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Informist, Wednesday, Aug. 12, 2026

 

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--AIA Engg: Status quo in Q1 earnings, no impact of large macro events
--CONTEXT: Comments by AIA Engg's mgmt in post-earnings analyst call
--AIA Engg: Product mix not that great in Apr-Jun
--AIA Engg: Expenses on ongoing trials booked into Q1 other expenses
--AIA Engg: Chinese competition not present in high-chrome products
--AIA Engg: Not giving any volume growth guidance for FY27 at this time
--AIA Engg: Taking trials with large mines in Latin America
--AIA Engg: Excited with opportunities in South America, a large market
--AIA Engg: Can't delink new gen discharge pdts from grinding media, lining
--AIA Engg: Focus remains on solutions for clients, not plain vanilla pdts
--AIA Engg: Freight costs rose in Q1, included in other expenses
--AIA Engg: Co does not give any guidance on margins
--AIA Engg: Ghana, China plants not shelved, currently in slow mode
--AIA Engg: To keep on adding capacity to be ready for client conversions
--AIA Engg: FY27 capex may go up to INR 3.50-4 billion
 

 

By Rajesh Gajra and Arya S. Biju

 

MUMBAI – AIA Engineering Ltd. is increasing its focus on South American mining markets, which it considers to offer exciting opportunities for client conversions, a senior official said. Until recently, the company had expected future growth to come from mining markets for copper, gold, and iron ore across the Americas, Africa, Asia, and Australia, but the large South American markets are currently facing an "extraordinary problem of falling yield," the official said at a post-earnings conference call with investors and analysts Wednesday.

 

The company believes it can offer solutions to the falling-yield problem in the mining market that no one else can, "allowing us for a sticky proposition with reasonable margins and a sustainable group for a few years..." AIA Engineering is already conducting trials with very large mines in the South American markets, he said. The mining markets in that region are large. "We are talking about more than 500,000 tonnes of grinding media consumption, plus the whole gamut of all products that go into one concentrated market," the official said.

 

Around 40% of the mining market opportunities the company sees across the world are from the South American region, he said. "Naturally, all of our concentration will be on that geography. Having said that, other markets are important, and we will continue working in all other markets," the official said.

 

In response to a question on whether competition from Chinese companies was undercutting the company on pricing and posing a threat to client conversions, particularly in markets without anti-dumping duty protection, a senior official said there was currently no presence of Chinese players in the high-chrome operations that the company specialises in. Front-end solution-engineering capabilities remain concentrated among a limited number of companies, he said.

 

On the June quarter earnings, the company said it was an uneventful quarter, with the company maintaining the "status quo." A senior official said there were no large macro events that impacted the company or raised concerns. But freight costs did rise during the June quarter, he said. Outward freight expenses, which made up 11.8% of total expenses, jumped 80% on year, the earnings data showed.

 

The product mix in the June quarter was also not "that great," the company said. Consolidated net profit declined 1.3% on year to INR 3.01 billion, despite a 12% increase in revenue to INR 11.68 billion in the June quarter. 

 

The company's sales volume for the June quarter increased to 64,644 tonnes from 60,156 tonnes a year ago, amid a rise in production volume to 61,338 tonnes from 59,516 tonnes. To a question on whether the company can hit around 280,000 tonnes of volume for 2026-27 (Apr-Mar), a senior official said the company was not giving any guidance on this currently.

 

"... we have to ask you to, maybe, wait for one more quarter, after which we will give you any exact guidance. Of course, our target is a much bigger growth that we are anticipating," the official said. On margins, the company has a policy not to give any guidance at all, he said.

 

On recent foray into satellite manufacturing operations outside of India, in Ghana and China, the company said these are currently in slow mode. "In Ghana, we have identified the location. We are now in dialogue with the government to make sure that all... what we need is available," a senior official said. In China, the company has set up a small laboratory facility. It was currently exploring possibilities to build infrastructure for manufacturing operations and the investments that would be required, the official said.

 

AIA Engineering, which currently has an installed capacity of 436,000 tonnes per year, incurred capital expenditure of INR 500 million in the June quarter. A senior official said that about INR 300 million of capex in the June quarter was in hybrid solar and wind operations, and the balance was in maintenance and debottlenecking work.

 

The official said the capex for FY27 will likely be INR 3.5 billion-INR 4 billion. The company is getting ready for additional surplus capacity and will keep adding capacity to ensure it is ready to service projects when client conversions occur. "We are working very hard to have radically different solutions which can significantly help us increase our overall production and off-take and sale to the customers...," he said.

 

The company recently introduced next-generation discharge systems to help customers increase mill throughput, reduce power consumption and enhance liner life. To questions on the growth potential from this new offering, a senior official said it is not being offered as a product but as a solution. It is integrated into customers' grinding media and lining operations and gets the company client stickiness that comes along with such an offering, the official said.

 

Wednesday, shares of AIA Engineering ended at INR 4,523 on the National Stock Exchange, down 5.4% from the previous close.

End

 

Edited by Saji George Titus

 

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