AIA Engineering Limited

Industrials — Specialty Industrial Machinery · NSE

₹3,720.00+₹40.70 (+1.11%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

The 60-second version of AIA Engineering Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

AIA Engineering Limited designs, develops, produces, installs, and services high chromium parts in India, the United Arab Emirates, and internationally.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees1,272

Annual revenue₹4,367 Cr

How does it make money?

Turns over ₹4,367 Cr a year. Of every ₹100 of sales, about ₹29 reaches shareholders as profit, with ₹34 left at the operating level before interest, tax and depreciation. Each of its 1,272 employees supports ₹3.43 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.43 Cr

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, LARSEN & TOUBRO LTD., HAVELLS INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 19.9% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE17.1%

What is the outlook?

11 analysts covering the stock expect revenue to grow about 11.2% and earnings to grow about 10.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+11.2%

Est. earnings growth+10.1%

Analysts11

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -10% while net margin moved +34% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-10%

Margin effect+34%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 3.4% a year
✗ Profit CAGR of only 6.4%
✗ Profit fell 1.3% in the latest year

Quality vs. Valuation

Company Quality

66/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

56/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

27.4x

3Y Median

32.1x

40 monthly readings · mean 32.3x · range 26.0x–44.9x

Sector Median

66.2x

median of 4 sector peers

🟢Current valuation is approximately 15% below its 3y median of 32.1x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 59% below the peer median of 66.2x.

vs. its own history

Fair

32.1x median over 40 months · -15%

vs. sector peers

Cheap

66.2x median of 4 peers · -59%

vs. generic bands

Fair

15x–35x

EV/EBITDA

23.3x

PEG

4.32

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 30.0% to 33.9% over 3 years.
Debt is being paid down
Total debt is down 98% over 3 years.
Very low debt
Debt/Equity of 0.13x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 24.0% to 19.9% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Receivables growing faster than salesFinancial
Receivables up 36% against revenue up -10% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.9% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 30.0% to 33.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 98% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 59% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹487 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 36% against revenue up -10%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 32%✓ 33.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹487 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 17%✓ 19.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 32.1x✓ 27.4x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

10 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 4 neutral · 1 weak

Market Cap

₹34,715 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

27.4x

Fair

Fairly valued against the generic band

P/B Ratio

4.32x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹135.69

Profitable

Profitable on a per-share basis

ROE

15.8%

Strong

Strong capital efficiency

ROCE

19.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.13x

Low

Conservative leverage

Revenue Growth (YoY)

12.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-1.3%

Falling

Profits are shrinking

Dividend Yield

0.43%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹487 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

24.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

23.9%

Good

Healthy core-business profitability

Net Margin

27.8%

Good

Strong bottom-line conversion

Current Ratio

19.09

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.25

Defensive

Steadier than the market

52W Range Position

26%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

3839.4 / 4125.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

31.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹4,852 Cr	₹4,783 Cr	₹4,238 Cr	₹4,367 Cr	-3.4%
EBITDA	₹1,453 Cr	₹1,565 Cr	₹1,307 Cr	₹1,480 Cr	+0.6%
EBITDA Margin	30.0%	32.7%	30.8%	33.9%	—
PAT (Net Profit)	₹1,056 Cr	₹1,136 Cr	₹1,061 Cr	₹1,270 Cr	+6.4%
EPS	₹111.95	₹120.4	₹113.14	₹136.11	+6.7%
ROE	18.6%	17.1%	15.3%	15.8%	—
ROCE	24.0%	22.5%	19.7%	19.9%	—
Total Debt	₹503 Cr	₹461 Cr	₹491 Cr	₹10 Cr	-72.7%
Free Cash Flow	₹673 Cr	₹692 Cr	₹1,025 Cr	₹487 Cr	-10.2%

🔴 Revenue has shrunk at 3.4% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (0.6% a year).

🟢 EBITDA Margin has risen from 30.0% to 33.9% over 3 years (+3.9 pts).

🟢 PAT (Net Profit) has grown at 6.4% a year over 3 years.

🟢 EPS has grown at 6.7% a year over 3 years.

🔴 ROE has fallen from 18.6% to 15.8% over 3 years (-2.7 pts).

🔴 ROCE has fallen from 24.0% to 19.9% over 3 years (-4.1 pts).

🟢 Total Debt has shrunk at 72.7% a year over 3 years.

🔴 Free Cash Flow has shrunk at 10.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹8,538 Cr

Total Liabilities

₹504 Cr

Cash & Equivalents

₹215 Cr

Operating Cash Flow

₹592 Cr

Capex

-₹104 Cr

Shareholding (proxy)

Institutional Holding

34.1%

Insider Holding

58.5%

Corporate Actions

Next Earnings

06 Nov 2026

Dividend Rate

₹16

Ex-Dividend Date

04 Sept 2026

Analyst Consensus

Recommendations

9 Buy · 2 Hold · 2 Sell

Target Price (Mean)

₹4,847.39

+30.3% vs CMP

Target Range

₹3,568 – ₹6,000

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
LARSEN & TOUBRO LTD.	30.1x	15.2%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

2 positive3 mixed1 general

Why You Might Be Interested In AIA Engineering Limited (NSE:AIAENG) For Its Upcoming Dividend

Simply Wall Street, 31 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

AIA Engineering Ltd. Peer Comparison – Compare with Others

Value Research, 30 Aug

AIA Engineering spurts 9%; hits 52-wk high on strong Q4 show, 800% dividend

Business Standard, 27 MayCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Earnings call transcript: AIA Engineering Q1 2026 shares fall as margins ease

Investing.com, 12 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

AIA Engineering shares fall 2.19% on Monday morning trade

Moneycontrol.com, 17 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

After earnings beat, AIA Engineering banks on new mining solution for volume uptick

Livemint, 27 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Profitability · Risk

MiddlingValuation

WeakGrowth

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