 30-09-2019, the company has a total of 94,320,370 shares outstanding.

Investment Rationale

AIA Engineering would need another round of capacity expansion as current levels would suffice until FY24, said Ambit. Next leg of expansion would happen outside current locations which have maxed out, driving higher capital expenditure, said Ambit. AIA Engineering provides steady volume growth, stable margins and high Average post tax Return on Capital Employed but lower payout ratios, the brokerage said.