AIA Engineering Ltd : An In-depth Analysis

AIA Engineering Ltd.




Executive Summary

Company AIA Engineering Ltd.
Sector Chrome Castings
Current Promoter Holding:58.47%
FY22 PATRs. 620 Cr.
FY23 PAT Rs. 1056 Cr.
Q3 FY24 PATRs. 280 Cr.







About AIA Engineering LTD.

It is a company, which makes grinding media for cement, and mining companies.  We can call it an FMIG (Fast moving Industrial Goods) company comparable to FMCG companies. The cost is low compared to the total costs but the company needs it to function, hence there is customer stickiness.

The company is into the production of high chrome mils for major plants, hence, there will be customer stickiness as existing customers would like to stick with a quality supplier and the demand is mostly replacement so no one will change suppliers, as the costs are a small part of their overall costs. In addition, the lack of comparable industries also perhaps explains their high ROCE.

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Mr. Rajendra S. Shah-Chairman

Mr. Rajendra Shah, an engineering Graduate in Mechanics, brings his years of experience in entrepreneurship, finance and administration, coupled with entrepreneurial insights to AIA Engineering leadership. Mr. Shah is also the Chairman and Whole-Time Director of Harsha Engineers International Limited, a Bearing Cage producer.



Mr. Bhadresh Shah-Managing Director & Promoter

Mr. Bhadresh Shah, an alumnus of IIT Kanpur, is the founder of AIA Engineering. With strong technical knowledge and immense experience in the fields of production, finance, and technical administration, Mr. Shah focuses on process improvements, new product development, quality, and adherence to international manufacturing standards. His commitment to innovation and quality has made AIA Engineering Ltd. and Vega Industries a world renowned brand today.


The Market Cap of the company is INR 35,879 crores, TTM P/E 31.4 x, profit data given below:

(All The figures mentioned in the table are in INR Cr.)

ParticularsFY22FY23Q3 FY24
Total Revenue 7261245311
Net Profit6201056280




Business Overview:

AIA Engineering stands as a prominent global producer of HCMI (high chrome mill internals), securing the second-largest position in the industry. These mill internals encompass high chrome grinding media (grinding balls), mill liners, and diaphragms, pivotal in the crushing and grinding operations across mining, cement, and thermal power generation sectors. 

Within its product portfolio, high chrome grinding media emerges as the cornerstone, driving approximately two-thirds of the company's total sales, with a primary focus on the mining sector, particularly in copper and gold extraction, supplemented by contributions from the cement and thermal power industries.

While the adoption of high chrome grinding media has gained momentum in the cement sector, accounting for a majority of usage among players, its penetration remains limited to 20 percent in the mining industry, where conventional forged grinding media still dominate. 

Despite the higher cost associated with chrome-based grinding media, ranging from  20 to 40 percent depending on chrome content, the investment is justified by its superior wear, corrosion, and abrasion resistance, along with advantages like increased throughput, reduced power consumption, and customizable features.


In the Indian market, AIA Engineering maintains a dominant market share exceeding 95 percent consistently since its establishment as an independent entity. The manufacturing process relies on raw materials such as scrap metal and ferrochrome. 

The company adopts a proactive approach to pricing, incorporating price escalation clauses in contracts to pass on cost fluctuations to customers with a lag of approximately one to two quarters.

Detailed Review

Q1.What are the Product Solutions and Services offered by the company?

AIA engineering serves 3 main industries : 


  1. Mining - High Chrome Grinding Media,Mill liners, Energy Efficient Pulp Lifter Systems,Revolutionary Solution- Ball Miling System Plus EEPL.
  2. Cement - High Chrome Grinding Media,Mill liners, Vertical Mil liners
  3. Quarry- Blow Bar, Hammer, Impellers, Anvil , Feed Disk, Frame Liners.


  1. Alloy Selection for Wear Reduction.
  2. Installation Support 
  3. Linear Wear Monitoring
  4. Alloy Optimisation for improving metal recoveries
  5. Ball Size Optimisation
  6. Ore Grindability 
  7. Millart
  8. Milaudits









Q2.Who are the major clients of the company ? 


Its clients include large mining and cement companies such as BHP Billiton, Rio Tinto, Vale, Barrick Gold, Holcim-Lafarge, and Heidelberg Cement. 












Q3.What Are the Strategic Priorities of the Company ?

