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Last Updated on: 15 October, 2024
Author: Getaka|Social: Getaka Financial Services X (Earlier Twitter) Profile Getaka Financial Services LinkedIn Logo
Stock Ticker - BSE: 524208 | NSE: AARTIIND

Aarti Industries Ltd: Intrinsic Value and Fundamental Analysis

Share Price and Basic Stock Data

Last Updated: October 14, 2024, 11:49 pm

Market Cap 19,333 Cr.
Current Price 533
High / Low770/438
Stock P/E39.9
Book Value 146
Dividend Yield0.19 %
ROCE7.47 %
ROE8.22 %
Face Value 5.00
PEG Ratio-17.13

Stock P/E, Current Price, and Intrinsic Value Over Time

View Share Price Target for Aarti Industries Ltd

Competitors of Aarti Industries Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Haryana Leather Chemicals Ltd 52.2 Cr. 106124/43.611.3 83.80.94 %8.96 %7.25 % 10.0
Hardcastle & Waud Mfg Co Ltd 73.6 Cr. 1,0831,355/39023.4 6550.00 %7.00 %5.98 % 10.0
Grauer & Weil (India) Ltd 4,786 Cr. 106118/56.029.9 17.80.47 %26.1 %19.6 % 1.00
DMCC Speciality Chemicals Ltd 655 Cr. 262380/24566.7 83.90.38 %10.8 %5.68 % 10.0
Dai Ichi Karkaria Ltd 399 Cr. 536799/372240 2430.37 %0.25 %1.43 % 10.0
Industry Average14,028.75 Cr1,051.6396.16180.920.29%12.96%9.90%6.93

All Competitor Stocks of Aarti Industries Ltd

Quarterly Result

MonthJun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024
Sales1,3171,2562,0761,7561,6101,6851,6681,6561,4141,4541,7321,7731,855
Expenses1,0031,0011,1861,4171,3261,4181,3791,4031,2141,2211,4731,4901,550
Operating Profit314255890339284267289253200233259283305
OPM %24%20%43%19%18%16%17%15%14%16%15%16%16%
Other Income0100000000806
Interest38142431454447334058545964
Depreciation695757777273828489939798102
Profit before tax2071848092311671501601367182116126145
Tax %20%18%10%16%19%17%15%-10%1%-11%-7%-5%6%
Net Profit1651507251941361241371497091124132137
EPS in Rs4.554.1420.015.343.753.423.774.111.932.513.423.643.78

Last Updated: Unknown

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: September 20, 2024, 5:25 pm

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024TTM
Sales2,0862,6192,8903,0063,1633,8064,1684,1864,5066,0866,6196,3726,814
Expenses1,7252,2172,4242,4342,5093,1063,2023,2093,5254,3655,5305,3915,734
Operating Profit3614024665726547009659779821,7201,0899821,080
OPM %17%15%16%19%21%18%23%23%22%28%16%15%16%
Other Income411962729111314
Interest9511813811711713218312586102168211235
Depreciation83898298123146163185231246310378390
Profit before tax1872062553634164296226766651,372611395469
Tax %29%26%24%26%21%19%19%19%19%14%11%-5%
Net Profit1351632082683283465045475351,186545416484
EPS in Rs4.254.585.817.719.6210.2414.1815.3915.0232.7115.0411.4913.35
Dividend Payout %24%25%24%28%3%2%19%11%10%11%17%9%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-20232023-2024
YoY Net Profit Growth (%)20.74%27.61%28.85%22.39%5.49%45.66%8.53%-2.19%121.68%-54.05%-23.67%
Change in YoY Net Profit Growth (%)0.00%6.87%1.24%-6.46%-16.90%40.18%-37.13%-10.73%123.88%-175.73%30.38%

Aarti Industries Ltd has shown an inconsistent trend in YoY Net Profit Growth (%) in the last 11 years from 2013-2014 to 2023-2024.

Growth

Compounded Sales Growth
10 Years:9%
5 Years:9%
3 Years:12%
TTM:6%
Compounded Profit Growth
10 Years:10%
5 Years:-3%
3 Years:-7%
TTM:1%
Stock Price CAGR
10 Years:25%
5 Years:9%
3 Years:-19%
1 Year:10%
Return on Equity
10 Years:18%
5 Years:16%
3 Years:16%
Last Year:8%

Last Updated: Unknown

Balance Sheet

Last Updated: October 15, 2024, 4:16 pm

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Equity Capital404444424141438787181181181
Reserves7178269721,0961,3211,5382,5872,8923,4164,3354,7395,109
Borrowings8491,0391,2021,2921,5642,0832,4012,0982,8572,5872,9073,242
Other Liabilities5717607195385737308261,2561,2827487541,084
Total Liabilities2,1762,6702,9382,9663,4994,3915,8586,3327,6427,8518,5819,616
Fixed Assets6748269671,2461,6971,9982,1472,4683,5933,5954,8615,649
CWIP691171933132704367951,4181,2981,3461,0961,229
Investments95117139414747333764281723
Other Assets1,3381,6091,6391,3661,4861,9102,8842,4092,6882,8822,6072,714
Total Assets2,1762,6702,9382,9663,4994,3915,8586,3327,6427,8518,5819,616

