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Kotak Maintains BUY on AIA Engg

February 15, 2007

Irrespective of what happens with the CRR, Kotak Securities has retained BUY rating on AIA Engineering with a price target of Rs 1520, 18% upside from current levels. AIA Engineering has reported good Q3FY07 results, which were in line with analyst estimates.

AIA Engg’s expansion plans are on track. The company plans to increase its capacities from 65,000 TPA to 115,000 TPA by end of March-2007 and increase rise further to 165,000 TPA by October-2007. To cater to the demand of mill internals, the company is setting up another 100,000 TPA plant for manufacturing high chrome mill internals.

The company has an order book of Rs 3.7 bn of which 55% is for exports.

AIA Engg is expected to earn EPS of Rs 52, 76 and 101 for FY07, FY08 and FY09 respectively. The price target for AIA Engineering is Rs 1520.

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