Q3FY21 Result Update - Aarti Industries - ICICI Direct

Aarti Industries' Q3FY21 revenues grew 9.5% YoY to Rs. 1186.8 crore, mainly due to 31.8% growth in pharma segment to Rs. 232.2 crore. Speciality chemical revenues grew 3.5% YoY to Rs. 1078.8 crore, lower than I-direct estimates of Rs. 1162.7 crore. EBITDA margins improved 55 bps YoY, 233 bps QoQ to 24%. Improvement in gross margins by 303 bps YoY, 339 bps QoQ was partially offset by increase in other expenditure. EBITDA grew 12.1% YoY to Rs. 285 crore. PAT grew 18.2% YoY to Rs. 165.3 crore. Delta vis-à-vis EBITDA was mainly due to lower interest cost.

Valuation & Outlook

Speciality chemical segment margins were restored amid growth revival in domestic market. The company has reiterated flattish net profit guidance for FY21 and double digit growth from FY22. Leveraging on core knowledge of benzene-based derivatives, the company is continuously expanding product basket towards value added products up the value chain. In pharma, strong growth is expected from developed markets backed by integrated model and new launches. Margins are also expected to improve due to incremental addition of high-value products. We like the company's leadership position and strong visibility on order book. We maintain BUY with a TP of Rs. 1340 (22x of FY23E EPS of Rs. 56.1) vs. earlier target price of Rs. 1235.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_AartiInds_Q3FY21.pdf

Shares of AARTI INDUSTRIES LTD. was last trading in BSE at Rs.1160 as compared to the previous close of Rs. 1140.85. The total number of shares traded during the day was 41906 in over 3721 trades.

The stock hit an intraday high of Rs. 1193 and intraday low of 1138. The net turnover during the day was Rs. 48854771.

Source : Equity Bulls

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