AIIL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:14 pm

Fundamental Rating: 4.2

📊 Financials: AIIL demonstrates strong fundamentals with high ROE (34.1%) and ROCE (30.8%), reflecting excellent capital efficiency. EPS at ₹237 indicates robust earnings power. Debt-to-equity ratio of 0.17 shows low leverage, ensuring financial stability. However, quarterly profit declined (-9.38% QoQ), which needs monitoring.

💹 Valuation: Current P/E of 12.2 is significantly below the industry average of 21.2, suggesting undervaluation. P/B ratio (~3.0) is reasonable given book value of ₹954. PEG ratio of 0.14 indicates strong earnings growth potential relative to valuation. Intrinsic value appears higher than current price, offering margin of safety.

🏭 Business Model: AIIL operates with a diversified industrial portfolio, leveraging scale and efficiency. Strong return metrics highlight competitive advantage in cost management and profitability. Moderate debt ensures flexibility for expansion while maintaining healthy cash flows.

📈 Entry Zone: Attractive accumulation zone is around ₹2,600–₹2,750 (near DMA 200 and support levels). Current price ₹2,904 is above DMA 50 and DMA 200, suggesting bullish momentum. RSI at 49.1 indicates neutral trend, while MACD (-31.2) signals short-term weakness.

🕰️ Long-Term Guidance: Strong fundamentals and undervaluation make AIIL a good candidate for long-term holding. Accumulate near support levels for better risk-reward. Despite short-term profit decline, long-term prospects remain positive given efficiency and strong return metrics.

Positive

• High ROE (34.1%) and ROCE (30.8%) indicate strong capital efficiency 💪
• Low debt-to-equity ratio of 0.17 ensures financial stability 💰
• Undervalued compared to industry P/E, offering margin of safety 📉
• Strong institutional interest with FII holdings up 6.17% 📊

Limitation

• Quarterly profit declined (-9.38% QoQ), raising short-term concerns ⚠️
• Dividend yield at 0.04% is negligible 💵
• Trading volume relatively low compared to average, indicating weaker liquidity 📉

Company Negative News

• Quarterly PAT dropped from ₹941 Cr. to ₹765 Cr., reflecting short-term earnings pressure 📉

Company Positive News

• Strong FII inflows (+6.17%) show growing foreign investor confidence 🚀
• DII holdings also increased (+0.09%), adding domestic support 📊

Industry

• Industry P/E at 21.2 indicates moderate valuation compared to AIIL’s attractive P/E of 12.2 📊
• Sector benefits from strong demand and efficiency-driven growth 🏭

Conclusion

⚖️ AIIL is a fundamentally strong company with excellent return metrics and undervaluation relative to peers. Despite short-term profit decline, its low debt and strong institutional interest make it a solid long-term investment. Best strategy is to accumulate near ₹2,600–₹2,750 and hold for sustained growth.