Dolat Capital Market has given Buy recommendation for Aarti Industries with a target price of Rs. 1547 in its research report issued on Jan 29, 2021

Dolat Capital Market’s research report on Aarti Industries

Aarti Industries reported sales in-line with our estimates at Rs 11.8bn, up by 9.5% YoY. Gross margin improved by 300 bps YoY, and 340 bps QoQ to 54.1% owing to better pass-through and higher value added products in the mix (~76% in 3QFY21 against 72% in 3QFY20). EBITDA beat our estimates reporting a 12.1% YoY growth to Rs 2.85bn. PAT too, beat our estimates growing by 18.5% YoY to Rs 1.69bn owing to lower interest costs (down by 39.8% YoY to Rs 173mn) and lower tax rate compared to 3QFY20 at 19.2%.

Outlook

We maintain our buy rating on the stock with a target price of Rs 1,547/share (25x FY24E EPS).