Buy AIA Engineering: target of Rs 2043: ICICI Securities

ICICI Securities research report on AIA Engineering

AIA Engineering (AIAE) has finally reached a settlement with respect to the case filed against it by Magotteaux, for patent infringement relating to Sintercast products. As per the full and final binding settlement: 1) Magotteaux agrees never to litigate this issue before any other forum; 2) all proceedings and claims, including related damages, are fully and finally settled; 3) AIAE cannot claim the litigation expense from Magotteaux. Currently, the contribution from technology under consideration is <10% of AIAE’s overall revenues and the company has moved to a more advanced technology.

Outlook

Given the medium to long term growth drivers and continuation of mill liner capex plans despite the Covid-related slowdown, we maintain BUY on the stock with an unchanged target price of Rs2,043.

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