🧪 At a Glance
Aarti Industries, once the benzene boss of specialty chemicals, has seen a steep derating with a 40% fall from its peak. Yet it’s mid-way through a ₹2,800 crore capex overhaul, betting big on high-margin segments like chlorotoluene, MMA, and ethylation. Is this the perfect setup for a rebound?
🧠 Part 1: What the Hell Does Aarti Do Again?
Imagine a company that takes boring benzene, fries it in nitric acid, sprinkles some chlorine, and creates magic for:
- 🎨 Paints
- 💊 Pharma
- 🌾 Fertilizers
- 🏭 Energy
- 🧪 Dyes and polymers
That’s Aarti Industries — India’s king of nitration, halogenation, hydrogenation, and industrial chemistry tongue twisters.
The company’s split by product chains:
| Value Chain | Key Products |
|---|---|
| Benzene Chain | NCB, DCB, PDA, MPD, OPD — 108–120 KTPA capacity at 76% utilization |
| Toluene Chain | Toluidines, MNPT, NEOT — capacity being expanded |
| Sulphuric Chain | Sulphuric acid, Oleum, SO3, Di-methyl sulphate |
| New Bets | Ethylation, MMA, Chlorotoluene, Plastic Recycling, CDMO pilot plants |
🧪
Part 2: The Financial Chemistry — Is It Explosive or Inert?
Let’s mix the core financials:
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 4,506 | 6,086 | 6,619 | 6,372 | 7,271 |
| Net Profit (₹ Cr) | 535 | 1,186 | 545 | 416 | 331 |
| ROCE | 13% | 22% | 10% | 7% | 6% |
| EPS (₹) | 15.02 | 32.71 | 15.04 | 11.49 | 9.13 |
| Operating Margin | 22% | 28% | 16% | 15% | 14% |
🎯 Translation: Profit has halved since FY22 peak. Margins dropped like a hot acid flask. The expansion didn’t yet translate into earnings.
🔬 Part 3: The ₹2,800 Cr Bet — Capex or CapTrap?
Aarti is in the middle of a massive bet — ₹2,800 crore of capex over FY25–27. Breakdown:
🏗️ What’s Cooking?
- 🧪 Methyl Aniline (MMA): 200 KTPA commissioned — exports already active
- 🔁 Nitro Toluene: Expansion from 30 → 45 KTPA (Jhagadia)
- 🌱 Ethylation: Capacity expanded to 25–30 KTPA (Dahej SEZ)
- 🧫 Zone
1 thought on “This Chemical Stock is Down 40% from Peak — But Has ₹2,800 Cr Capex Cooking. Multibagger Reloading or Just Dilution Drama?”
NIggga