AIA Engineering Limited — Q4 FY25 earnings call

Call held 23 May 2025

Management summary

AIA Engineering reported a resilient financial performance for Q4 and FY25, achieving a full-year sales volume of 255,000 tons and revenue of INR 4,200 crores. Despite a 14% YoY topline decline, the company maintained strong profitability with an FY25 EBITDA margin of 35.52%, limiting profit degrowth to 6.5%. Strategic global expansion is a key focus, with new plants planned in China and Ghana to address logistics challenges, while the company actively manages the impact of global macro-economic volatility and US trade tariffs.

Highlights

  • Q4 FY25 Sales Volume: 68,741 tons, contributing to a full-year volume of 255,000 tons.

  • Q4 FY25 Revenue: INR 1,141 crores, with full-year revenue at INR 4,200 crores.

  • Q4 FY25 EBITDA: INR 399.52 crores, leading to a full-year EBITDA of INR 1,492 crores.

  • FY25 EBITDA Margin: A robust 35.52%, demonstrating strong margin management.

  • FY25 Topline degrowth of 14% YoY, while Profit degrowth was limited to 6.5% YoY.

  • Strategic capacity expansion underway with new plants in China and Ghana to mitigate freight issues and improve supply chain.

  • Navigating global macro events and specific trade barriers, including US antidumping duties of 9.6% (ADD+CVD) plus Section 232 tariffs.

  • Mill liner business performing well, with increased stake in Australian company to 59%.

Concerns

  • Global Macroeconomic Volatility & Geopolitical Issues

  • US Antidumping and Section 232 Tariffs

Key financials

2 periods

Q4

  • Sales Volume
    68,741 tons
  • Revenue
    ₹1,141 Cr
  • EBITDA
    ₹399.52 Cr
  • PAT
    ₹285 Cr
  • EBITDA Margin
    35%

FY25

  • Sales Volume
    2,55,000 tons
  • Revenue
    ₹4,200 Cr
    YoY -14%
  • EBITDA
    ₹1,492 Cr
  • PAT
    ₹1,060 Cr
    YoY -6.5%
  • EBITDA Margin
    35.5%

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.

Segment breakdown

  • Non-Grinding Media (Mill Liners, etc.)
    30% Share of Volume25% Share of ValueINR 130-140 to INR 230-250 Rs Realization per Kilo

Order book

low confidence
Management mentioned working on several mines and projects but did not quantify a specific order book value for the quarter or future periods, citing global volatility.

Source: Inferred

Capital allocation

high confidence
  • Capex ₹120 Cr
    • Renewable power, India plants maintenance, land ₹120 Cr
    • New plants in China and Ghana (over 2-2.5 years)
    Outside of these two projects, we're looking at about INR120 crores, INR130 crores of capex, which is largely some amount of renewable power, balance capex for work that we have done in our plants in India, some amount of maintenance capex and some land. So these are all -- all can be rolled up as a maintenance capex for this year. So around INR100 crores, INR120 crores, INR130 crores for that. And plus we will be spending over the next 2, 2.5 years on the two plants in one in China and one in Ghana.
  • M&A Australian company Acquisition · Closed

    Strengthening mill liner business

    Increased stake to 59%

    As we speak, we have also increased our stake in that Australian company to 59%.

Guidance & targets

Volume

  • Annual volume addition Volume · Per annum (directional for FY26) · Medium confidence 25,000 to 30,000 metric ton addition per annum
    I would not want to pinpoint any particular reason. But one, let me assure you one thing that we are not going back on that target. That is point number one. But what we thought that as we speak as compared to last quarter, again, so many things have happened in this world and things continue to happen. You agree with me? Correct? ... But I'm very clear. I'm not going back on what I said last quarter. There should not be any other inference.

    — Sanjay Majmudar

  • Recovery of lost volume from specific customers Volume · in a quarter's time (for large customer), rolling 12-month basis (for total) · Medium confidence 8,000 to 10,000 tons
    We lost about 8,000 to 10,000 with 2 customers, 2 or 3 customers last year over 12 months. So rolling basis, that volume should come back. I think the one which was a larger customer, I think in another max 1 quarter gets back to original consumption pattern. I think that's 1 quarter away. The other 2, I mean, either are in the process. I think, let's say, in a quarter's time, at least that volume on a rolling 12-month basis, we are hopeful will reset about 8,000 to 10,000 tons.

