Aarti Industries Ltd - Result Update - Geojit

Near term weakness an opportunity...growth story intact

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.

- Q4 revenue declined by 6% YoY, on account of lockdown due to covid-19.
- EBITDA margins declined by 120bps YoY to 20.3% due to lower than expected sales & higher cost.
- Focus on investments in new capacities, product diversification and backward integration has led to margin expansion, which is expected to continue.
- Due to impact of Covid-19, we can expect near term slowdown in growth. Considering, this we downgrade our earnings estimates by 28% & 13% for FY21& FY22E.
- However, execution of multi year contracts, strong off-take from Pharma segments and improved outlook on account of issues in China, will be beneficial.
- We value ARTO at P/E of 28x on FY22E, with a target price of Rs1,151 and upgrade to Buy.

Shares of AARTI INDUSTRIES LTD. was last trading in BSE at Rs.923.95 as compared to the previous close of Rs. 909.35. The total number of shares traded during the day was 26152 in over 1958 trades.

The stock hit an intraday high of Rs. 937.95 and intraday low of 912.75. The net turnover during the day was Rs. 24218076.

Source : Equity Bulls

Keywords