Up and down is relevant for all companies across sector … That is why I took 10 year period which covers both boom and bust period … Globally chemical is mature industry growing at low single digit CAGR … expecting significant outperformance for long duration in a export oriented chemical co is futile … Scale becomes enemy of growth …
Each good chemical companies is trying to get into each other domain that also limits significant outperformance unless it has new patent , or low cost RM adv … Indian chemical companies are handicapped on both front …
Now on PE is good metric for sustainable B2B business or stable B2C business and for cyclical business P/S is good metric … (as Sales fluctuation is far less than profit fluctuation across cycles)
In case Aarti is cyclical ( as per your post) then Aarti has traded between 0.3 price to sales to 7 P/S … At current price to sale of 3.5 it is.not cheap , That was my point …
Is Aarti (high) cyclical business … My view is No … Look at OPM … it is stable between 16%-18% for long period of time … That shows it has stable client / product profile … like good sustainable B2B business … As it get into new products and sets up capacity in advance profitability will fall like it did for ITC when it got into FMCG … but then people paid far lower price multiple when that happened for ITC … which has not happened in case of AARTI
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