A notable chemical stock surged in Thursday’s trade after global brokerage firm UBS projected a potential upside of 30 percent. The bullish outlook sparked strong buying interest, with investors responding positively to UBS’s confidence in the company’s growth trajectory, financial resilience, and sectoral tailwinds.
During Thursday’s trading session, the shares of Aarti Industries Ltd reached an intraday high of Rs.481.80 per share, rising from the previous close of Rs.478.95 per share. However, the stock retreated from the peak and closed at Rs.478.60 per share.
Brokerage Overview
Global brokerage UBS has significantly revised its stance on Aarti Industries, upgrading the stock to a “buy” rating, and boosting its price target to Rs.625 per share, up from Rs.615. This move indicates a potential 30 percent upside from the stock’s current market price.
The firm cited that previous concerns around a weakening chemical cycle and pressures on energy segment expectations, particularly for Mono Methyl Aniline (MMA), have now largely played out. UBS believes these headwinds are easing, setting the stage for a positive turnaround.
The outlook has brightened with signs of improving MMA volumes over the past two quarters, low inventory levels in the supply chain, and strategic cost-optimization efforts under Aarti’s new CEO. UBS expects these developments to drive sustainable growth and margin recovery going forward.
Management Overview
Suyog Kotecha, the Executive Director and CEO of Aarti Industries, told CNBC-TV18 that the company is witnessing demand recovery across all end markets and that is what it is planning for the next 12 to 18 months. He also mentioned that margin recovery has not yet been observed, and the company is operating under the assumption that existing margin levels will continue for the next few quarters. The focus remains on pushing volumes to retain and expand market share in key segments.
Kotecha stated that Aarti Industries aims to achieve an EBITDA of Rs.1,800–2,200 crores by FY28, supported by improved cost efficiency, enhanced operating leverage, and upcoming capital expenditure initiatives. Although the complete impact of these investments will be visible starting FY26, the company anticipates some positive contributions during the ongoing fiscal year.
Financial Performance
Aarti Industries reported consolidated revenue of Rs.1,949 crores in Q4 FY25, representing a 9.94 percent increase year-on-year from Rs.1,773 crores in Q4 FY24. On a sequential basis, revenue rose by 5.72 percent compared to Rs.1,843 crores in Q3 FY25.
The company posted a net profit of Rs.96 crores in Q4 FY25, down 27.27 percent from Rs.132 crores in Q4 FY24. However, net profit improved significantly by 108.70 percent sequentially, up from Rs.46 crores in Q3 FY25.
The company has a Return on Capital Employed (ROCE) of 6.09 percent and a Return on Equity (ROE) of 5.91 percent. Its Price-to-Earnings (P/E) ratio stands at 52.62, a little lower than the industry average of 52.71. Furthermore, the company maintains a current ratio of 1.89, a debt-to-equity ratio of 0.69, and an Earnings Per Share (EPS) of Rs.9.08.
Written by – Siddesh S Raskar
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