AIA Engineering Limited — Q2 FY24
AIA Engineering reported Q2 FY24 revenue of INR 1,273 crore and EBITDA of INR 444 crore (34.32% margin), driven by favorable product mix, lower raw material costs, and rupee dep...
bullish
high
✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
83%Questions answered0Evaded / deflected9Questions auditedMixedNumbers vs filing
Partial answer
High priority
Why is incremental tonnage lower and slipping to next year?
Asked by Bhoomika Nair, DAM Capital
Acknowledged slippage but gave no concrete reasons or timeline for conversion delays.
no specific timeline givenblamed external factors
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Question
Sanjaybhai, this, you know, what you mentioned right now, that, from an incremental tonnage perspective, we are looking at a lower number. You know, if you can just give some more clarity around this and why are we seeing this kind of a slippage into the next year, and what is the reason for the delay in the acceleration of volumes or, you know, slower pace of conversion?
Sanjay Majmudar, Independent Director
What I wanted to convey that from a conversion process opportunity, as well as the number of mines on which we are working, it remains absolutely the same or rather more. We are little bit more aggressive. The only problem is that the time is exactly not under our control.
Answered
Medium priority
What is the addressable market for the Australia entity stake?
Asked by Bhoomika Nair, DAM Capital
Provided a specific market size and explained the strategic rationale.
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Question
The other question was related to the, you know, Australia entity. If you can just throw some light in terms of what is the addressable market for this stake?
Sanjay Majmudar, Independent Director
We are looking at an addressable market for mill liners at, say, around 300,000+ tons for the metal segment. Correct? Now, we have one design capability already. This is one more incremental.
Partial answer
High priority
Will margins remain elevated before normalizing to 21-23%?
Asked by Bhoomika Nair, DAM Capital
Changed margin guidance from 21-23% to 23-24% but did not specify when normalization would occur.
revised guidance upward without clear timeline
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Question
So do we think that, you know, why it may take some time to pass on the benefits of the lower cost to kind of clients, so this might remain elevated for the next one or two quarters, and then kind of settle down towards our medium to long term trajectory of 21%-23%?
Sanjay Majmudar, Independent Director
I think, a little more realistic trajectory could be a little slightly above 23%-24%.... While we continue to report much better margins. So, you know, as I said, now we believe that this 23%-24% seems to be a very consistently reasonable bottom that we can look at.
Answered
Medium priority
What is the expected sales realization range for H2?
Asked by P.A. Gravit, Invest Analytics
Provided a specific range and clarified factors affecting realization.
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Question
My question is on the sales realization side. What is the range expected for second half?
Sanjay Majmudar, Independent Director
It, it will vary between INR 150-INR 165, you know, depending on, like I said, a variety of factors. ... So yeah, closer to INR 155, INR 160 over the next four quarters is what we can estimate right now.
Answered
High priority
Why are conversion delays happening?
Asked by P.A. Gravit, Invest Analytics
Explained the typical conversion process and reasons for delays.
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Question
Understood. And means what is the exact reason? Means why these delays are happening in the conversion, like you are negotiating with the customers and mining.
Sanjay Majmudar, Independent Director
So you do trial and error, you engage into discussions with their technical guys. They may come for a further evaluation, then they may want to negotiate on the terms. This process typically takes one to one and a half years, maybe a little longer, in case of certain more complicated situations.
Partial answer
High priority
Can we expect 35,000-40,000 tons by April 2025?
Asked by P.A. Gravit, Invest Analytics
Gave a broad range but deferred precise guidance to Q4.
deferred to next quartergave broad range
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Question
So going by that, by April 2025, can we expect 35,000-40,000 kind of volumes in April 2025?
Sanjay Majmudar, Independent Director
I, I told the previous participant that we will come with a more precise number, but broadly, yes, you can look at least 30,000-40,000 minimum. But again, we will come to you with some more specific number as we approach the fourth quarter.
