The share price of this leading specialty chemicals company rose to 2.5 percent to a 52-week high price of Rs 649.50 per share after the company signed a long-term supply contract with a global agrochemicals company.
On Wednesday’s trade, at 1:45 p.m, Aarti Industries Ltd shares were trading at Rs 640.20 per share, up 1.11 percent from the previous close price. The company has a market capitalization of Rs 23,202 crore.
Aarti Industries Limited has entered into a nine-year-long-term supply contract for the supply of a niche agrochemical intermediate with a global agrochemical products and solutions company, that is widely used in the herbicide in diverse food and cash crops such as corn, soybean, cotton, sugarcane, sunflower, etc.
Aarti Industries expects a revenue potential of over Rs 3,000 crore over nine years, the contract is set to commence supplies in the current fiscal year. The company reported in its exchange filing.
The global agrochemical market is valued at US$ 74 billion and is growing at a CAGR of about mid to high single-digit. Over the past decade, the easternisation of sourcing of agrochemicals and their intermediates has been increasing steadily. This has resulted in better cost competencies, global scale, and size of manufacturing capabilities.
Aarti Industries Ltd is engaged in the manufacturing of specialty chemicals and pharmaceuticals. The company manufactures specialty chemicals in Benzene-based derivatives that include Nitro Chloro Benzenes,, Di-Chloro Benzenes, Phenylenediamines and many more.
Aarti Industries’ shares have gained 29 percent in the last three months and 3.5 percent on a year-to-date basis.
The company’s revenue has declined by 14 percent yearly, from Rs 1,685 crore in FY Q2FY23 to Rs 1,454 crore in Q2FY24. In the same timeframe, Net profit has decreased by 26 percent from Rs 124 crore to Rs 91 crore.
Aarti Industries has more than 150 products in its portfolio, with over 700 domestic clients, and 400 export clients distributed over 60 countries, with a strong presence in the United States, Europe, and Japan.
In fiscal year 2023, the company received 53 percent of its sales from the domestic market, followed by 13 percent from North America, 11 percent from Europe, and 6 percent from China.
Written by Omkar Chitnis
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