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Aarti Industries: Multi-year contract opportunity intact

The third multi-year contract and the NCB (Nitro Chloro Benzene) capacity expansion project for Aarti Industries are expected to get completed in FY23

June 01, 2022 / 02:25 PM IST
Aarti Industries: Multi-year contract opportunity intact

The near-term outlook of Aarti Industries is governed by traction in the two long-term contracts and the commencement of the USFDA facility. Source: Shutterstock

PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

The Q4 sales of Aarti Industries (CMP: Rs 761; Market Cap: Rs 27,552 crore) grew by 50 percent helped by the pass-through of raw material price increase and volume gains. This was despite the shortage of key raw material Nitric Acid,  which impacted speciality chemicals sales. Sequentially, the numbers are not comparable due to the exceptional gain of termination income in Q3 because of the cancellation of the first long-term contract. Excluding termination income, sequentially sales growth was flattish but...

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