AIA Engineering Limited — Q3 FY26 earnings call

Call held 30 Jan 2026

Management summary

AIA Engineering reported a solid Q3 and nine-month performance for FY26, with strong margins despite operating below full capacity. The company is strategically focused on large mining opportunities outside India, particularly in gold and copper, and is advancing trials for solution-oriented products. Capacity expansion plans in Ghana and China are progressing, with significant capex expected over the next 1.5-2 years.

Highlights

  • Q3 FY26 Operating Revenue stood at INR 1,066 crores, with a total top line of INR 1,200 crores.

  • Reported EBITDA for Q3 FY26 was INR 425 crores, representing an almost 40% margin.

  • PAT for Q3 FY26 (after minority interest) was INR 294 crores.

  • For the nine months FY26, PAT was INR 876 crores and EBITDA was INR 1,241 crores on an operating revenue of INR 3,153 crores.

  • The company's total capacity is now 436,000 tons after closing the Welcast Steels plant, with current utilization at 60-65%.

  • Cash levels remain strong at approximately INR 4,200 crores.

  • Balance capex for FY26 is projected at INR 75-80 crores, including INR 30 crores for new solar hybrid capacity.

Concerns

  • Global copper shortage

Key financials

3 periods

Headline

  • Cash Levels
    ₹4,200 Cr

Q3

  • Operating Revenue
    ₹1,066 Cr
  • Total Top Line
    ₹1,200 Cr
  • EBITDA
    ₹425 Cr
  • EBITDA Margin
    40%
  • PAT
    ₹294 Cr

9M

  • Operating Revenue
    ₹3,153 Cr
  • Total Income
    ₹3,495 Cr
  • EBITDA
    ₹1,241 Cr
  • PAT
    ₹876 Cr

What they filed

Q1 FY27: revenue up 12.4%, net profit down 1.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,044 1,066 1,157 1,039 1,048 +0%1,067 +0%1,266 +9%1,168 +12%
EBITDA276 283 302 306 297 +8%290 +2%363 +20%308 +1%
Net profit256 259 285 305 277 +8%293 +13%393 +38%301 −1%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Inflow this quarter

64,500 tons

Composition

Mix 2 geographies
  • India Mining (Q3) 5,000 tons 21.7%
  • India Mining (9M) 18,000 tons 78.3%

Share of order book by geography, derived from disclosed amounts

Cancellations & deferrals

  • lost due to duties: Lost volumes due to duties over 5-7 years, totaling 75,000-80,000 tons.
The company reported Q3 sales of 64,500 tons and 9-month sales of approximately 187,000 tons. Management noted that current annual run rate is 250,000-260,000 tons, operating below full capacity. The focus for growth is on large mining opportunities outside India, particularly in gold and copper, rather than domestic market.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹180 Cr
    • New solar hybrid capacity ₹30 Cr
    • Other capex ₹50 Cr
    • Ghana facilities
    • China facilities
    Sanjay Majmudar: 'So FY '26, I think you guided close to INR180 crores, out of which INR105 crores is done. So will balance INR75 crores be done in Q4? And what about this China and Ghana, like any time line on that? I'll tell you. Balance INR75 crores, INR80 crores, around INR30 crores is for our new solar hybrid capacity, which is committed, and which is 100% going to happen in Q4. Plus certain capex -- I would say a realistic number is in the range of about INR50 crores to INR55 crores.'
  • M&A Welcast Steels (subsidiary) Divestment · Closed

    Old plant, alternate capacity created in Ahmedabad, not viable to invest heavily.

    Closure reduced total capacity by 24,000 tons.

    Kunal Shah: 'One highlight was the fact that we've closed our plant in -- closed the plant of our subsidiary in Bangalore called Welcast Steels, and that reflected 24,000 tons of capacity.'
  • Liquidity Cash ₹4,200 Cr
    Kunal Shah: 'Our cash levels continue to be around INR4,200 crores.'

Guidance & targets

Capex

  • Balance FY26 Capex Capex · Q4 FY26 · High confidence INR 75-80 crores
    I'll tell you. Balance INR75 crores, INR80 crores, around INR30 crores is for our new solar hybrid capacity, which is committed, and which is 100% going to happen in Q4. Plus certain capex -- I would say a realistic number is in the range of about INR50 crores to INR55 crores.

    — Sanjay Majmudar

Capacity

  • Ghana Plant Commissioning Capacity · after Q4 FY26 clearances · Medium confidence 1.5 years
    If that happens, then over the next 1.5 years we should have the Ghana capex in place.

