Accumulate Aarti Industries; target of Rs 584: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Aarti Industries with a target price of Rs 584 in its research report dated October 07, 2023.

Broker Research

November 09, 2023 / 10:46 IST

Accumulate

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Aarti Industries

We upward revise our FY24/FY25E EPS estimates by 2%/9%, post factoring in growth from discretionary segments. Aarti Industries (ARTO) consolidated net topline dropped 14% YoY to Rs 14.5 bn led by drop in realizations. Topline improved 3% QoQ driven by higher exports (27% YoY). Domestic sales impacted significantly (realization driven), while export revenues dropped 8% YoY in Q2FY24. Gross margin stood at 41.3% down ~100bps YoY due to lag in full pass through of higher costs, however sequentially improved by 250bps. For FY24E, management maintained muted outlook on account of subdued demand and lower capacity utilization across business segments. We expect recovery to be seen post H2FY24 with 1) higher capacity utilization of its products, 2) increasing contribution from LT- contracts and 3) volume growth from newer projects.

Outlook

The stock currently trades at ~35x TTM P/E, we value the stock at 28x P/E on FY26E EPS of Rs 20.8 and arrive at TP of Rs 584 (earlier Rs 472). Upgrade to ‘ACCUMULATE’.

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