Aarti Industries Ltd. share price target

EBITDA de-grew by 12.7% to `2189mn on account of lower topline and EBITDA margins contracted by 163 bps to20.3% on account of higher other expenses and higher employee expenses as % to sales. Employee expenses and Other expenses % to sales stood at 7.3% & 20.7% respectively in Q4FY20 compared to 6.8% & 18.9% in Q4FY19. However, contribution from Chlorination and Nitration stands at 25% while...

operational performance, c) higher other income and d) exceptional gains of Rs760mn. 2HFY20 against 18.8% in Q4FY19. PAT declined by 11.9% to Rs1,104mn in Q4FY20. However, the is expected to be better than 1HFY20 with reasonable growth in exports and presence of levers full year fiscal performance of FY20 is far better. The company reported revenue and for margin improvement. However, we believe current valuations already discount most of the EBITDA growth of 0.4% & 1.3% respectively in FY20. EBITDA margins reported minor...

Next leg of Aarti's growth will ride on three long-term contracts worth Rs150bn, first of which has started from Q4FY20 and second from H2FY21E. We leave the estimates largely unchanged for FY21/22E. AIL's near term...

Specialty Chemicals (SC) segment to benefit in near term due to COVID-19 led supply disruptions: With outbreak of coronavirus causing prices of some chemical to move upwards due to short supply that could be positive for Aarti Industries SC division in the near term.

Impacted by shortage of nitric acid, Aarti Industries reported no small stress in its speciality chemicals business EBIT margins for it shrunk to 20.6% in Q3 from a gravity-defying 23.9% in Q2, resulting in flat lining of its EBIT. Wherefore, NCB production plunged 16.1% to 14900 tons while Aarti could churn out just 1666 tons of nitro toluene last quarter when compared to 4000 tons in the same quarter a year ago. Volumes barely showed any buoyancy...

Revenue from pharma business grew by 3% YoY. Notably, the segment recorded its highest therapies i.e. antihypertensive, cardiovascular, oncology and corticosteroids etc. The company also has a strong pipeline of approvals and visibility to maintain growth momentum. Segmental EBIT grew by 20% YoY in 3QFY20, and we expect similar growth in 4QFY20E as well. Specialty Chemical Biz Slight Decline in Margin...

Revenue from pharma business grew by 3% YoY. Notably, the segment recorded its highest therapies i.e. antihypertensive, cardiovascular, oncology and corticosteroids etc. The company also has a strong pipeline of approvals and visibility to maintain growth momentum. Segmental EBIT grew by 20% YoY in 3QFY20, and we expect similar growth in 4QFY20E as well. Specialty Chemical Biz Slight Decline in Margin...

Specialty Chemical division to benefit owing to Coronavirus outbreak in China as it could accelerate the shift of supply chain to India from China

operations include APIs, intermediates and Xanthene derivatives. It has 11 plants for specialty chemicals and 4 for pharma (2 USFDA and 2 WHO/ GMP). Further, another 2 projects are coming at Dahej SEZ and setting up...

AARTI Industries Ltd (ARTO) is a global leader in Benzene based derivative products. The company has a diversified product portfolio with end users in pharma, agrochemicals, specialty polymers, paints & pigments. Q3 revenue declined by 4.5% YoY, as realisation were lower on account of decline in raw material prices (RM)....