At a Glance
Aarti Industries Ltd (AIL) just reported a quarterly profit of ₹43 Cr, down a bone-chilling 68% YoY, with revenue dipping 9.5%. The stock trades at a lofty P/E of 63, while ROE is crawling at 6%. The market cap is still an ambitious ₹14,732 Cr, but investors are questioning: Is this a hidden gem or just expensive chemical fumes?
Introduction
For years, Aarti Industries has been the cool kid of Indian specialty chemicals – supplying NCBs, dyes, pharma intermediates, and polymers globally. However, FY25-26 has thrown a chemical spill on the party. Profits have eroded, margins have shrunk to 13%, and the share price halved from ₹767 to ₹406 in a year. The only thing rising is the P/E, like a bad smell you can’t shake off.
Business Model (WTF Do They Even Do?)
AIL operates across three major segments:
- Specialty Chemicals – bulk of revenues from NCB and its derivatives, catering to agrochemicals, dyes, pigments.
- Pharma Intermediates – custom synthesis for pharma majors.
- Performance Chemicals – additives and specialty polymers.
The company thrives on long-term contracts, but global demand cycles and input volatility have hit earnings. They’ve also ventured into plastic recycling and renewables, which may (or may not) save their margins.
Financials Overview
FY25 Snapshot:
- Revenue: ₹7,271 Cr (-3% YoY)
- PAT: ₹331 Cr (-21% YoY)
- EPS: ₹9.13
- OPM: 14%
- ROE: 6%
Q1 FY26:
- Revenue: ₹1,675 Cr (-9.5% YoY)
- PAT: ₹43
