Buy Aarti Industries; target of Rs 800: Anand Rathi

Anand Rathi is bullish on Aarti Industries has recommended buy rating on the stock with a target price of Rs 800 in its research report dated November 21, 2022.

Broker Research

November 22, 2022 / 18:28 IST

26 Aug, 2025 12:21

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Anand Rathi's research report on Aarti Industries

Aarti had entered into a 20-year agreement to secure nitric acid from Deepak Fertilisers valued at ~Rs80bn w.e.f. 1 st Apr’23 and specifications based on formula-linked pricing. This secures its RM and enables it to focus on growth opportunities, and introduce value-added products and value chains for niche applications. We are positive on Aarti’s long-term performance and expect its revenue/EBITDA/PAT to clock 14%/24%/ 28% CAGRs over FY23-25 on utilisation picking up at the recently commissioned capacities, the start of revenue from long-term contracts and the rising share of downstream and value-added products. The key short-term moniterables are demand slowdown in discretionary end-user industries, the challenging business environment (higher RM and utility costs) and volatile margins.

Outlook

We maintain our Buy rating at a revised TP of Rs800, valuing the company at 33x FY25e (adjusting for the hiving off of the pharma business).

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