AARTIIND - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.1

📊 Fundamental Analysis Summary

AARTIIND appears to be in a transitional phase, with several red flags for long-term investors despite its past reputation in specialty chemicals. Here's a breakdown of the key metrics

Metric Value Interpretation

Market Cap ₹16,028 Cr Mid-cap, but has seen significant value erosion

Stock P/E 48.7 Extremely high vs. industry PE of 34.4 — suggests overvaluation

PEG Ratio -1.40 Negative PEG indicates declining earnings or unreliable growth projections

ROE / ROCE 6.04% / 6.45% Weak profitability; well below ideal levels for long-term compounding

Dividend Yield 0.23% Minimal income generation; not attractive for yield-focused investors

Debt-to-Equity 0.69 Reasonable leverage; not a concern

EPS ₹9.13 Low earnings relative to price

Book Value ₹155 Price-to-book ratio ~2.85× — expensive given weak returns

PAT Growth (QoQ) +108% Strong rebound, but prior quarter was weak; not yet a trend

RSI / MACD 46.0 / -8.42 RSI neutral; MACD negative — weak momentum

FII/DII Holding Change +0.15% / +0.42% Mild institutional interest returning

52W Price Range ₹344 – ₹767 Currently near bottom of range; sentiment is low

📉 Valuation & Entry Price Zone

Despite the recent bounce in PAT, the fundamentals remain weak. The PEG ratio and ROCE/ROE suggest the company is not currently compounding value effectively.

Ideal Entry Zone: ₹360 – ₹400

This range offers a better risk-reward ratio, especially if earnings stabilize.

RSI and MACD suggest waiting for trend reversal before entering.

🧭 If You Already Hold the Stock

Holding Strategy

Time Horizon: Short to medium term (6–12 months) unless ROCE/ROE improve significantly.

Exit Strategy: Consider exiting if price rebounds to ₹500–₹520 without earnings support.

Monitor: ROCE trend, PEG ratio normalization, and PAT consistency. If ROCE rises above 10% and PEG turns positive, reassess for long-term holding.

Key Triggers to Watch

Sustained PAT above ₹100 Cr per quarter

ROCE improvement to double digits

PEG ratio turning positive (indicating earnings growth)

🧠 Final Thoughts

AARTIIND is not currently a strong long-term candidate due to weak profitability and overvaluation. However, if you're already holding, a tactical exit on price recovery or a wait-and-watch approach for earnings revival could be prudent.

Would you like a peer comparison with other specialty chemical stocks or a technical chart setup for short-term trading?

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