Please refer to important disclosures at the end of this report
1
Aarti Industries Limited (AIL) is a manufacturer of specialty chemicals and
pharmaceuticals. The Company is also engaged in the manufacture of home
and personal care products. Management expects growth in H2FY17 to be
largely volume driven. The company expects speciality chemical volume to gro
w
between 7-10% and pharmaceutical to grow around 15-20% for FY17. In the
current market scenario when domestic demand is expected to see a temporar
y
contraction due to currency demonetization, export oriented businesses (AIL has
around 48% exports oriented business) are likely to see higher buying interest.
AIL’s further plans to set up a Nitration (Toulene) unit in H2FY17 and is
developing a co-generation power plant. AIL further plans to incur capex o
f
700-800 crore over the next 2 years towards building up new capacities. The
company has more order visibility for H2FY17 and expects volume to pick up
going ahead. This, along with AIL’s good financials might result in stock
continuing to outperform. The company has good consistent profit growth o
f
31.22% over 5 years The Company has been maintaining a healthy dividend
payout of 27.07% (Div. Yield: 1.20%. The company has reported a health
y
Return on Equity (RoE) of 20%+ in last 5 years. Hence Buy.
BUY
CMP `708
Stock Info
Sector
Beta 0.7
Bloomberg Code
Shareholding Pattern (%)
Promoters 54.8
MF / Banks / Indian Fls 13.3
FII / NRIs / OCBs 4.0
Indian Public / Others 27.9
Abs. (%) 3m 1yr 3yr
Sensex (7.6) 0.3 25.5
Aarti Industries 18.1 39.2 745.8
52 Week High / Low 765/417
Avg. Daily Volume 6,658
Agrichemicals
Market Cap (` cr) 5,895
5
BSE Sensex 25,860
Nifty 7,966
Face Value (`)
Reuters Code ARTI.BO
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
A
arti Industries
Others |
A
grichemicals
November 25, 2016
Aarti Industries | Agrichemicals
November 25, 2016
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Aarti Industries
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
(
-5% to -15%
)
Sell
(
< -15
)