AARTIIND - Fundamental Analysis: Financial Health & Valuation

📊 Financial Overview: Aarti Industries shows signs of financial strain. With a ROCE of 6.43% and ROE of 6.22%, capital efficiency is below industry standards. The debt-to-equity ratio of 0.68 is moderate, but the quarterly PAT dropped 68.1% to ₹44 Cr, indicating earnings pressure. EPS stands at ₹6.76, and the company trades below both DMA 50 and DMA 200, suggesting technical weakness.

💰 Valuation Metrics: The stock trades at a P/E of 56.4, significantly above the industry average of 32.0, suggesting overvaluation. The P/B ratio is ~2.46 (₹381 / ₹155), and the PEG ratio of -1.66 reflects negative earnings growth. Dividend yield is low at 0.26%, offering minimal income support.

🏢 Business Model & Competitive Edge: Aarti Industries operates in specialty chemicals, serving pharma, agrochemicals, and polymers. It has a strong domestic and export presence, but recent margin compression and project delays have impacted profitability. The company’s backward integration and diversified product base offer resilience, but execution risks remain.

📉 Entry Zone: A reasonable entry zone lies between ₹340–₹360, near the 52-week low and below DMA 200, offering better valuation comfort.

📈 Long-Term Holding Guidance: Suitable only for long-term investors with high risk tolerance. Wait for earnings recovery and margin improvement before accumulating. Monitor capex execution and global demand trends.