AIA Engineering Q2 Results Review - Volume, Realisation Uptick Leads To A Strong Quarter: ICICI Securities
Highest-ever realisation of Rs 167/kg, on account of company’s ability to pass on all the remaining increased input costs.
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ICICI Securities Report
AIA Engineering Ltd. has reported an outstanding performance in Q2 FY23 with revenue, Ebitda and profit after tax coming in at Rs 13.3 billion, Rs 31 billion and Rs 2.4 billion (up 50%, up 93% and up 78% YoY), respectively.
This was led by growth in both volumes and realisations.
Volume growth of 13.7% YoY to 78,500 million tonnes per annum was a positive surprise. Mining/non-mining volumes grew 12%/18% YoY, respectively. This was led by conversion of new mines.
Highest-ever realisation of Rs 167/kg, increased 37% YoY / 7% QoQ, on account of company’s ability to pass on all the remaining increased input costs (raw material and freight costs). Ebitda margin came in at 23.5%, improved by 519 bps YoY.
Mill lining capacity of 50,000 mtpa was commissioned in Oct-22 and is likely to contribute commercially FY24 onwards.
AIA Engineering’s agreement with SAL Steel Ltd. is likely to give access to stable ferro-chrome supply in domestic market which we believe is a step in the right direction.
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