    — Kunal Shah

Capacity

  • China plant operationalization Capacity · by the end of this fiscal (FY26) · Medium confidence First phase operational
    And we expect China to be on ground and start getting at least the first phase operational by the end of this fiscal. That is our target as we speak.

    — Sanjay Majmudar

  • Ghana plant approvals Capacity · next 3 or 4 quarters · Medium confidence Approval work will be done
    And the Ghana plant, so in the next 12 months, we have -- in the next 3 or 4 quarters, a lot of that approval work will be done and then it will go into the execution and then the commissioning.

    — Kunal Shah

What to watch in Q1 FY26

China plant operational status

By end of FY26
Current Under construction/approvals
Target First phase operational

Why it matters

This is a key milestone for strategic capacity expansion and global footprint, impacting future revenue and market reach.

And we expect China to be on ground and start getting at least the first phase operational by the end of this fiscal. That is our target as we speak.

Risks & concerns

  • Global Macroeconomic Volatility & Geopolitical Issues

    high

    Global upheaval, wars, shipping issues, geopolitical issues, and tariff measures are impacting long-range planning assumptions.

    Management acknowledged

  • US Antidumping and Section 232 Tariffs

    high

    A 9.6% dumping duty (including CVD) and Section 232 tariffs are applicable in the US, with customers currently paying, but future impact is uncertain due to policy shifts.

    Management acknowledged

  • Shipping & Logistics Volatility

    medium

    Freight anxiety, container unavailability, and volatile shipping times (e.g., Red Sea issues) have been a constraint, driving the strategy for new plant locations.

    Management acknowledged

  • Policy Shift in US

    medium

    There is a lot of policy shift in regards to the U.S., leading to uncertainty and making it difficult to crystal gaze future outcomes.

    Management acknowledged

Q&A highlights

6 direct
US Antidumping Duty (ADD) and Countervailing Duty (CVD) Direct
So for U.S., there is a dumping duty now applicable at 9.6%, including CVD. There's the ADD and CVD both put together at 9% plus. And there is a tariff. Our product falls under the Section 232 tariffs. So there is a duty that's under that.

Clarifies the specific duties applicable in the US market, which is a significant trade barrier for the company.

Asked by Bhoomika Nair

FY25 Sales Volume to US Geography Partial
U.S. is an important market, but it is not it is less than, I would say, 8%, 10% of the total volume, broadly, I'm saying, okay? So the materiality is there or not there, right, either whichever way you look at it.

Management avoided giving specific US sales volume, indicating sensitivity or a reluctance to disclose granular data on this impacted market.

Asked by Bhoomika Nair

FY26 Volume Outlook and Conversion Momentum Partial
I would not want to pinpoint any particular reason. But one, let me assure you one thing that we are not going back on that target. That is point number one. But what we thought that as we speak as compared to last quarter, again, so many things have happened in this world and things continue to happen... But I'm very clear. I'm not going back on what I said last quarter. There should not be any other inference.

Management is hesitant to provide specific FY26 volume guidance due to global volatility, despite maintaining a directional commitment to prior targets, signaling ongoing uncertainty.

Asked by Chirag

Mill Liner Business Performance and Outlook Direct
No, I think it has been doing very well. A lot of focus, a lot of investment is going in that business, and we remain very bullish on that. As you are aware, we have already made some further expansions in that particular business and investment in that facilities. So we are working very hard on approaching this business on multiple fronts. As we speak, we have also increased our stake in that Australian company to 59%.

Highlights the strong performance and strategic importance of the mill liner business, including increased investment and stake in an Australian company, indicating future growth focus.

Asked by Chirag

Rationale for China and Ghana Investments Direct
So idea was that we have seen last 3 years, we've made we have furthered our solutions in terms of the ability of our consequences. We've been hamstrung by a few things. One of the things has been freight, right? There's a large implication on the transit time... So for our plant in China, for example, our transit times are half to everywhere in the world than what it is from India.

