Over 6,500% return in 10 years! Analysts see further upside in this multibagger
Rs 1 lakh invested in this stock a decade back has now turned into over Rs 65 lakh at present.
- Feb 17, 2022,
- Updated Feb 17, 2022 12:31 PM IST
Identifying the right stock and sitting tight on your high-conviction bet for long term can help you accumulate massive wealth in the long run. This has turned correct for investors who spotted chemical player Aarti Industries 10 years back.
Shares of the company have jumped more than 6,500 per cent to Rs 979.80 on February 8, 2022 from Rs 14.70 on February 9, 2012. This means, Rs 1 lakh invested in this stock a decade back has now turned into over Rs 65 lakh at present.
Despite the outperformance, analysts on Dalal Street continued to retain their bullish view on Aarti Industries on the back of the company’s constant focus on capital expenditure and R&D that will enable it to remain competitive.
Of late, consolidated net profit of the company jumped around 357 per cent year-on-year (YoY) to Rs 772.49 crore for the quarter ended December 31. It had posted a profit of Rs 165.27 crore in the same quarter last year. Revenue from operations also increased 101 per cent YoY to Rs 2,636.16 crore during the quarter under review. In the long-run, bottom line and top line of the company have grown more than 23 per cent and 12.50 per cent annually (CAGR) since FY2011.
Brokerage HDFC Securities is positive on Aarti Industries (AIL). “The toluene segment in India is mainly untapped and catered to through imports. AIL will benefit in the long term by entering this segment. Third quarter EBITDA and adjusted profit after tax were above our estimates,” HDFC Securities said. It has set a price target of Rs 1,380 for Aarti Industries.
Nirmal Bang Securities has fixed a price target of Rs 1,100 for Aarti Industries. “Aarti Industries is adding newer chemistries and newer products (over 40 products in Chemical and more than 50 in Pharma). Future capex of around Rs 2,500-3,000 crore for specialty chemicals and Rs 300-500 crore for pharma is on track,” the brokerage added.
The company is also targeting growth chiefly through import substitution, through exports and the shift in global demand to a China+1 sourcing strategy. Meanwhile, management retained its 25-35 per cent profit growth guidance for FY22 based on a pick-up in demand, project commissioning and rising share of high-margin products and business from new chemistries.
Management further added that India is emerging as a significant force in the global chemicals supply chain with its scalable, low-cost manufacturing eco-system, better infrastructure and established compliance framework.
Anand Rathi Shares and Stock Brokers has fixed a price target of Rs 1,230 for Aarti Industries.
“On the back of the coming NCB, APIs and intermediate capacities along with revenue from many-year deals and increasing utilisation at the recently commissioned facilities, we expect revenue, EBITDA and PAT to clock 20 per cent, 25 per cent and 37 per cent CAGRs over FY22-24,” Anand Rathi Shares and Stock Brokers said in a report.
Identifying the right stock and sitting tight on your high-conviction bet for long term can help you accumulate massive wealth in the long run. This has turned correct for investors who spotted chemical player Aarti Industries 10 years back.
Shares of the company have jumped more than 6,500 per cent to Rs 979.80 on February 8, 2022 from Rs 14.70 on February 9, 2012. This means, Rs 1 lakh invested in this stock a decade back has now turned into over Rs 65 lakh at present.
Despite the outperformance, analysts on Dalal Street continued to retain their bullish view on Aarti Industries on the back of the company’s constant focus on capital expenditure and R&D that will enable it to remain competitive.
Of late, consolidated net profit of the company jumped around 357 per cent year-on-year (YoY) to Rs 772.49 crore for the quarter ended December 31. It had posted a profit of Rs 165.27 crore in the same quarter last year. Revenue from operations also increased 101 per cent YoY to Rs 2,636.16 crore during the quarter under review. In the long-run, bottom line and top line of the company have grown more than 23 per cent and 12.50 per cent annually (CAGR) since FY2011.
Brokerage HDFC Securities is positive on Aarti Industries (AIL). “The toluene segment in India is mainly untapped and catered to through imports. AIL will benefit in the long term by entering this segment. Third quarter EBITDA and adjusted profit after tax were above our estimates,” HDFC Securities said. It has set a price target of Rs 1,380 for Aarti Industries.
Nirmal Bang Securities has fixed a price target of Rs 1,100 for Aarti Industries. “Aarti Industries is adding newer chemistries and newer products (over 40 products in Chemical and more than 50 in Pharma). Future capex of around Rs 2,500-3,000 crore for specialty chemicals and Rs 300-500 crore for pharma is on track,” the brokerage added.
The company is also targeting growth chiefly through import substitution, through exports and the shift in global demand to a China+1 sourcing strategy. Meanwhile, management retained its 25-35 per cent profit growth guidance for FY22 based on a pick-up in demand, project commissioning and rising share of high-margin products and business from new chemistries.
Management further added that India is emerging as a significant force in the global chemicals supply chain with its scalable, low-cost manufacturing eco-system, better infrastructure and established compliance framework.
Anand Rathi Shares and Stock Brokers has fixed a price target of Rs 1,230 for Aarti Industries.
“On the back of the coming NCB, APIs and intermediate capacities along with revenue from many-year deals and increasing utilisation at the recently commissioned facilities, we expect revenue, EBITDA and PAT to clock 20 per cent, 25 per cent and 37 per cent CAGRs over FY22-24,” Anand Rathi Shares and Stock Brokers said in a report.