Aarti Industries - Q4FY21 First Cut - ICICI Direct

(CMP - Rs. 1746, MCap - Rs. 30427 crore)

Aarti Industries Q4FY21 results were lower than I-direct estimates on all fronts.

Q4FY21 earnings summary

- Revenues grew 12.4% YoY to Rs. 1209.4 crore (I-direct estimate: Rs. 1316.8 crore) amid 14.2% growth in Speciality chemicals to Rs. 1123 crore (I-direct estimate: Rs. 1217.2 crore) and 8.5% growth in pharma segment to Rs. 223.8 crore (I-direct estimate: Rs. 237.3 crore)

- EBITDA margins improved 118 bps YoY to 21.5% (I-direct estimate: 25.4%), improvement in gross margins by 548 bps YoY was largely offset by higher other expenditure and employee cost. EBITDA grew 18.9% YoY to Rs. 260.3 crore (I-direct estimate: Rs. 334.2 crore)

- Net profit grew 23.3% YoY to 136.1 crore (I-direct estimate: Rs. 200.5 crore) mainly due to strong operational performance

- The company has declared 1:1 bonus shares and Rs. 3 per share dividend (pre-bonus)

Leveraging core knowledge of benzene-based derivatives, the company is continuously expanding product basket towards value added products up the value chain. In pharma, strong growth expected from developed markets backed by integrated model and new launches. Margins are also expected to improve due to incremental addition of high-value products. We like the company's leadership position and strong visibility on order book.

We will come out with an update post discussion with management.

Shares of AARTI INDUSTRIES LTD. was last trading in BSE at Rs.1746.35 as compared to the previous close of Rs. 1743.9. The total number of shares traded during the day was 80126 in over 3955 trades.

The stock hit an intraday high of Rs. 1801.05 and intraday low of 1731.8. The net turnover during the day was Rs. 141989309.

Source : Equity Bulls

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