Specialty chemicals stock focused on producing advanced intermediated and specialty chemicals, with well-known clients such as Aramco, Dr. Reddy’s, and many more, jumped 9 percent in the day’s trade upon executing a Strategic Supply Agreement (SSA) with Baker Hughes.
Price Action
With a market capitalization of Rs. 12,516 Crores, the shares of Aether Industries Limited were trading at Rs. 944.45 per equity share, up 6 percent from its previous day’s close price of Rs. 895.05.
What Happened
Aether Industries Limited has executed a Strategic Supply Agreement (SSA) with Baker Hughes for 5 years extendable by 3 additional one-year terms, and thereafter extendable on a yearly basis.
The Strategic Supply Agreement for contract manufacturing by Aether Industries for Baker Hughes includes a total of 6 products that will be manufactured by Aether Industries Limited for the first time in India and will be supplied to the global locations of Baker Hughes, with a significant supply dedicated to Indian domestic oil and gas applications.
Baker Hughes is an American energy company and one of the world’s largest oil field services companies, engaged in providing products and services for oil well drilling, formation evaluation, completion, production, reservoir consulting, and many more.
Most products will be manufactured by Aether Industries 100 percent wholly-owned subsidiary, Aether Speciality Chemicals Limited, wherein the required assets, plants, and machinery have already been installed for the contract manufacturing of said products.
The Strategic Supply Agreement cements Aether Industries Limited’s relationship as a strategic contract manufacturing partner for Baker Hughes and paves the way for a much deeper association and business relationship between the two companies.
About the Company
Aether Industries Limited is a specialty chemicals manufacturer focused on producing advanced intermediated and specialty chemicals used in Pharmaceutical industries, coating, agrochemicals, additives, and many more.
It has a strong customer base with well-known clients such as Divis Laboratories, Dr. Reddy’s, Aramco, Laurus Labs, Polaroid, Mankind Pharma, and many more.
The company’s business segment revenue breakup is as follows, it generated 59 percent of its revenue from large-scale manufacturing of Advanced intermediates and specialty chemicals, 26 percent from contract manufacturing of products, and 14 percent from Contract research and manufacturing services.
Financials & Ratios
Its revenue from operations declined by 37.41 percent from Rs. 183.78 Crores in Q4FY23 to Rs. 115.03 Crores in Q4FY24, accompanied by profits of Rs. 37.56 Crores to Rs. 115.03 Crores.
In terms of Return ratios, it has reported a return on equity (ROE) of 5.61 percent and a return on capital employed (ROCE) of 7.52 percent. It has reported a debt-to-equity ratio of 0.09.
Written by: Bharath K.S
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