AIA Engineering (AIAENG) Q2 24/25 earnings summary

Executive summary

• Sales volumes and revenue declined year-over-year, with H1 FY25 sales at 120,922 MT and revenue at Rs. 206,418 lacs, compared to 151,771 MT and Rs. 253,438 lacs in H1 FY24.

• EBITDA for the quarter was INR 366 crores, nearly unchanged sequentially but down from INR 444 crores year-over-year.

• Profit after tax for H1 FY25 was Rs. 51,630 lacs, compared to Rs. 59,542 lacs in H1 FY24.

• The company is experiencing a cyclical slowdown due to customer destocking and supply chain disruptions, not structural issues.

• Revenue from operations for the half year ended 30 September 2024 was ₹171,784.75 lakhs, up from ₹168,908.84 lakhs year-over-year.

Financial highlights

• Revenue for the quarter was INR 1,030 crores, up slightly from INR 1,004 crores sequentially, but down from INR 1,273 crores year-over-year.

• EBITDA margin for H1 FY25 was 35.78%, up from 32.47% in H1 FY24.

• Earnings per share for the half year was ₹53.50, compared to ₹49.25 last year.

• Net cash position is INR 3,212 crores after buyback payout, with a small debt of INR 120 crores.

• Capex incurred during H1 FY25 was Rs. 93 crores.

Outlook and guidance

• Full-year sales volume is expected to be 10% lower than last year, at around 255,000-260,000 tons.

• Management remains optimistic about medium- to long-term prospects, but conversion cycles are taking longer than anticipated.

• Order book as of 1st October 2024 stood at Rs. 655 crores, indicating a healthy pipeline.

• No guidance for next year will be provided until Q3 results offer more clarity.

• The U.S. Department of Commerce announced a preliminary countervailing duty of 3.36% on certain high chrome iron grinding media imported from India, with a final determination expected in February/March 2025.