AIA Engineering Limited — Q3 FY24
AIA Engineering reported Q3 FY24 revenue of INR 1,146 crore, with EBITDA of INR 395 crore (33.79% margin) and PAT of INR 279 crore.
neutral
medium
✓ 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.
58%Questions answered2Evaded / deflected12Questions auditedContradictedNumbers vs filing
Partial answer
High priority
Impact of freight cost increase due to Red Sea on Q3 and Q4.
Asked by Mohit Kumar, ICICI Securities
Acknowledged future impact but gave no quantification and deferred to wait-and-watch.
no specific cost impact givendeferred to future pass-through
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Question
My first question is on this, is there impact of freight costs in this particular quarter? And are you seeing that the freight cost has jumped substantially in the quarter because of Red Sea, and does that impact, that will impact the Q4 also?
Kunal Shah, Executive Director
While this quarter, we've not seen the current PNL for Q3 does not reflect the increased freight cost, but surely going forward, there will be a freight cost increase... most of it is a pass-through... we are also on a wait-and-watch basis right now.
Answered
Medium priority
Decline in non-mining volume and weakness in cement industry.
Asked by Mohit Kumar, ICICI Securities
Explained the long-life nature of products and gave a normal volume range, directly addressing the concern.
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Question
My second question is on the non-mining sector. The volume has been declined last nine months. Does it mean that there's some weakness in the cement industry, which is percolating to a weakness in volume?
Sanjay Majmudar, Independent Director
Not really, not really. The non-mining... a lot of our solutions for cement also have much longer wear lives... our tube mill liner for cement could be five years, seven years, sometimes even 10 years... non-mining is around 75,000, around 80,000-90,000 tonnes, and we expect that to continue at that level.
Partial answer
High priority
Capital allocation policy with INR 3,100 crore net cash.
Asked by Karan Gupta, K3 Capital
Explained cash retention rationale but gave no concrete plan for returning capital.
no specific shareholder return plandeferred to future
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Question
Can you throw some light on your, the capital allocation policy going forward, you know, with INR 3,100 crore of net cash, that seems to be a sizable amount. So what are your needs going to be, and are you working on some policy on returning capital to shareholders?
Sanjay Majmudar, Independent Director
We are following a little conservative policy right now... we are constantly doing CapEx about, on average run rate of INR 200-250 crores a year... we might want to have an opportunity to look at any inorganic possibility. Therefore, we are maintaining a little higher cash... not in immediate future, not at least for next one year.
Answered
High priority
Confirmation of CapEx plan of 540,000 tonnes.
Asked by Amit Anwani, PL Capital
Confirmed the CapEx plan with specific numbers.
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Question
My first question is on just to reconfirm the CapEx. We used to talk about INR 5 lakh 40. That is on track, right? INR 50,000 for current.
Sanjay Majmudar, Independent Director
Very much. Very much. We are already at 440, and another 80,000 tons, plus another 20 or 1,000 tons, so it will be 540.
Answered
High priority
Traction and progress on mill liners.
Asked by Amit Anwani, PL Capital
Provided current run rate and expressed confidence, directly answering the question.
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Question
So just wanted to understand, on mill liner, you know, we started the journey, four, five years back, and so what is the traction which we are developing? So we talked about Australian market and few other markets, which evaluated products on mill liner.
Sanjay Majmudar, Independent Director
We are, we are very much on track, and we remain rather quite excited about the opportunities which are unfolding... We are currently at a run rate of around 34,000 tones of mill liners already on an annual basis...
Partial answer
High priority
Why volume additions are consistently missed and any strategy change.
Asked by Amit Anwani, PL Capital
Acknowledged delays but did not explain why targets are consistently missed; maintained same guidance.
no specific reason for repeated missesreiterated long-term optimism
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Question
So past nine years, we have never, you know, added more than 25-30,000 incrementally... Any change in strategy? Because again, you know, this year also we targeted 25,000 plus addition... We are going to be flattish...
Sanjay Majmudar, Independent Director
The process is extremely long and time consuming... we are on track. And if you look at the overall opportunity landscape... we are conservatively saying definite possibility of around 25,000-30,000-odd tons incremental volume growth in the coming year.
