AIA Engineering’s shares have gained about 11% in two days, after its March quarter (Q4FY26) Ebitda jumped 20% year-on-year to ₹362 crore, beating Street estimates.
Profitability was aided by rupee depreciation, better exports realization, and improved product mix, even though volume growth was just 2%. Revenue rose 10% to ₹1,250 crore in Q4FY26. However, revenue and Ebitda growth for April-December (9MFY26) was 1% and 6%.
AIA manufactures metal balls with high-chrome content called grinding media, used to crush raw materials across mining, cement, and power industries. Investors also seem excited about the successful completion of trial of a new grinding solution, comprising grinding media, mill liners and discharge system, for a mining company in Latin America (Latam). AIA is holding similar trials with another miner in the same region, and it will be completed in 2-3 months.
The new system could reduce power consumption by about 15%, besides improving throughput. “The acceptance of the mill optimisation solution after years of efforts is a key development and can lead to strong volume growth over FY26–30,” noted JM Financial Institutional Securities. The broking firm also revised its FY27-28 Ebitda estimates upwards by 4%, factoring in rupee depreciation.
AIA could also benefit from structural shift in the global mining industry, primarily in Latam, facing declining yields. This is forcing miners to adopt high-chrome grinding media that are high-cost but also generate high yield, against the currently used forged grinding media.
Realization stood at ₹178 per kg in Q4FY26, but the management has guided for it to be sustainable, at around ₹165 per kg. AIA garners almost two-thirds of its revenue from exports that saw steep rise in freight rates due to the West Asia war. But it managed to pass on the cost. The rates have moderated now, per the management. But there is still some uncertainty due to changes in routes, leading to an increase of 10-15 days in shipping duration.
AIA expects margins to improve with the commissioning of its renewable energy capacity, expected by July. Renewables would provide about two-thirds of its power needs, and generate savings of ₹1,000 per tonne.
The stock has risen 36% from its 24 March lows and trades at 32x FY27 estimated earnings, as per Bloomberg. Successful conversion of miners to hi-chrome media and acceptance of mill liners could lead to further re-rating.