Pharma stock engaged in manufacturing and selling APIs, Pharma Intermediates, Specialty Chemicals, and many more jumped 5 percent in the day’s trade following the announcement to Buyback equity shares at a 50 percent premium and fixing record date.
Price Action
With a market capitalization of Rs. 5,562 Crores, the shares of Aarti Drugs Limited were trading at Rs. 605 per equity share, down 0.22 percent from its previous day’s close price of Rs. 606.35.
Buyback of Equity shares
The Board of Directors of Aarti Drugs Limited has considered and approved the resolution for the Buyback of upto 6.65 lakh Equity shares representing 0.72 percent holding of the company at Rs. 900 per share which is a premium of ~50 percent from its current price of Rs. 605.
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The Buyback is gonna take place through a tender offer route for an aggregate consideration of Rs. 59.85 Crores and September 5, 2024, is fixed as the record date to determine eligible shareholders for the buyback.
About the Company
Aarti Drugs Limited is engaged in manufacturing and selling Active Pharmaceutical Ingredients (APIs), Pharma Intermediates, Specialty Chemicals as well as Formulations.
It is the largest producer of Nimesulide, Metronidazole Benzoate, Ketoconazole, Tinidazole, Fluoroquinolones group, and Metformin in the world. It has a presence across 100+ countries with 13 manufacturing plants, 80+ finished products, and 50+ API molecules.
It has a strong clientele base with well-known players like Cipla, Sun Pharma, Lupin, Mankind, Sanofi, Zydus, and many others. As of Q1FY25, It generated 80 percent of its revenue from APIs, Formulations 12 percent, Specialty Chemicals 5 percent, and Intermediates & others 3 percent.
Financials and Ratios
Its revenue from operations declined by 17 percent from Rs. 592 Crores in Q1FY24 to Rs. 493 Crores in Q1FY25, accompanied by profits of Rs. 40 Crores to Rs. 27 Crores.
In terms of Return ratios, it has reported a return on equity (ROE) of 12.4 percent and a Return on capital employed (ROCE) of 13.5 percent. It has reported a debt-to-equity ratio of 0.40.
Written by: Bharath K.S
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