  1. Environmental Compliance: The company is dedicated to minimizing its environmental footprint by adhering to stringent regulations and conducting regular environmental impact assessment.
  2. Process Efficiency: Efficiency in operations is emphasized, particularly in heat treatment and melting techniques, utilizing methods such as the use of piped natural gas, flue gas recuperation, and induction furnaces to minimize energy consumption and greenhouse gas emissions.
  3. Energy Reduction: A focus on reducing energy consumption through measures such as upgrading equipment for higher efficiency, utilizing renewable energy sources like wind energy, and replacing motors with energy-efficient alternatives.
  4. Renewable Energy: A commitment to increasing the share of renewable energy in total consumption, demonstrated through investments in wind and solar energy projects to reduce reliance on fossil fuels.
  5. Emissions Management: Stringent measures are in place to monitor and control emissions, including online stack monitoring systems and emission-free production processes.
  6. Water Management: Efficient utilization and management of water resources for industrial processes, sanitation, and other purposes, ensuring responsible water usage throughout operations.
  7. Waste and Circular Economy: Transitioning towards a circular business model by implementing waste hierarchy principles to reduce, reuse, recycle, and recover waste materials, while ensuring compliance with waste management regulations and exploring opportunities for material reuse and recycling.

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Q4.What is the Geographical Revenue Split of the Company?

Currently the company earns 73 per cent of its revenues through exports and the rest from selling its products in India. The US (12 per cent) and Australia (10 per cent) have been major markets for it, apart from India. The company supplies products in the international markets (about 120 countries) through its wholly-owned subsidiary Vega Industries.

Q5.Where are the manufacturing facilities of the company?

The company has 6 plants and 2 offices spread across 4 cities: Ahmedabad,Nagpur, Trichy ,Bengaluru .

Q6.What are the Future Expansion Plans for the Company?

  1. Capacity Expansion Strategy:
    1. AIA Engineering continues to prioritize capacity expansion to meet growing global demand and provide tailored solutions.
    2. It  recently commissioned a mill liners plant with a capacity of 50,000 TPA to enhance throughput and reduce customer expenses.
    3. Ongoing brownfield capacity expansion project at Kerala GIDC, targeting a grinding media capacity addition of 80,000 MT by December 2024, with an estimated capex of ` 250 Crores.
  2. Manufacturing Operations Restructuring:
    1. Strategic initiatives underway to optimize operational efficiency, including capacity de-bottlenecking, creation of warehouse space, and pattern storage facilities.
    2. ` 200 Crores allocated for restructuring, aimed at enhancing the capability to manufacture specialized parts with precision.
    3. One-time upgradation project at Odhav cluster expected to add 20,000 MT of castings capacity by December 2024.
  3. Commitment to Sustainability:
    1. Intensifying utilization of captive and renewable energy sources with a ` 60 Crores investment in renewable energy projects.
    2. It is dedicated to reducing carbon footprint and ensuring long-term operational sustainability.
    3. All capex plans, including the 250 Crores brownfield expansion and 200 Crores restructuring, to be funded from internal cash accruals.

Q7.What is the Industry Outlook?

  1. Global Economic Landscape:
    1. The post-Covid recovery was marred by geopolitical tensions stemming from the Russia-Ukraine conflict, particularly impacting North American and European economies due to severe inflationary pressures.
    2. However, easing global supply chain issues and reduced shipping rates provided a positive note, with commodity prices gradually stabilizing by the end of the fiscal year.
  2. Resilience in Certain Economies:
    1. Despite global challenges, economies like India and East Asian countries demonstrated resilience, driven by significant infrastructure investments and robust Capex cycles.
    2. India recorded approximately 7% GDP growth in F.Y. 2023-24, with optimistic projections for subsequent years.
  3. Cement Industry Outlook:
    1. Cement industry demand remained robust, especially in regions like India and East Asia, where growth rates are expected to be near double-digit.
    2. Global shift towards high chrome consumable wear parts presents opportunities for growth, with increased market share anticipated.
  4. Mining Sector Analysis:
    1. Mining industry, largely unaffected by geopolitical tensions, witnessed steady growth, particularly in regions like North America, Latin America, Australia, and Africa.
    2. Copper, Gold, and Iron ore markets show bullish trends, driven by increasing demand for renewables/EVs and sustainability initiatives.
  5. Opportunities and Growth Strategies:
    1. Conversion of conventional forged grinding media to high chrome grinding media presents significant growth potential in the mining sector.
    2. Unique patented mill liner technology offers advantages in increased throughput, improved grinding efficiency, and reduced power costs for SAG Mills.
    3. Addressable markets for grinding media and metal mill liners in the mining sector provide ample room for growth and market penetration.

