AIA Engineering

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.

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.

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.

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.

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.

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.