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􀂄 Numbers in line with estimates; margin improves
AIA Engineering’s (AIA) Q2FY11 results were in line with our expectations as the
sharp increase in raw material cost was arrested by dip in other expenses. Revenue
recorded 18.4% Y-o-Y growth to INR 2,585 mn, led by strong pick up in volume
which grew 23.1% Y-o-Y to 28,448 tonnes even as realisation dipped marginally by
3.8% Y-o-Y to INR 90.9/kg. Exports contribution dipped to 53% of sales (from 60%
during Q2FY10) at INR 1,365 mn, up 4% Y-o-Y, even as domestic sales picked to
INR 1,220 mn, up 40% Y-o-Y to 47.2% of total sales. Higher ferro alloy prices
continued to put pressure on raw material cost, which increased by 34.6% Y-o-Y to
INR 1,289 mn (a 600bps surge to 49.9% of sales). This was negated by a equally
sharp dip in other expenses which was 9.3% Y-o-Y (a 649bps dip to 21.2% of sales)
despite a forex loss of INR 32 mn on the back of exchange rate volatility. EBITDA
improved 21.1% Y-o-Y to INR 624 mn as margin expanded 54bps Y-o-Y to 24.2%.
Despite reduced tax outgo, sharp fall in other income (down 70.7% Y-o-Y to INR 34
mn) led to a reduced growth in PAT to INR 449 mn, a growth of 7% Y-o-Y.