    — Sanjay Majmudar

  • China Facilities Commissioning Capacity · after Q4 FY26 clearances · Medium confidence 1.5-2 years
    But you can say over the next 1.5 to 2 years, we should have both the facilities in place.

    — Sanjay Majmudar

Margin

  • EBITDA Margin (higher volume) Margin · future (higher volume scenario) · Low confidence 23-24%
    Of course, our guidance per se on an operating side at a much higher volume is actually lower. We are talking of 23%, 24% and not even 27%.

    — Sanjay Majmudar

What to watch in Q4 FY26

Ghana Plant Clearances

next quarter
Current Awaiting government clearances
Target Clearances received

Why it matters

Clearances are a prerequisite for the 1.5-year capex timeline for the Ghana plant, crucial for international expansion.

Sanjay Majmudar: 'We are awaiting for certain clearances from the government. So that work -- but that is not going to be significant in Q4. ... If that happens, then over the next 1.5 years we should have the Ghana capex in place.'

Risks & concerns

  • Global copper shortage

    high

    The world faces a 'clear and present danger' of not producing enough copper to meet growing demand, driven by declining grades and environmental/political issues.

    Kunal Shah: 'In that sense, there is a clear and present danger that the world cannot produce enough copper.'

    Management acknowledged

  • Geopolitical uncertainty and trade barriers

    medium

    Wars, shipping lane fragility, duties, and protective measures create an unstable global environment, impacting shipping costs and market access.

    Kunal Shah: 'There is lots of uncertainty around geopolitics with wars being raised in several regions, something that's going on with Iran right now, the Southeast. So shipping lanes continue to be fragile and high wired. So that's also a risk in terms of container availability, shipping line availability, shipping time and of course, the volatility in shipping costs. ... So having said that, just reflecting back on what are we doing with the customers. So the world is continuing to go put borders, duties, protective measures.'

    Management acknowledged

  • Delays in customer trials and solution adoption

    medium

    Trials for new solution packages are progressing positively but are taking longer than expected due to complexity and technicalities.

    Sanjay Majmudar: 'Only thing is it is taking a little more time given the complexity and the technicalities involved for us to get the results, but we are positively and quite excitedly working towards it.'

    Management acknowledged

Q&A highlights

5 direct
Indian Mining Volumes and Hindustan Copper Opportunity Partial
Sir, it is like, if I've been very honest with you, our fundamental focus in mining is actually in the opportunity outside India. The reason is, we are looking at very large, much, much bigger markets like Latin, where between copper and gold we are talking of at least 0.5 million ton kind of an opportunity on which we are working.

Analyst questioned potential for significant volume growth in India from Hindustan Copper's expansion, but management reiterated strategic focus on larger international mining markets.

Asked by Varun Jain

Forex Impact on Realizations and Margins Direct
Kunal here. So, I think 3, 4 aspects to this, and I think we've shared this over currency conversations in the past. We are not -- don't -- we are not a Indian exporter who benefits or loses on account of the dollar change, because generally our the so first of all, our transactional currency is U.S. dollars. ... But in a way, I don't think you can take our numbers and say currency has gone up 5%, so my margins will go up 5%. Basically, that's what I'm saying. There will be some remnant of a lead lag that will be there for next 2 or 3 quarters. Our endeavor is to make sure that it becomes a cost more rather than a margin conversation.

Clarified that while the company's transactional currency is USD, forex movements are largely pass-through, aiming to maintain competitiveness rather than significantly impact margins.

Asked by Priyankar Biswas

Benefits from EU FTA Direct
We don't sell to Hermès, European luxury houses. Our customers are mines and cement plants. And generally, Europe is not a very active player in these fields. So Europe FTA, by and large we are neutral to it. It does not change anything materially for us.

Management clarified that the EU FTA would have no material impact on their business due to their specific customer base and market focus.

Asked by Priyankar Biswas

Capacity Utilization and EBITDA Growth Partial
So Devang, there are 2 different types of questions that you have posed. The first part is are we linked directly to the fortunes of mining industry? So currently, you said that the prices of commodities are on the rise, does it create a separate set of an opportunity for us? Very honestly, we are a little agnostic to the mining industry cycles. What we are focused on is this conversion opportunity.

Analyst questioned if increased capacity utilization would boost EBITDA, but management emphasized their focus on conversion opportunities and value addition rather than just volume-driven growth.

