Buy Aarti Industries; target of Rs 1285: HDFC Securities

HDFC Securities' research report on Aarti Industries

We expect AIL's PAT to grow at a 22% CAGR over FY21-23E, led by a 14% CAGR in revenue. AIL's constant focus on R&D will enable the company to remain competitive and expand its customer base. The toluene segment in India is mainly untapped and catered to through imports; AIL will benefit in the long term by entering this segment. 2Q EBITDA was 26% above our estimates, mainly attributable to a higher-than-anticipated revenue, offset by higher-than-anticipated operating expenditure. APAT was 53% above our estimates owing to a lower-than-expected interest cost.

Outlook

We maintain a BUY recommendation on Aarti Industries (AIL) with a target price of INR 1,285/share.

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