Aarti Industries Ltd. share price target

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...

US business remains lackluster; extension of acute season led to healthy performance in Domestic market We expect the companies under our pharmaceuticals coverage to report revenue growth of 5.4% in Q3FY20 with 12.6% growth in profitability, driven by strong traction in India and API business. The US revenues are expected to decline by 1.6% YoY , mainly due to high base and lack of meaningful launches. However, strong ramp-up in gTamiflu and steady base business performance in some US focused players can surprise on positive side. Regulatory hurdles continue to impact as the sector received nine warning letters during CY19. With respect to domestic markets, the growth is likely to favour companies with larger presence in acute therapy led by extended acute season. Growth in...

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. We upgrade ARTO to Accumulate from Reduce, given strong earning visibility of 20% CAGR over FY19-21E....

In Q1FY20, Aarti Industries reported std. revenue of Rs. 1,086cr flat YoY, down 10% Q-o-Q), EBITDA of Rs. 241cr (up 26%/2% Y-o-Y/ Q-o-Q resp). PAT for the quarter stood at Rs. 137cr (up 54%/10% Y-o-Y/Q-o-Q resp).

Stifled by slowdown in exports more so in the automobile segment, revenues of specialty chemicals grew by a dismal 5.5% last quarter - though on constant raw material prices the increase by ~9%. Yet revenues from its not so large pharmaceutical business rose by a sturdy 27.7% to Rs 191.14 crs...

Aarti Industries Ltd (AIL), for Q1FY20, reported steady set of numbers. Revenue has grown by 8.8% (on adjusting HPC business revenue) mainly due to higher utilisation across all segments. EBITDA grew by 26.1%YoY to INR2.36bn with 439bps improvement in margins to 21.7% on account of increasing share of value added and high margin products. Net profit grew at a higher pace of 53.9% to...

Given strong demand outlook in domestic & export market in the long term, the capacity augmentation is on track. We believe that capacity addition, focus on high margin products and robust off-take from Specialty chemicals and Pharma segment, will continue to drive profitability. However, given weak macro economic situation and slowdown in...

In Q4FY19, Aarti Industries reported std. revenue of Rs. 1,211 Cr (up 18% Y-o-Y, down 4% Q-o-Q), EBITDA of Rs. 238 Cr (up 31% Y-o-Y, down 4% Q-o-Q). PAT for the quarter stood at Rs. 125 cr (up 47% Y-o-Y, down 6% Q-o-Q).

Q4FY19 Revenue & PAT grew by robust 18% & 47% YoY led by broad based growth across segments. EBITDA grew by 31% YoY, whereas EBITDA margin improved by 200bps YoY to 19.5% due to high margin product mix. To invest Rs1,200cr for capacity augmentation in FY20E given strong demand outlook in domestic & export market....

Aarti Industries Ltd (AIL), for Q4FY19, reported strong set of numbers. Revenue has grown by 17.7% mainly due to healthy performance across all segments. EBITDA grew by 31.4%YoY to INR2,369mn with 205bps improvement in margins to 19.6% on account of increasing share of value added and high margin products. Net profit grew at a higher pace of 46.9% to INR 1245mn, due to slower growth in depreciation and interest expenses bolstered by operationally strong performance. Overall volumes in the specialty chemical segment grew by 3% YoY in Q4FY19 (FY19: 8%); For FY20, the management has guided for midteen volume growth. Moreover, they have alluded an increase in realization in many of the products leading to a better margin profile, which would aid in supporting growth going...