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You are here : IndiaNotes >> Research & Analysis >> Companies >> AIA Engineering Ltd. >> Research

SMC recommend AIA Engineering for a short-term perspective

SMC | 15 Dec, 2016  | Follow Author | Add to my Favourites 
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The management of the company expects decent volume growth in coming fiscal year. The confidence for volume growth for current fiscal comes from happening of new opportunities. Developmental activities of new mines in several key locations in full swing. The company targets an incremental volume growth of 120000 MT over next 3 years. Greenfield expansion at GIDC Kerala, Phase II that envisage a capacity addition of 100000 TPA taking the total installed capacity of the company to 440000 TPA is expected to be commissioned by Oct 2017. The total capex cost is Rs 350 crore.

 


 

BUSINESS PROFILE

 


 

AIA Engineering specialises in the design, development, manufacture, installation and servicing of high chromium wear, corrosion and abrasion resistant castings used in the cement, mining and thermal power generation industries.

 


 

INVESTMENT RATIONALE

 

 

 

During Q2Fy17, it has reported 8% fall in its consolidated revenue to Rs 500.45 crore for the quarter ended June 2016. However aided by 220 bps expansion in operating profit margin and lower tax incidence the de-growth at net profit (after minority interest) was restricted at 1% to Rs 108.99 crore. Spurred by higher other comprehensive income of Rs 6.32 crore for the quarter compared to mere Rs 0.19 crore in the corresponding previous period, the total comprehensive income was up by 4% to Rs 115.32 crore.

 


It has two project GIDC Kerala Greenfield Phase-I and Trichy Brownfield which would lead to increase the production capacity of the company and for this it has already set the capex of Rs.350 crore.

 


 

For the first time, the company is marking its presence into china for VSMS high chrome mill internal parts and expected to move further for good growth.

 

 

 

TECHNICAL TRENDS

 


We recommend a buy in the stock of AIA ENGINEERING for a short-term perspective. The stock is trading at its good support level with good fundamental records and is expected to move up from this level. It made a 52 week low Rs700.00 and 52 week high of Rs 1355.00. Buy around at 1288 with a closing below stop loss of Rs.1210 levels for the target of Rs.1430. We recommend a buy in the stock of AIA ENGINEERING for a shortterm perspective. The stock is trading at its good support level with good fundamental records and is expected to move up from this level. It made a 52 week low Rs700.00 and 52 week high of Rs 1355.00. Buy around at 1288 with a closing below stop loss of Rs.1210 levels for the target of Rs.1430.



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About SMC
SMC Research, founded in 1990, is India’s leading share and stock broker, provides a wide range of financial services and investment solutions. A blend of extensive experience, diverse talent and client focus has made us the 4th largest broking house in India(Source: Dun and Bradstreet, 2008). Over the years, SMC has expanded its operations domestically as well as internationally. Existing network includes regional offices at Mumbai, Kolkata, Chennai, Cochin, Ahmedabad, Jaipur, Hyderabad, Bangalore plus a growing network of 2100+ offices spread across 425 cities/towns in India.


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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.



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