Aarti Industries Ltd. share price target

Growth in Specialty Chemical Industry, Well Diversified Portfolio and Global Presence, Benzene business; the cash cow, Toluene value chain to drive growth, Pharma at inflection point

EBITDA grew by 39% YoY, whereas EBITDA margin improved by 150bps YoY to 19.5% due to high margin product mix. Capacity addition, focus on high margin products and robust off-take...

Thanks to higher raw material prices and increasing share of high margin products, Aarti's speciality chemicals gross revenues rose 50.4% (volume growth just 10%) to Rs 1039.10 crs ($148.4m), probably the highest level ever; nitrochlorobenzene production barely budged last quarter , underscoring impact of high value addition and pass-through of higher raw material prices. Despite MTM loss of Rs 22.59 crs ($3.2m) on forward contracts, EBIT margin surged to 20.2% from 18.6% in the same period a year back (17.5% in Q1FY19). Volume off take was scarcely suppressed by...

AARTI Industries Ltd (ARTO) is a global leader in Benzene based derivative products. Has a diversified product portfolio with end users in pharma, agrochemicals, specialty polymers, paints & pigments....

AARTI Industries Ltd (ARTO) is a global leader in Benzene based derivative products. Has a diversified product portfolio with end users in pharma, agrochemicals, specialty polymers, paints & pigments....

AARTI Industries Ltd (ARTO) is a global leader in Benzene based derivative products. Has a diversified product portfolio with end users in pharma, agrochemicals, specialty polymers, paints & pigments. Q4FY18 Revenue robust 23%, while PAT grew by 14% YoY. EBITDA margins declined by 80bps YoY to 17.5% due to higher raw material cost and other expenses. Long term supply contracts of value added agro chemical is expected provides higher growth opportunities....

Stable volume growth in specialty chemical segment Specialty chemical volumes in Q4FY18 were marginally affected due to subdued demand from the Agrochemical sector. However the management foresees the trend to reverse in FY19 and expects demand from Agrochemical sector to rebound. During the quarter production of nitrochlorobenzene stood at 17,800 tons compare to 16,500 tons in Q4FY17 and 68,800 tons for FY18, implying a capacity utilization of 92% for full year. AIL's nitrotoluene facility reached 40% utilization level since its commissioning in Sep2017 during Q4FY18, which the management expects to be ramped up to at least 80% by FY20.The management expects speciality chemicals volume to grow at 12-15% in FY19 on...

We recently met Chetan Gandhi, CFO of Aarti Industries (Aarti), to gain an insight into the speciality chemical space, the unwinding of the China story and the company's position in the value chain. Aarti is a technocrat run, chemical conglomerate established in 1984. It operates primarily in three segments viz. speciality chemicals (~81% of sales), pharmaceuticals (~14% of sales) and home & personal care (~5% of sales). Over three decades of indigenous R&D;, the company has mastered the Nitro Chloro Benzene chemistry with installed capacity of...

Nifty (10895) Nifty witnessed a staggering leap on Friday and registered a record high level 10906 by breaching crucial psychological level at 10850 on a closing basis. Some positive triggers like better than expected earnings, a cut in GST rates on 83 goods and services, consideration on allowing 100% FDI in the banking sector, and easing of fiscal deficit worries after lowered borrowing requirements have lifted the sentiments in the market. The sectoral indices depicted bullish tone as all the leading indices closed in green. Amongst them BANKING, FINSERVICES and REALTY closed with the gains of over a percent. The market breadth turned slightly bullish, as 907 shares advanced while 880 shares declined on NSE. The FII and DII both were buyers with a net inflow of Rs.988crores and Rs.210crores respectively. The broader markets outperformed the frontline index, as both Midcap and Smallcap...

Underpinned by higher capacity utilization, launch of some intermediates and increased supplies from the caffeine plant, Aarti's pharmaceuticals business in Q2 reported the highest revenue growth in at least six quarters. Thanks to increased benefits of operating leverage, EBIT margins soared to the highest level in at least ten quarters - 13.9% Vs 11.9% in Q2FY17 Vs 12..8% in Q1FY18. Despite miraculous jump in home...

to Rs 631 mn due to higher depreciation and interest expenses and rupee appreciation impact of Rs 40mn to 50mn. Overall volumes in the specialty chemical segment grew at lower pace by 3% YoY in Q1FY18; Underlying this was the impact of a periodical shutdown in company's acid production facility Sector Outlook...

AARTI Industries Ltd (ARTO) is a global leader in Benzene based derivative products. Has a diversified product portfolio with end users in pharma, agrochemicals, specialty polymers, paints & pigments....

AARTI Industries Ltd (ARTO) is a global leader in Benzene based derivative products. Has a diversified product portfolio with end users in pharma, agrochemicals, specialty polymers, paints & pigments. Q4FY17 Revenue grew by 20% YoY however PAT growth was limited to 7% YoY due to lower EBITDA margins. EBITDA margins declined by 140bps YoY to 18.3% due to higher rawmaterial cost. Going forward, management focus on high margin products, forward...

Stable volume growth in specialty chemical segment The pharmaceutical segment posted flattish (-0.1% YoY) growth with 14.3% revenue contribution in Q4FY17. EBIT for the segment grew at 6% to Rs149mn with identical margin of ~12%. Since major fixed costs already built-in incremental volumes will result in significant increase in segment profits. We...

Despite timid revenues, earnings increased by 27.1% in 9MFY17 all thanks to higher operating margins (+250 bps to 22%) and lower tax provision. EBIT margins thickened for all but HPC business but not without noticeable volatility, particularly for pharmaceutical business. Unsurprisingly, EBIT margins of specialty chemicals has expanded for at least eight quarters (y-o-y though) - thanks to mellowing benzene prices fallen from Rs 85 per kg in Q2FY15 to Rs 40 per kg in Q4FY16, while pharmaceutical margins has not been one without variation. Entrenched weakness in agro-chemical sector pummeled specialty...

Stable volume growth in speciality chemical segment Speciality chemical volumes in Q3FY17 were marginally affected due to subdued demand from the Agrochemical sector. However the management foresees the trend to reverse in FY18 and expects demand from Agrochemical sector to rebound. The company expects volumes to grow of ~10% in...

most competitive benzenebased specialty chemical companies in the world with 125+ products offerings. It has wide range of customer domestically (500+) and globally (150+). Moreover,itsintegratedproductsmixmakesitaPartnerofchoicebyvariousmajorglobal and domestic customers which is evident from the fact that >80% of FY16 revenues were...