Buy AIA Engineering; target of Rs 3970: LKP Research

About this update from Aia Engineering Limited

LKP Research's research report on AIA EngineeringAIAE reported revenue of ₹11.6 bn, a moderate growth of 0.6% YoY. AIAE’s volume were 68,741/ 255,443 MT in Q4/ FY25, declining by 3.8%/14% YoY respectively. The drop was primarily due to inventory corrections by key customers, logistics disruptions, and delayed new conversions, while one rare customer loss to competition due to the duty-related uncertainty, hence impacting volumes. Slower ramp-up in the mining liner segment and regional trade uncertainties further weighed on overall growth momentum. Realizations improved by 4.3%/3.1% YoY to ₹168 per kg in Q4/ FY25. Despite multiple duties and tariffs, including a 9.6% dumping duty and other tariffs, the US business remains stable, with customers currently absorbing the additional costs. Management expects more clarity on US trade policies in the coming quarters, while the recent termination of Brazil’s 12% dumping duty supports its fair pricing stance and offers a positive outlook in that market. Due to global volatility, management has refrained from providing volume growth guidance for FY26, though it continues to aim for a potential 25,000–30,000 MT annual addition based on the revised FY25 base. AIAE remains focused on securing new mine conversions and large contracts, with a potential breakthrough in Chile seen as a major opportunity—though management remains cautious, given past nearmisses in the region.OutlookGiven the challenges leading to decline in volumes, we have cut down out estimates for EPS in FY26 & FY27 but continue to maintain our BUY rating on the stock with a TP of ₹3,970, based on a 30x multiple of FY27E EPS.For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.AIA Engineering - 27052025 - lkp

View stock analysis, news, and events for Aia Engineering Limited