Answered
High priority
Why are margins improving despite no operating leverage?
Asked by P.A. Gravit, Invest Analytics
Clearly explained that margins are driven by product mix and pass-through, not operating leverage.
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Question
Sir, on your margin side, so which are improving consistency over the quarters, is obviously a good thing, but the problem is the reason for the same is not clear to me. Like, it doesn't seem the operating leverage, because our volumes are not that high, if I compare with the past.
Sanjay Majmudar, Independent Director
Our business is not running on operating leverage. Our business is primarily driven by an extremely wide product mix, where we have products ranging from INR 80-INR 100 a kilo, all the way to INR 250-INR 300 a kilo. It's a function of product mix, then it's a function of pass-through.
Declined
Low priority
What were average raw material prices for steel and ferrochrome?
Asked by Ashish Shah, JM Financial
Declined to provide specific raw material prices, citing granularity.
refused to share granular data
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Question
Sir, could you help me with what were the average raw material prices, like steel and Ferrochrome for the quarter, versus, maybe last year? So how has been the YoY movement?
Sanjay Majmudar, Independent Director
Listen, it'll get little too granular to start sharing. You know, the idea of sharing raw material price was only to say that it continues to be at an elevated level and volatile.
Answered
Low priority
Are freight rates expected to rise due to geopolitical issues?
Asked by Ashish Shah, JM Financial
Gave a clear 'no' answer.
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Question
But because of the whatever is happening around in terms of, the geopolitical issues, are you seeing that go up again? Have you seen any indications that in the coming months or quarters?
Sanjay Majmudar, Independent Director
No, no, not yet. Freight rates?
Answered
Medium priority
How difficult is it to manufacture high-chrome grinding media?
Asked by Puneet Patani, CD Capital
Explained the complexity and entry barriers in detail.
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Question
How difficult it is to manufacture high-chrome grinding media, and what prevents any new player from manufacturing and scaling up the same?
Sanjay Majmudar, Independent Director
We are 100% focused on providing customized solutions. ... It's very complex. So it's, it's, it's not easy for anybody to emulate the capability of providing a customized solution, though it's not a rocket science.
Answered
Medium priority
Could a competitor undercut to cannibalize our customer base?
Asked by Puneet Patani, CD Capital
Acknowledged theoretical possibility but explained practical improbability.
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Question
Is there a possibility that once a miner adopts high-chrome media from competitor, could employ undercutting strategy to cannibalize our customer base?
Sanjay Majmudar, Independent Director
Theoretically, it is always possible. Practically, it is very difficult because Magotteaux operates under different operating circumstances. ... Practically, it is extremely improbable, if not impossible.
Answered
Low priority
What is the withholding tax provision of INR 8.33 crore?
Asked by Santosh Keshri, Keshri Financial Services
Explained the nature of the provision and that it was written off.
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Question
So I was just wondering that, what it is about, if you can tell us? And secondly, if this is a withholding tax in the other country, then isn't it available as a foreign tax credit to you in India? Why should we make a provision?
Sanjay Majmudar, Independent Director
This particular withholding tax was in one particular country where we were not—I mean, there was no withholding tax as such, but the government has withheld the tax. ... We have written it off.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| Q2 FY24 revenue INR 1,273 crores | ₹1,273 cr | ₹1,295 cr | Matches filing |
| Q2 FY24 EBITDA INR 444 crores, margin 34.32% | ₹444 cr | ₹444 cr | Matches filing |
| Q2 FY24 PAT INR 323 crores | ₹323 cr | ₹324 cr | Matches filing |
| H1 FY24 revenue INR 2,494 crores | ₹2,494 cr | ₹1,295 cr | Overstated vs filing |
| H1 FY24 EBITDA INR 846 crores | ₹846 cr | ₹444 cr | Overstated vs filing |
| H1 FY24 PAT INR 595 crores | ₹595 cr | ₹324 cr | Overstated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.