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...