{Ticker : 524208 { BUY: ₹1254 { Tar­get: ₹1360

Flash News Investment - - RECOMMENDATIONS -

Aarti In­dus­tries is a lead­ing man­u­fac­turer of ben­zene-based de­riv­a­tive prod­ucts. Its prod­ucts have wide ap­pli­ca­tion across in­dus­tries like paints, pig­ments, spe­cial­ity poly­mers, pharma and agro­chem­i­cals. Over the last three years, the PAT has grown at a CAGR of 26.5 per cent. In FY18, the com­pany achieved vol­ume growth of 7 per cent YoY. For FY19 and FY20, the man­age­ment has guided vol­ume growth of 12-15 per cent, while the net prof­its would grow in the range of 18-20 per cent. For FY19, it has planned capex of Rs 600-700 crore for set­ting up new R&D fa­cil­ity at Navi Mum­bai and has bagged multi-year con­tract and plans to de-bot­tle­neck its var­i­ous ca­pac­i­ties. The com­pany has ro­bust de­mand for its prod­ucts from the phar­ma­ceu­ti­cals and spe­cial­ity poly­mers in­dus­try. It has de­liv­ered ROE of 25.2 per cent. Con­sid­er­ing the ro­bust fi­nan­cials and ex­ten­sive ex­pan­sion plan, we rec­om­mend it as a BUY.

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