Aarti Industries Ltd. share price target

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...

We recommend to BUY Aarti Industries for a target of INR 630- valuing the company on SOTP basis. Geared for growth with global leadership in Speciality Chemicals: AIL has a strong understanding of chlorine derivative chemistry and has the largest nitro-chlorobenzene capacity in India at 60,000 tonnes per annum. Exports account for 51% of speciality chemicals division. It offers over 100+ products to MNCs globally(globally ranks 1st -5th for most of its key products) having...

Aarti Industries Limited - AARTIIND is one of the largest producers of Benzene-based basic and intermediate chemicals in India and manufactures 125 products with chemistry of benzene, aniline, sulphuric acid, toluene and methanol. AIL is one of the leading global suppliers of dyes, pigments, agrochemicals, pharmaceuticals and rubber chemicals. The company has three reportable segments - Speciality Chemicals, Pharmaceuticals and Home & Personal Care Chemicals. Aarti has 16 manufacturing units spread across Gujarat & Maharashtra and a strong Research & Development with sophisticated instruments & pool of scientists. Aarti has customers spread across the globe in 60 countries with major presence in USA, Europe, Japan & India. Ashika Stock Broking advise their investors to BUY the stock with target price of Rs. 620, valuing at P/E multiple of 13.8x FY18E EPS.

Trendlyne has 4 reports on AARTIIND updated in the last year from 3 brokers with an average target of Rs 650.

Speciality chemicals: Revenues +3.1% YoY with flat volumes on non-availability of nitric acid (on drought conditions). Nitro-Chloro Benzene vol. fell to 12,460T vs 16,400T in Q3FY16 as did hydrogenation volumes. But, growth in other high margin products saw EBIT rise by 15% YoY to INR1.2bn. FY16 Volume rose ~10% YoY with +15% FY17...