The trading game is all about picking the right stock. Be it intraday trading or value investing, the right stock can make you millions while the wrong one can cost you millions. Long-term investors of Aarti Industries can say that they made the right call.
The stock of the specialty chemicals company skyrocketed in the last 10 years, surging over 6,000 percent in this time. The scrip rallied from around ₹15 in February 2012 to ₹957 currently (CMP as on February 18, 2022), jumping as much as 6,286 percent in the last 10 years.
Imagine, an investment of ₹1 lakh, ten years ago in the firm, would have turned to nearly ₹64 lakh today.
Since FY12, the company's net profit has jumped over 4 times, surging from ₹126 crore in FY12 to ₹526 crore in FY21. Its revenue has also risen from ₹1,673 crore in FY12 to ₹5,023 crore in FY21.
Just in the December quarter of the financial year 2021-22, the company posted a 356 percent rise in its net profit to ₹772 crore from ₹169 crore in December 2020 quarter. The company was impacted by the second COVID wave in the December 2020 quarter. Its net sales also doubled to ₹2,376 crore in Q3FY22 from ₹1,187 crore in Q3FY21.
Established in 1984, Aarti Industries (AIL) is today a leading Indian manufacturer of specialty chemicals and pharmaceuticals with a global footprint across 60 countries. The Company globally holds first to the fourth position for 75 percent of its portfolio and is a ‘partner of choice’ for various major global and domestic customers.
Over the past three decades, AIL has emerged as a global partner of choice with 250 + products for over 400+ international and 700+ domestic customers across the world with a major presence in USA, Europe, Japan, China and India, claims the firm.
The company serves leading consumers of specialty chemicals and intermediates for pharmaceuticals, agrochemicals, polymers, pigments, printing ink, dyes, fuel additives, aromatics, surfactants and various other specialty chemicals across the globe.
In the last 1 year, the stock has surged over 60 percent as against a 12 percent rise in benchmark Nifty. Despite the recent outperformance, brokerages have a strong buy call on the stock.
HDFC Securities is of the view that the firm's constant focus on Capex and R&D will enable it to remain competitive and expand its customer base going forward. It raised the target price of the stock from ₹1,330 to ₹1,380.
“The toluene segment in India is mainly untapped and catered to through imports. AIL will benefit in the long term by entering this segment. Third-quarter EBITDA and adjusted profit after tax were above our estimates,” HDFC Securities said.
The brokerage also raised its FY22 EPS estimate by 75.5 percent to ₹33.
