Edelweiss Securities is bullish on Aarti Industries has recommended Buy rating on the stock with a target price of Rs 1360 in its research report dated February 5, 2018.
Edelweiss Securities' research report on Aarti Industries
Aarti Industries (AIL) reported strong numbers for Q3FY18, primarily driven by pick up in specialty chemicals business (8% volume growth) with PAT beat by 9%. We see solid revenue growth visibility for AIL post its long-term contract with global majors which entails annual revenue potential of INR9bn (~25% of FY18E revenues). Though these new projects provide long-term growth visibility (commissioning in FY20/21), AIL continues with its near-term capex of INR4bn pa, in line with its earlier guidance.
OutlookWe roll forward to FY20E while maintaining ‘BUY’ with a revised TP of INR1,360 (earlier INR1,033), based on 20x FY20E EPS of INR68.
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