AARTIIND - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.3
| Stock Code | AARTIIND | Market Cap | 17,270 Cr. | Current Price | 476 ₹ | High / Low | 523 ₹ |
| Stock P/E | 41.6 | Book Value | 165 ₹ | Dividend Yield | 0.21 % | ROCE | 6.83 % |
| ROE | 7.16 % | Face Value | 5.00 ₹ | DMA 50 | 456 ₹ | DMA 200 | 427 ₹ |
| Chg in FII Hold | 0.68 % | Chg in DII Hold | 1.90 % | PAT Qtr | 147 Cr. | PAT Prev Qtr | 146 Cr. |
| RSI | 53.8 | MACD | 5.16 | Volume | 6,08,760 | Avg Vol 1Wk | 8,56,292 |
| Low price | 338 ₹ | High price | 523 ₹ | PEG Ratio | -4.77 | Debt to equity | 0.83 |
| 52w Index | 74.3 % | Qtr Profit Var | 48.5 % | EPS | 11.6 ₹ | Industry PE | 29.2 |
📊 Financials: Aarti Industries (AARTIIND) shows modest fundamentals with ROE at 7.16% and ROCE at 6.83%, reflecting weak efficiency. Debt-to-equity is relatively high at 0.83, indicating leveraged operations. Quarterly PAT stood at ₹147 Cr., nearly flat compared to ₹146 Cr. in the previous quarter, showing limited growth. EPS is ₹11.6, highlighting modest earnings power.
💰 Valuation: The stock trades at a P/E of 41.6 compared to the industry average of 29.2, suggesting overvaluation. P/B ratio is ~2.9 (Price ₹476 / Book Value ₹165). PEG ratio is negative (-4.77), signaling poor growth-adjusted valuation. Intrinsic value appears lower than current price, making entry unattractive at present levels.
🏢 Business Model: Aarti Industries operates in specialty chemicals, serving pharmaceuticals, agrochemicals, and polymers. Its competitive advantage lies in diversified product offerings and strong client relationships. However, profitability metrics remain weak, limiting overall health.
📈 Entry Zone: A more attractive entry would be near ₹400–430, closer to its DMA 200 and below current highs. Long-term holding is favorable only if profitability improves and valuation normalizes.
Positive
- 📌 Diversified business model in specialty chemicals
- 📌 EPS of ₹11.6 reflects steady earnings base
- 📌 Increase in FII holdings (+0.68%)
- 📌 Increase in DII holdings (+1.90%)
Limitation
- ⚠️ High P/E ratio (41.6) vs industry average (29.2)
- ⚠️ Weak ROE (7.16%) and ROCE (6.83%)
- ⚠️ Negative PEG ratio (-4.77) highlights poor growth-adjusted valuation
- ⚠️ Dividend yield of 0.21% is very low
Company Negative News
- 📉 Flat quarterly PAT growth (₹147 Cr. vs ₹146 Cr.)
Company Positive News
- 📈 Increase in FII holdings (+0.68%)
- 📈 Increase in DII holdings (+1.90%)
Industry
- 🏦 Industry PE at 29.2, lower than Aarti Industries’ valuation
- 📊 Specialty chemicals sector benefits from global demand in pharma and agrochemicals
Conclusion
🔎 Aarti Industries is moderately overvalued with weak return metrics despite a diversified business model. Entry is advisable near ₹400–430. Long-term holding requires caution unless profitability improves and valuation aligns with industry norms.
Would you like me to also prepare a valuation comparison chart between Aarti Industries and specialty chemical peers to highlight its relative positioning?