AIA Engineering defers second phase of greenfield capacity expansion, stocks ends ~3% lower

The company's operations had been affected after the Covid-19 outbreak in India in March.

May 27, 2020 04:05 IST India Infoline News Service

AIA Engineering Limited informed the exchanges Wednesday that it has decided not to break ground on the second phase of greenfield capacity expansion of 50,000 Mt of Grinding Media. This will most likely be deferred to the next fiscal year due to Covid-19 impact.

“The company is in the midst of setting up Greenfield plant for the manufacture of Mill Lining with work and spend done on the same in FY 2019-20. We will continue on this project in this fiscal year with an estimated spend of INR 150 crs in FY 2020-21 with likely commissioning before March 2021,” it said in a release.

The company operations had been affected after the Covid-19 outbreak in India in March. It resumed partial operations last month and manufacturing was operationalized in a staggered and restricted manner and is now at 70% next capacity utilization.

“As a strategy, we maintain stock at many locations closer to plants and we are able to service customers from these warehouses,” it added.

The company has seen lower off take in the months of April and May and hopes soon things will revert to normal.

AIA Engineering Ltd traded at Rs1,600.80 down by Rs47.25 or 2.87% from its previous closing of Rs1,648.05 on the BSE.

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