Reserves and Borrowings Chart

Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Cash from Operating Activity 2303153405744703357361,1028735191,3191,204
Cash from Investing Activity -229-291-298-452-529-610-797-1,124-1,322-1,169-1,330-1,310
Cash from Financing Activity 1-22-23-12858279833-5356144123835
Net Cash Flow2219-7-04772-557165-23927-71

Free Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Free Cash Flow-488.00401.00465.00571.00653.00698.00963.00975.00980.00-1.00-1.00979.00

Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)

Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Debtor Days756255646163686664655247
Inventory Days150147123108136144152174190143115122
Days Payable7490556771695572117532455
Cash Conversion Cycle152119123105125138165168137155143114
Working Capital Days120999196931039993631209582
ROCE %20%18%19%20%19%16%18%15%13%22%10%7%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthSep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024
Promoters44.21%44.21%44.19%44.19%44.16%44.15%44.07%43.65%43.57%43.54%43.43%43.24%
FIIs11.86%12.27%12.46%11.82%12.11%12.05%12.32%12.17%10.58%10.83%10.93%10.61%
DIIs14.75%14.54%14.89%15.07%15.02%14.54%14.74%14.83%16.14%15.82%17.24%18.55%
Government0.00%0.00%0.01%0.01%0.01%0.01%0.01%0.01%0.01%0.02%0.03%0.03%
Public29.18%28.98%28.45%28.91%28.69%29.26%28.87%29.33%29.72%29.78%28.38%27.58%
No. of Shareholders2,59,5742,82,9802,95,7633,40,3583,40,7693,76,5483,85,7513,97,9074,23,1404,18,1233,77,9533,49,415

Shareholding Pattern Chart

No. of Shareholders

Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)Previous Number of SharesPrevious DatePercentage Change
HDFC Mid-Cap Opportunities Fund - Regular Plan7,931,1250.66497.32923,0002024-10-14759.28%
PGIM India Midcap Opportunities Fund2,064,9831.13129.48923,0002024-10-14123.73%
ICICI Prudential Manufacturing Fund1,517,0011.4195.12923,0002024-10-1464.36%
Nippon India Small Cap Fund1,335,8080.1483.76923,0002024-10-1444.72%
UTI Mid Cap Fund1,316,0660.6582.52923,0002024-10-1442.59%
ICICI Prudential Equity - Arbitrage Fund1,273,0000.3379.82923,0002024-10-1437.92%
ICICI Prudential India Opportunities Fund1,211,6730.3275.98923,0002024-10-1431.28%
PGIM India Flexi Cap Fund1,082,3121.0367.87923,0002024-10-1417.26%
Kotak Equity Arbitrage Fund - Regular Plan923,0000.1157.88923,0002024-10-140%
Axis Small Cap Fund785,0010.2149.22923,0002024-10-14-14.95%

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue5.005.005.005.005.00
Basic EPS (Rs.)11.4915.0432.7130.0430.77
Diluted EPS (Rs.)11.4915.0432.7130.0430.77
Cash EPS (Rs.)21.9223.6039.5143.9942.01
Book Value[Excl.RevalReserv]/Share (Rs.)145.94135.75124.60201.71176.36
Book Value[Incl.RevalReserv]/Share (Rs.)145.94135.75124.60201.74176.39
Revenue From Operations / Share (Rs.)175.79182.58167.88258.61240.26
PBDIT / Share (Rs.)27.1730.0647.4756.3756.60
PBIT / Share (Rs.)16.7421.5040.6743.1045.97
PBT / Share (Rs.)10.9116.8637.8538.1438.81
Net Profit / Share (Rs.)11.4915.0432.7130.7231.38
NP After MI And SOA / Share (Rs.)11.4915.0432.7130.0430.77
PBDIT Margin (%)15.4516.4628.2721.7923.55
PBIT Margin (%)9.5211.7724.2216.6619.13
PBT Margin (%)6.209.2322.5414.7416.15
Net Profit Margin (%)6.538.2319.4811.8713.06
NP After MI And SOA Margin (%)6.538.2319.4811.6112.80
Return on Networth / Equity (%)7.8711.0826.2514.9417.99
Return on Capital Employeed (%)8.6213.4425.9314.3218.13
Return On Assets (%)4.336.3515.106.858.46
Long Term Debt / Equity (X)0.280.120.200.360.19
Total Debt / Equity (X)0.600.580.560.710.60
Asset Turnover Ratio (%)0.700.800.780.620.66
Current Ratio (X)0.950.881.250.981.05
Quick Ratio (X)0.500.510.810.590.61
Inventory Turnover Ratio (X)3.443.522.992.212.27
Dividend Payout Ratio (NP) (%)13.0516.6210.708.9120.19
Dividend Payout Ratio (CP) (%)6.8410.598.856.1815.00
Earning Retention Ratio (%)86.9583.3889.3091.0979.81
Cash Earning Retention Ratio (%)93.1689.4191.1593.8285.00
Interest Coverage Ratio (X)4.666.4816.8211.377.90
Interest Coverage Ratio (Post Tax) (X)2.974.2412.597.205.38
Enterprise Value (Cr.)27209.9921458.7737059.1925031.6114932.31
EV / Net Operating Revenue (X)4.273.246.095.553.57
EV / EBITDA (X)27.6219.6921.5425.4815.14
MarketCap / Net Operating Revenue (X)3.792.845.705.093.17
Retention Ratios (%)86.9483.3789.2991.0879.80
Price / BV (X)4.573.827.686.554.46
Price / Net Operating Revenue (X)3.792.845.705.093.17
EarningsYield0.010.020.030.020.04

