AIA Engineering hosted a conference call on May 25, 2023. In the conference call, the company was represented by Mr Kunal and Mr Sanjay.

Key takeaways of the call

Numbers for the year were very encouraging. Consolidated revenues for the company crossed Rs 5000 cr and PAT crossed Rs 1000 cr.

Volume:

In Q4FY2023, the company sold 73,505 MT (Produced 74674 MT) as against 72,976 MT in Q4FY2022.

Mining volumes stood at 48,249 MT in Q4FY2023 against 44,395 Mt in Q4FY2022. Mining volumes stood at 1,92,352 MT in FY2023 compared to 1,70,842 MT in FY2022.

Non mining volumes stood at 25,256 MT in Q4FY2023 as against 28, 581 in Q4FY2022. In FY2023 Non mining volumes stood at 98,990 as against 89627 MT in FY2022.

Revenue from sales stood at Rs 1,251.8 cr  in Q4FY2023 as against Rs1080.0 cr in Q4FY2022.

EBITDA for the quarter stood at Rs 379.6 cr and PAT stood at Rs 268 cr.

Other income was down in Q4 FY2023 due to lower forex gain mainly due to changes in currency rate.

Sequential terms at EBITDA terms there was 5% reduction and 5% reduction on account of cost of goods sold. This on account of change in product mix, price pass through which has been on the lower side.

Export benefits are little higher when compared to last 3 quarters due to increase in 1% duty on export of grinding media.

Revenue from sales stood at Rs 4838 cr in FY2023 as against Rs 3514 cr in FY2022.

EBITDA for the year stood at Rs 1475 cr as against Rs 877.0 cr in FY2022 and PAT stood at Rs 1055 cr as against Rs 619.7 cr.

FY2023 was the first full year after covid interruption and the company is back to growth mode.

Weighted average realization for the quarter stood at Rs 170/ per kg which is comparable with last quarter. Realization also reflects product mix change as well. There was little more casting v/s grinding media.

Cash Balance: The company has net cash balance of Rs 2550 cr as on Mar 31,2023.

Treasury income for the quarter stood at Rs 48 cr as against Rs 42 cr largely in line with cash balance.

The company plans to maintain the large cash balance for at least for next one year.

Working capital: The working capital was largely in line with receivable days at 63 days. Also raw material days and work in progress days was largely flat sequentially.

However, there is improvement in working capital when compared to last year which is primarily due to conscious effort of the company. Also, there is reduction in transit inventory.

Expansion: The company is doing some restructuring with respect to its manufacturing plant, working on automation, upgrades, debottlenecking and creating some ware houses which will result in improvement in operations. The company has earmarked around Rs 200 cr for such reorganization.

The company is increasing non grinding media capacity by around 20000 tons in next 4-6 months(Oct to dec).

The company is working on brownfield capacity expansion of grinding media. It plans to add 80,000 MT. The same is expected to be implemented by the end of financial years FY2024.

The company also plans to invest in windmill and plans to invest around Rs 50 cr. The current captive and renewable capacity contribution is around 23- 27% of power and the company plans to increase it to 40-42%.

CAPEX: The company plans to incur around Rs 150 cr towards greenfield project, Rs 50 cr towards renewable wind energy and Rs 200 cr towards restructuring CAPEX. Of the total CAPEX of Rs 400 cr,  around Rs 300 cr will be incurred in FY2024 and Rs 100 cr in next financial year.

Outlook:

The company has an order book of Rs 770 cr as on April 1 2023.

The company is comfortably placed to increase volumes by around 30000 tonnes per annum currently in FY2024 and maintain margin guidance in the range of 20-22% and more.

The business of the company is unaffected by Global factors and the company focuses on conversion of mills. It will continue to focus on all its key markets.

Dividend: The board of directors have declared dividend of rs 6 per equity share of the company.