Evasive
Medium priority
Overall conversion rate from forged to high chrome and competition.
Asked by Amit Anwani, PL Capital
Claimed leadership but provided no data on overall conversion pace or competitor progress.
did not quantify conversion ratedismissed competition without data
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Question
So one is we highlighted 2.5 million tons of conversion from forged to high chrome. So just wanted to understand that the overall conversion versus AIA, which is facing delays, the overall, you know, global conversion, is it faster than...
Sanjay Majmudar, Independent Director
We are the only ones leading the whole charge towards conversion from forged to high-chrome... I don't think there is anyone else doing conversion to chrome really besides us, given this context.
Evasive
High priority
Whether FY25 volume guidance includes missed FY24 volumes.
Asked by Swati Jhunjhunwala, BOB Capital
Did not clarify whether missed volumes are included; deflected to uncertainty.
did not answer inclusion of missed volumescalled guidance indicative
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Question
So, this year we have missed the volume addition mark by of 30,000 additions in FY 2024. For FY 2025, when we are seeing 30,000 tons incremental additions, does this include the 10,000-18,000 that we have missed this year, or is that over and above that?
Sanjay Majmudar, Independent Director
Our expectation, or rather our hope, and our effort is to do much more than that. It's just that there is uncertainty linked to when that conversion will happen... 25, 30 is just an indicative figure... what we have missed this year is not the opportunity. It remains, the effort remains.
Partial answer
High priority
Outlook for margins and realizations in current quarter.
Asked by Rohit Singh, Nvest Analytics
Refused quarterly margin guidance but gave a long-term range and realization estimate.
no quarterly margin guidancegave range but not specific
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Question
So my question is on the margin side and the realization side. So what is the outlook for the current quarter in terms of margins and the realization?
Sanjay Majmudar, Independent Director
I think, margin we've discussed enough times, where our guidance, we're not giving a margin guidance, but we are saying that our business will do enough to do a 20-22% margin... And as far as our realization is concerned, we expect it to be between INR 150 and INR 160, depending on the product mix.
Partial answer
High priority
Further downward estimate of margins due to freight.
Asked by Rohit Singh, Nvest Analytics
Acknowledged potential near-term pressure but gave no quantification.
no specific BPS estimatedeferred to long-term guidance
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Question
No, like in last quarter you predicted, you mentioned the EBITDA 300-400 BPS. So in that manner, I was asking for you, is there any further downward estimate of the margins? That is what I was asking for.
Sanjay Majmudar, Independent Director
There, there is, from current levels, there could be a further adjustment because of the freight that's increased, right? So near term, there is a likely increase in freight cost... But longer term... our margin guidance remains at 20%-22%.
Partial answer
Medium priority
Share of copper and gold in the 2.5 million-ton market and in AIA's volume.
Asked by Anirudh Shetty, Solidarity Investment Managers
Gave a qualitative equal split but refused to provide actual numbers.
no specific share givendeclined to share segment volumes
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Question
You know, in the past you have mentioned that copper and gold are opportunities that, you know, could do better than the others in terms of growth. So, in the industry, in the overall industry, the 2.5 million-ton market, and for our business, what would the share be from gold and copper respectively?
Sanjay Majmudar, Independent Director
This is almost equal. Again, in terms of opportunity, we are equally focused on iron ore... we don't share the industry segment-wise volumes, but you can broadly say that between the three, more or less, they are equal.
Answered
Medium priority
Mill liner volume for FY24 and capacity details.
Asked by Chirag Wagadia, Centrum Broking
Confirmed volume and provided capacity figure directly.
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Question
So sir, the question was on mill liners. So just to clarify, you mentioned that 30,000 metric tons would be approximately the mill liners volume. That is for this year, correct, sir, FY 2024?
Sanjay Majmudar, Independent Director
Yeah. ... When we are talking of a multipurpose plant, there we can manufacture these mining mill liners. The total capacity will be about 70,000 tons, all put together, for mill liners.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| Long-term margin guidance of 20-22% | 20% | 27% | Understated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.