Aarti Drugs share has become a multibagger during the coronavirus crisis and the ensuing market crash since March this year. The pharma share which traded in a range of Rs 563 to Rs 693 between September 18, 2015 to February 28, 2020 has delivered over eight times returns to investors in the next five months. The mid cap share rose 782% from Rs 422.25 on March 19 this year to Rs 3,724 on August 25, 2020. During the same period, Sensex gained merely 37% from 28,288 on March 19 to 38,843 on August 25 this year.
Aarti Drugs share hit its 52-week low on March 19 as Indian market took into account the impact of rising coronavirus cases on the global economy. During the short period of five months, Aarti Drugs share touched all-time high of Rs 3,724 from Rs 422, its yearly low.
An investment of Rs 1 lakh in Aarti Drugs share on March 19 would have grown to Rs 8.82 lakh on August 25.
Strong financial performance accompanied by announcement of bonus issue has contributed to the meteoric rise in the stock. The firm reported a 280.62% rise in Q1 net profit to Rs 85.45 crore against profit of Rs 22.45 crore in Q1 of last fiscal.
In March quarter of previous fiscal, the firm logged a 11.90% fall in net profit to Rs 110.35 crore. Management was confident of clocking profit after tax growth of 15-20% over the medium term on the back of ongoing capital expenditure.
Management expects growth in agro/pharma to compensate for weak demand in other segments such as auto and textiles.
Sales rose 34.34% to Rs 544.67 crore in Q1 against Rs 405.43 crore during the corresponding quarter ended June 2019.
Number of foreign portfolio investors holding the stock rose to 41 in Q1 against 31 in Q4 of last fiscal. Number of shareholders with share capital up to Rs 2 lakh rose to 21,421 in Q1 against 17,601 in Q4 of last fiscal.
For quarter ended June, earnings per share (EPS) rose to Rs 31.34 against 9.19 in June quarter 2019. In Q4 of previous fiscal, EPS stood at Rs 24.28.
The pharma firm logged its higher profit ever in last fiscal despite slowdown in global and Indian economy.
It reported Rs 141.40 crore net profit in last fiscal compared to Rs 89.75 crore profit in corresponding period of previous year. Sales rose 15% to Rs 1806 crore in FY 19-20 against Rs 1560 crore in FY18-19.
Earnings per share climbed to Rs 60.57 in last fiscal against Rs 38.48 in 2018-19 fiscal.
Return on equity stood at 21.67% in FY 19-20 against 16.51% in FY 18-19. Debt to equity ratio fell to 0.52 in last fiscal against 0.87 in FY 18-19 and 1.12 in FY17-18 which implied the firm improved its financial performance despite reducing debt.
A nod to the bonus issue of shares by its board also led to a significant rally in the stock. Aarti Drugs share price rose 20% intra day on August 20 to Rs 2,892.75 against previous close of Rs 2410 on BSE. Later, the share closed 17.76% or Rs 428 higher at Rs 2,838.
Of late, the share has pared gains due to volatile market conditions and profit-booking.
Currently, the stock is down 21.45% or Rs 799 from its all-time high. The share closed 1.36% or Rs 40.35 lower at Rs 2,925 against previous close of Rs 2,965 on BSE. The stock has fallen after three days of consecutive gain. Aarti Drugs share stands higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The stock has gained 564% in one year and risen 405% since the beginning of this year.
Aarti Drugs Limited is a pharmaceutical company. The company offers active pharmaceutical ingredients (APIs) in a range of therapeutic categories, such as anti-inflammatory, cardioprotectant, antifungals, antibiotic, antidiabetic, sedative and vitamins. Its products under APIs include Aceclofenac, Diclofenac Potassium, Diclofenac Diethylamine, Clopidogrel Bisulphate and Telmisartan.