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Buy Aarti Industries, target price Rs 960: ICICI Direct

ICICI Direct has buy call on with a target price of Rs 960. The current market price of Aarti Industries Ltd. is Rs 853.35. Time period given by analyst is one year when Aarti Industries Ltd. price can reach defined target.

Aarti Industries Ltd., incorporated in the year 1984, is a Mid Cap company (having a market cap of Rs 30946.97 Crore) operating in Pharmaceuticals sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 1209.36 Crore, up 1.87 % from last quarter Total Income of Rs 1187.21 Crore and up 12.33 % from last year same quarter Total Income of Rs 1076.57 Crore. Company reported net profit after tax of Rs 139.34 Crore in latest quarter.


Investment Rationale
Aarti Industries’ Q1FY22 revenues is expected to grow 33.5% YoY to Rs 1252 crore amid lower base, improvement in realisation and end user demand in speciality chemicals segments and continuously strong growth in pharma segments. Speciality segment is expected to grow 38% YoY to Rs 1161 crore while pharma segment revenues are expected to grow 20% YoY to Rs 233 crore. OPM is likely to expand 425 bps YoY to 23.7% leading to EBITDA growth of 62.7% YoY to Rs 296 crore. Net profit expected to grow 91.9% YoY to Rs 157 crore mainly due to strong operational performance and decline in financial cost. Key Monitorables: EBITDA margins in both speciality chemical and pharma segment.

Promoter/FII Holdings
Promoters held 47.6 per cent stake in the company as of Sept 30, 2020, while FIIs held 7.5 per cent, DIIs 15.8 per cent and public and others 29.2 per cent.

(Disclaimer: Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.

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