AIA Engineering Limited

“AIA Engineering is a structurally sound compounder with a genuine switching-cost moat in high-chrome grinding media, debt-free balance sheet with ₹4,500+ crore net cash, and 22-25% ROIC on operating capital — but at 31x trailing P/E the expected 10-year IRR of ~8-9% offers adequate rather than exceptional returns; the primary risks are Chinese quality convergence compressing margins and mining conversion pacing that consistently lags management guidance, while capital allocation weakness (persistent cash hoarding with no return framework) dilutes per-share compounding; the business deserves a watchlist position pending a 20-25% correction or evidence of accelerating mining conversion volumes.”