Aarti Industries – Integrated Diversified Player on Benzene Derivatives

Results are out!

Again they are conveniently taking the lower numbers i.e. without termination and shortfall (for YoY Revenue and EBIDTA) to show better growth compared to FY22 ! Request someone who has been following this closely to comment on the results.

Highlights from MD V Gogri’s commentary:

Positives:

1. For the current fiscal 2023-24, the firm is looking at volume growth of around 25 percent. Part of that volume will come from our non-regular market because regular market demand is under pressure.
2. Discretionary side demand seems to be recovering from at least the first quarter of FY24.

Negatives

1. EBITDA growth will be lower (than revenue rate), we will be targeting around 20 percent growth in EBITDA for FY24
2. Some global demand is still under pressure on the discretionary side because of higher interest rate.

General commentary:

1. Company is targeting revenue growth of about 30 to 45 percent over two years (at constant raw material cost).
2. Some inventory correction is also taking place. So the feedback we are getting is that quarter-on-quarter, demand should increase on the discretionary side in FY24
3. Exports will be continuing – around 50 percent of the sales will come from export