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Aarti Industries Q2: Margin profile stands out; buy on dips

November 19, 2019 / 11:42 AM IST
Aarti Industries Q2: Margin profile stands out; buy on dips

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

Highlights - Q2 results hurt by weaker demand and one-offs - Beneficiary of increasing share of value-added specialty chemicals - Near-term outlook fades on weak outlook for downstream industries - Multi-year contracts provide long-term revenue visibility Aarti Industries' September quarter results are symptomatic of the current trend in the chemical sector which is plagued by volume contraction, lukewarm demand and severe price erosion. Many companies in a similar situation have been reporting a decline in operating margin. But Aarti Industries has been an outlier. Aarti’s steady operating margin stems partly from stable...

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