Mehabe score: 4 G Factor: 2 Piotski Score: 4 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 4.
Description
Aarti Industries is a leading Indian manufacturer of Speciality Chemicals and Pharmaceuticals with a global footprint. Chemicals manufactured by Aarti are used in the downstream manufacture of pharmaceuticals, agrochemicals, polymers, additives, surfactants, pigments, dyes, etc. [1]Site:AARTIINDMain Symbol:AARTIIND
Stock trades at 964.0, above its 50dma 914.19. It also trades above its 200dma 793.46. The stock remains bullish on techicals
The 52 week high is at 987.20 and the 52week low is at 483.23
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– Stock is trading at 9.98 times its book value
-Promoter holding has decreased over last quarter: -0.69%
-The company has delivered a poor sales growth of 8.43% over past five years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 27.7x. Clean Science trades at the industry’s max P/E of 110.91x. AARTIIND trades at a P/E of 57.6x
– Industry’s mean G-Factor is 3.3 while the mean Piotski score is 8.0. AARTIIND has a G-Factor of 2 and Piotski scoreof 4.
– Average 1 month return for industry is 0.6%. The max 1- month return was given by Solar Industries: a return of 17.41 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 1552.0 cr compared to Rs 1173.0 cr for period ended Sep 2020, a rise of 32.3%
Operating Profits reported at Rs 310.0 cr for period ended Sep 2021 vis-vis 254.0 for period ended Sep 2020 .
Operating Margins contracted -168.0 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 4.86 compared to Rs 4.55 for previous quarter ended Jun 2021 and Rs 4.02 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 5264.0 cr for period ended TTM vis-vis sales of Rs 4506.0 cr for the period ended Mar 2021, a healthy growth of 14.4%. The 3 year sales cagr stood at 8.1%.
Net Profit reported at Rs 642.0 cr for period ended TTM vis-vis sales of Rs 523.0 cr for the period ended Mar 2021, rising 18.5%.
Company recorded a Net Profit CAGR of 9.3% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 93% on a 1 Year basis vis-vis a return of 45% over the last 3 Years. – The compounded sales growth on a TTM bassis is 20% vis-vis a compounded sales growth of 6% over the last 3 Years. – The compounded profit growth on a TTM basis is 26% vis-vis a compounded profit growth of 17% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 11.86% vis-vis 11.9% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 29.18% vis-vis 29.57% for Jun 2021
Conclusion
– – Stock is trading at 9.98 times its book value
-Promoter holding has decreased over last quarter: -0.69%
-The company has delivered a poor sales growth of 8.43% over past five years.
– might be capitalizing the interest cost
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 914.19 and is trading at 964.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
