Nomura downgrades AIA Engineering to neutral, lowers target price to Rs 1,895

Nomura has downgraded AIA Engineering to neutral from buy in the long term and lowered target price to Rs 1,895 from Rs 1,970. The stock ended down 3.2% at Rs 1,641 on Thursday while the BSE Sensex closed 170.42 points up at 40,286.48.

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. T


Investment Rationale

The management has cut its volume guidance and attributed it to uncertain outlook perceived by miners, said Nomura. The brokerage has turned cautious on the stock as clarity is yet to emerge on the duration of the mining slowdown. Nomura has cut operating profit estimates for FY21 and FY22 by 17-19% but has cut EPS estimates by only 7-8% on lower tax rates.