Aarti Industries was incorporated in 1984. The company manufactures speciality chemicals in benzene-based derivatives. Key value chains include Nitro Chloro Benzenes (NCBs), Di-Chloro Benzenes (DCBs), Phenylenediamines (PDAs), Nitro Toluene Value Chain and Equivalent Sulphuric Acid (E.S.A) and downstream.
With a market capitalisation of Rs. 24,110 crores, the shares of Aarti Industries Ltd started Friday’s trading session on a higher note at Rs. 617 compared to its previous close of Rs. 611. During the trading session, the shares hit a high of Rs. 6710.70, gaining around 10 percent and also recorded as the company’s fresh 52-week high and are currently trading at Rs. 667.75 apiece.
Reflecting on orders and targets, the stock has moved more than 13 percent in just two days. Here are the reasons:
On 18 January 2024, the company signed a long-term agreement with a multinational conglomerate for the supply of a niche speciality chemical. The contract entails supply over four years and is anticipated to generate revenue of over Rs. 6,000 crores for the company.
According to the contract, Aarti Industries will supply the niche speciality chemical for four years. Furthermore, the company mentioned that they have established robust relationships with this customer and have supplied the said product for the past five years.
This is the second contract it signed in the last month. Earlier, on December 27, the company had signed a long-term, contract with Global Agrochem for nine years with a revenue potential worth over Rs. 3,000 crores. long-term contracts between 2017 and 2019 and these contracts had material expectations in revenue terms.
Furthermore, on 19 January 2024, the company’s price hit a fresh 52-week high of Rs. 671.70, after brokerage firms Morgan Stanley and Emkay went bullish on the share price.
According to the reports, Emkay Global Financial Services, one of the well-known financial consultants in India, has given an ‘overweight’ rating on the company’s stock with a target price of Rs. 750 indicating an upside movement of around 13 percent.
The analysts mentioned that the demand for Mono Methyl Aniline (MMA) and Methyl Ethyl Aniline (MEA) is expected to grow significantly, which can be an advantage for the company. Furthermore, the report also stated that the company sees the benefits of Europe+1 in its value chains and India’s competitiveness in nitration is on the rise.
Moreover, Not only Emkay, the international brokerage firm Morgan Stanley had given an ‘overweight’ rating on the company’s stock with a target price of Rs 575. The stock has already breached the brokerage’s price target.
Coming onto the company’s financial statement, the revenue increased marginally by 3 percent from Rs. 1,414 crores in the June quarter to Rs. 1,454 crores during the September quarter. In addition, the net profits zoomed by 30 percent from Rs. 70 crores to Rs. 91 crores during the same timeframe.
Written By Vaibhav Patil
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