AARTIIND - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.2

Here’s a detailed analysis of Aarti Industries Ltd (AARTIIND)

🧾 Core Financials

Profitability & Growth

Quarterly PAT dropped sharply from ₹99 Cr to ₹44 Cr — a 68.1% decline, signaling margin compression or demand slowdown.

EPS: ₹6.76 — weak earnings per share for a mid-cap specialty chemical player.

ROE: 6.22% and ROCE: 6.43% — below industry norms, indicating inefficient capital deployment.

Debt & Liquidity

Debt-to-equity: 0.68 — moderate leverage, manageable but not ideal in a low-margin phase.

Dividend Yield: 0.26% — minimal, reflecting reinvestment strategy.

📊 Valuation Indicators

Metric Value Industry Avg Remarks

P/E Ratio 57.8 33.9 Overvalued

P/B Ratio ~2.52 ~3.5 Fairly valued

PEG Ratio -1.70 ~1 Negative due to declining growth

Intrinsic Value ~₹320–₹350 — Slightly overvalued

The stock trades at a premium valuation, despite weak earnings and declining profitability.

🏢 Business Model & Competitive Edge

Core Operations: Specialty chemicals, pharma intermediates, and polymers.

Strengths

Diversified product portfolio with global clientele.

Long-term contracts in place for key molecules.

Risks

Profit volatility due to raw material price swings and export dependency.

Weak ROE/ROCE and negative PEG suggest poor earnings visibility.

📉 Technical & Entry Zone

Current Price: ₹391

DMA 50/200: ₹403 / ₹445 — trading below key averages.

RSI: 49.4 — neutral zone.

MACD: -2.71 — bearish crossover.

Suggested Entry Zone: ₹340–₹360 range, ideally near 52-week low of ₹344.

🕰️ Long-Term Holding Guidance

Hold only if already invested, but monitor earnings recovery.

Avoid fresh entry unless price corrects and profitability improves.

Ideal for long-term only if

ROCE and ROE rebound above 12%.

PAT growth resumes and PEG normalizes below 1.5.

Would you like a peer comparison with Navin Fluorine or Deepak Nitrite, or a sector outlook for specialty chemicals?

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