The shares of chemicals company Aarti Industries have increased investor wealth by 16 times in the last 6 years. If someone had invested Rs 5.93 lakh in it six years ago, he would have become a millionaire today.
According to the Motilal Oswal Wealth Creation Study, the stock is among the top 5 wealth creators on Dalal Street. In December 2013 it was priced at Rs 46. On Thursday, it was trading at Rs 775. In this way, it has climbed about 1600 percent in six years. It closed at Rs 773.75 on Thursday.
This diversified chemicals company, headquartered in Mumbai, offers benzene-based derivatives. Benzene contributes 60 percent of its income, while aniline and sulfuric acid compounds contribute 12 percent. The company mainly deals in two segments. One is specialty chemicals and the other is pharma. The first segment contributes 84 percent to its revenue. The rest comes from another.
In the six months up to September 30, the company has reported an 11 percent decline in revenue and its figure for the period is Rs 2,378 crore. During this period, its profit grew by 31.73 percent to Rs 212.20 crore. The margin increased 440 basis points to 13.3 percent on a year-on-year basis.
In May 2019, it went to record highs of Rs 930.51. However, the price has come down amidst a slowdown in revenue growth due to lower input prices and tightening of raw materials. Analysts are expecting this stock to rise soon.
Geojit Financial Services believes that the company’s revenue growth could have an impact on lower volumes of off-take. The brokerage has also projected a reduction in realization due to the fall in raw material prices. However, he remains optimistic about long-term growth.