Asked by Devang Shah

Mill Liner Business Competitors and Conversion Element Direct
There is so conversion is not in the alloy side, while that could also be part of the conversation, we are doing our own design. So the conversion, in a way is where we are moving from whatever is the incumbent design to our design. And when I say our design, it also includes certain other elements that together become a solution.

Clarified the nature of 'conversion' in the mill liner business, distinguishing it from metallurgy-focused conversion in grinding media, and highlighting their design-led solution approach.

Asked by Varun Jain

Recovery of Lost Volumes due to Duties Direct
I mean, listen, these are all protective measures. That's not it's a little speculative to imagine regime changes, duty changes. It is what it is. We have to move forward from here, and focus on what we can action on. I mean, any recovery of volume is linked to changes in duty structures, and that's something that I think are here to stay.

Management indicated that the 75,000-80,000 tons of volumes lost due to duties are unlikely to be recovered soon, as these protective measures are expected to persist.

Asked by Ravi Swaminathan

Closure of Welcast Steels Subsidiary Direct
No sir. See, we have closed that plant, and we have also made disclosures on the Stock Exchanges. The reason is it was a fairly old plant, and we had created significant alternate capacities in our Ahmedabad facility. Correct? So it was not viable for us to invest heavily into that plant and to make it operational, and therefore, we have closed it.

Provided rationale for closing the Welcast Steels plant, citing its age and the availability of alternate capacity, confirming no plans to reopen.

Asked by SP

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Detailed narrative

Q3 and 9M FY26 Financial Performance

AIA Engineering reported Q3 FY26 operating revenue of INR 1,066 crores, contributing to a total top line of INR 1,200 crores. The company achieved a reported EBITDA of INR 425 crores, translating to an impressive 40% margin, with PAT at INR 294 crores. For the nine months ended December 31, 2025, the company recorded a PAT of INR 876 crores and EBITDA of INR 1,241 crores on an operating revenue of INR 3,153 crores. Cash levels remained robust at approximately INR 4,200 crores, reflecting strong financial health.

Capacity and Utilization Update

The company's total capacity has been adjusted to 436,000 tons following the closure of its Welcast Steels subsidiary plant in Bangalore, which accounted for 24,000 tons. This new capacity comprises 314,000 tons of grinding media and 120,000 tons of castings. Current overall capacity utilization stands at 60-65%, with mill liner capacity utilization specifically noted at around 50% for the nine-month period. The current annual run rate is between 250,000 to 260,000 tons, indicating operations below full capacity.

Strategic Focus: Mining Opportunities Outside India

AIA Engineering's primary growth focus is on large mining opportunities outside India, particularly in regions like Latin America, Australia, and Africa. Management highlighted significant potential in copper and gold mining, estimating an opportunity of at least 0.5 million tons. While domestic mining volumes were 5,000 tons in Q3 and 18,000 tons for nine months, the company views international markets as offering substantially larger growth avenues, despite geopolitical uncertainties and trade barriers.

Product Strategy: Solution-Oriented Approach and Trials

The company is actively pursuing a solution-oriented approach, focusing on providing unique liner and high chrome grinding media packages to address critical challenges for mining clients. This strategy aims to improve throughput and reduce operating costs, rather than merely selling products. Several trials for new solution packages are underway, with management noting positive progress, though the complexity and technicalities involved mean results are taking longer than anticipated. The goal is to offer disproportionate value and achieve significant breakthroughs.

Capital Expenditure Plans

For FY26, the company had guided for INR 180 crores in capex, with INR 105 crores already spent. The remaining balance of INR 75-80 crores for Q4 FY26 includes approximately INR 30 crores for a new solar hybrid capacity and INR 50-55 crores for other capex. International expansion plans include establishing facilities in Ghana and China. Land has been procured in Ghana, with clearances expected in Q4 FY26, after which capex for the plant is projected to take 1.5 years. China facilities are also in process, with a small lab set up, and both international facilities are expected to be in place within 1.5 to 2 years.

Impact of Geopolitical Factors and Trade Barriers

Management acknowledged significant geopolitical uncertainties, including ongoing conflicts and shipping lane fragilities, which contribute to volatility in shipping costs and protective trade measures. The company has experienced a loss of 75,000-80,000 tons in volumes over the past 5-7 years due to duties and trade barriers in regions like South Africa, Canada, and Brazil, with no recovery expected in South Africa. Despite these challenges, AIA Engineering aims to maintain competitiveness by treating forex movements largely as pass-through and focusing on value-added solutions.

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