Explains the strategic shift to global manufacturing to mitigate freight issues, reduce transit times, and improve supply chain visibility, moving away from a single-location strategy.

Asked by Bhavin Vithlani

Realization Difference between Grinding Media and Mill Liners Direct
So there is about 12, 13 suite of products that we do under the non-grinding media. And that overall is about 30% of the volume, broadly, I'm saying. 25% by volume comes over there... my non-grinding media could be from INR130, INR140, it can go right up to INR230, INR250, okay?

Provides insight into the product mix and the significantly higher realization per kilo for non-grinding media products, indicating potential for value-added growth and margin expansion.

Asked by Bhavin Vithlani

South America Market Entry (Chile) Direct
Yes, yes. That could be a material game changer for us. And it will be it will sound repetitive to say that, but we are very hopeful that we get a breakthrough soon, but we'll just have to wait for it, right? It's been a long chase and effort.

Highlights a key strategic growth market (Chile/South America) with significant potential for copper production, where the company is actively pursuing breakthroughs, which could be a 'material game changer'.

Asked by Bhavin Vithlani

Volume Loss due to Inventory Correction Direct
We lost about 8,000 to 10,000 with 2 customers, 2 or 3 customers last year over 12 months. So rolling basis, that volume should come back. I think the one which was a larger customer, I think in another max 1 quarter gets back to original consumption pattern.

Provides specific quantification of past volume loss due to customer-specific issues and a timeline for its expected recovery, offering clarity on a drag on past performance and future volume outlook.

Asked by Bhavin Vithlani

2 min read 5 chapters

Detailed narrative

Q4 & FY25 Financial Performance Overview

AIA Engineering concluded FY25 with a sales volume of 255,000 tons, including 68,741 tons in Q4. Full-year revenue stood at INR 4,200 crores, with Q4 contributing INR 1,141 crores. Despite a 14% year-on-year degrowth in topline, the company managed to limit profit degrowth to 6.5%, showcasing strong margin resilience. FY25 EBITDA reached INR 1,492 crores (Q4: INR 399.52 crores), translating to a robust EBITDA margin of 35.52% for the year.

Strategic Global Capacity Expansion

The company is actively pursuing strategic capacity expansion with new plants in China and Ghana, each planned for 50,000 tons. The China plant is expected to have its first phase operational by the end of FY26, while the Ghana plant's approval work is anticipated to be completed within the next 3-4 quarters, followed by execution. These expansions, along with an annual capex of INR 120-130 crores for renewable power, maintenance, and land in India, aim to mitigate freight issues and improve supply chain efficiency.

Navigating US Antidumping Duties and Global Trade

AIA Engineering is currently facing a 9.6% antidumping duty (including CVD) and Section 232 tariffs in the US market. While customers are currently absorbing these costs, the company acknowledges significant policy shifts and uncertainty, hoping for stabilization of tariff structures within the next 1-2 quarters. Management highlighted that the US market constitutes less than 8-10% of total volume, and they are actively defending their positions in various jurisdictions against these trade barriers.

Mill Liner Business and Product Mix Strategy

The mill liner business, categorized under non-grinding media, is performing well and is a key focus area for investment and expansion. This segment, which includes vertical mill parts, quarry parts, and cement mill castings, accounts for approximately 30% of total volume and 25% of value. Realizations for non-grinding media products are significantly higher, ranging from INR 130-140 to INR 230-250 per kilo, compared to grinding media, indicating a strategic focus on value-added offerings. The company also increased its stake in an Australian company to 59% to bolster this segment.

South America Market Entry and Volume Recovery

The company views the South American market, particularly Chile, as a 'material game changer' due to its significant copper production. Despite a long pursuit, management is hopeful for a breakthrough in this region within the next two quarters. Additionally, AIA Engineering expects to recover 8,000-10,000 tons of volume lost over the past year due to customer-specific inventory corrections, with a large customer expected to return to original consumption patterns within the next quarter, contributing to overall volume growth.

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