Target: ₹4,015

CMP: ₹3,510.90

AIA Engineering (AIAE) offers a sizeable play on the global mining consumables space with a global market share of about 7 per cent in grinding media for gold, copper and iron ore and about 35 per cent for cement (ex-China basis).

Strength of AIAE’s product offerings is apparent in its robust financial metrics of growth, margins, cash flows and ROIC. A low penetration level of 20-25 per cent of high chrome grinding media (key product offering of AIAE) and foray into metallic mill liners provides headroom to outperform the 6 per cent growth outlook for the global mineral processing industry.

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We estimate a relatively moderate EPS CAGR of 8 per cent over FY23-26 for AIAE (10 per cent over FY24-26) as FY24 EBITDA margins would likely revert to historical levels of 23-24 per cent from 25.3 per cent in FY23. Given its robust cash surplus, AIAE offers the optionality of incremental EPS/ROE growth through acquisitions and/or increased distributions. We maintain Buy with revised price target of ₹4,015 (30x Sept’25E EPS).

Key risk: Sharp rise in input prices and incremental anti-dumping measures in target markets.