Q8.What are the Key Risks and mitigation strategies for them  Of Company: 

  1. Currency Fluctuation:
    1. High exchange rate volatility poses a significant risk due to the company's extensive export turnover and reliance on imported raw materials.
    2. Mitigation Strategies:
      1. Proactive and adaptive hedging policies aligned with market best practices.
      2. Implementation of dynamic pricing mechanisms to limit the impact of exchange rate fluctuations on receivables and forecasted revenue.
  2. Raw Material Fluctuation:
    1. Fluctuations in raw material prices can impact production costs and profitability.
    2. Mitigation Strategies:
      1. Engagement with customers to pass through most raw material changes.
      2. Utilization of price pass clauses in longer tenure contracts or repricing new offers.
      3. Strategic procurement practices including purchasing raw materials during low price cycles to average out the impact of price fluctuations.
  3. Debtor Defaults:
    1. Risk of default from export customers due to financial instability.
    2. Mitigation Strategies:
      1. Comprehensive credit insurance policies to mitigate risks associated with the financial condition of export customers.
  4. Disruption in Supply Chain:
    1. Potential disruptions in export and import supply chains, particularly due to events like the Ukraine Crisis, leading to increased outward freight costs and working capital requirements.
    2. Mitigation Strategies:
      1. Planning production well in advance to compensate for logistical delays.
      2. Maintaining higher inventory levels in warehouses of countries with disrupted supply chains to ensure timely delivery.
      3. Negotiating midterm contracts with shipping lines to control costs.
      4. Collaborating with customers to establish contracts on FOB Plus Actual Freight terms to manage volatile freight costs effectively.

Q9.How has the Company Performed Financially in the past?: 




Q10.Who all are the competitors of the company ?

  1. Bharat Forge Ltd:(Mkt.Cap: Rs.54,550.69 Cr)
    1. Bharat Forge is a leading global player in the forging industry, offering a wide range of products for sectors like automotive, industrial, and oil & gas.
    2. The company is known for its expertise in forging technology and has a strong presence in both domestic and international markets, serving reputed customers across the globe.
  2. CIE Automotive India Ltd:(Mkt.Cap: Rs.18,182.84 Cr)
    1. CIE Automotive India is a subsidiary of CIE Automotive, a global supplier of automotive components and sub-assemblies.
    2. The company specializes in the design, development, and manufacturing of automotive parts such as chassis and powertrain components, catering to OEMs and Tier 1 suppliers in the automotive industry.
  3. TVS Holdings Ltd:(Mkt.Cap: Rs.16,551.88 Cr)
    1. TVS Holdings is the holding company of the TVS Group, a renowned conglomerate with diversified business interests including automotive, finance, electronics, and logistics.
    2. The group's flagship company, TVS Motor Company, is one of the largest two-wheeler manufacturers in India, and TVS Holdings oversees the strategic direction and investments of the entire group.
  4. Ramkrishna Forgings Ltd:(Mkt.Cap: Rs.12,769.13 Cr)
    1. Ramkrishna Forgings is a leading manufacturer of forged and machined components for the automotive, aerospace, and other industrial sectors.
    2. The company has a strong focus on technology and innovation, offering a wide range of products catering to diverse customer requirements in domestic and international markets

Q11.What is the Future Outlook of the Company?

AIA Engineering has a dominant position in the chrome grinding media space after Magotteaux with sales volumes of around 2,91,000 tonnes (FY23). As currently, only 20-25 per cent of the grinding mill internal space is covered by the chrome grinding internals in mining industry, there is an addressable market opportunity of 2-2.5 million tonnes of conversion, which provides significant headroom for growth.

To capitalise on conversion, the company has planned to incur a total capex of ₹500 crore till FY25 of which ₹300 crore will be done in FY24. With 80,000 tonnes capacity enhancement project on Kerala JIDC plant and debottlenecking certain plants, which can add 15,000-20,000 tonnes of capacity, the company aims at expanding its production capacity from the current levels of 4,40,000 tonnes to 5,40,000 tonnes by the end of FY25.

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