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value of Aarti Industries Ltd as of October 15, 2024 is: ₹479.76

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.

As of October 15, 2024, Aarti Industries Ltd is Overvalued by 9.99% compared to the current share price ₹533.00

Intrinsic Value of Aarti Industries Ltd as of October 15, 2024 is: ₹468.58

Calculation basis:

  • Intrinsic value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
  • EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.

This formula allows us to gauge the intrinsic value of the stock by analyzing its fundamental indicators along with EPS growth.

As of October 15, 2024, Aarti Industries Ltd is Overvalued by 12.09% compared to the current share price ₹533.00

Last 5 Year EPS CAGR: -2.33%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The stock has a high average ROCE of 16.42%, which is a positive sign.
  2. The company has higher reserves (2,462.33 cr) compared to borrowings (2,010.08 cr), indicating strong financial stability.
  3. The company has shown consistent growth in sales (3.92 cr) and profit (407.31 cr) over the years.
  1. The stock has a high average Working Capital Days of 96.17, which may not be favorable.
  2. The stock has a high average Cash Conversion Cycle of 137.00, which may not be favorable.

Stock Analysis

  • Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in Aarti Industries Ltd:
    1. Net Profit Margin: 6.53%
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 8.62% (Industry Average ROCE: 12.96%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. ROE%: 7.87% (Industry Average ROE: 9.9%)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): 2.97
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    5. Quick Ratio: 0.5
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    6. Stock P/E: 39.9 (Industry average Stock P/E: 96.16)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    7. Total Debt / Equity: 0.6
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions.
    Stock Rating:

About the Company - Qualitative Analysis

Aarti Industries Ltd. is a Public Limited Listed company incorporated on 28/09/1984 and has its registered office in the State of Gujarat, India. Company’s Corporate Identification Number(CIN) is L24110GJ1984PLC007301 and registration number is 007301. Currently Company is involved in the business activities of Manufacture of basic chemicals, fertilizer and nitrogen compounds, plastics and synthetic rubber in primary forms. Company’s Total Operating Revenue is Rs. 6865.27 Cr. and Equity Capital is Rs. 181.25 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
Chemicals - Speciality - OthersPlot Nos. 801, 801/23, G.I.D.C. Estate, Valsad District Gujarat 396195investorrelations@aarti-industries.com
http://www.aarti-industries.com
Management
NamePosition Held
Mr. Chandrakant Vallabhaji GogriChairman Emeritus
Mr. Rajendra Vallabhaji GogriChairman & Managing Director
Mr. Rashesh Chandrakant GogriVice Chairman & Mng.Director
Mr. Renil Rajendra GogriVice Chairman & Exe. Officer
Mr. Suyog Kalyanji KotechaExecutive Director & CEO
Mr. Parimal Hasmukhlal DesaiExecutive Director
Mr. Manoj Mulji ChhedaExecutive Director
Mr. Ajay Kumar GuptaExecutive Director
Mrs. Hetal Gogri GalaNon Executive Director
Mr. K V S Shyam SunderIndependent Director
Mr. Premchandra Amolak SethiIndependent Director
Mr. Bhavesh Rasiklal VoraIndependent Director
Mr. Lalitkumar Shantaram NaikIndependent Director
Mrs. Natasha Kersi TreasurywalaIndependent Director
Prof. Aniruddha B PanditIndependent Director
Mr. Shekhar S KhanolkarIndependent Director
Mr. Belur Krishna Murthy SethuramIndependent Director

FAQ

What is the latest fair value of Aarti Industries Ltd?

The latest fair value of Aarti Industries Ltd is ₹479.76.

What is the Market Cap of Aarti Industries Ltd?

The Market Cap of Aarti Industries Ltd is 19,333 Cr..

What is the current Stock Price of Aarti Industries Ltd as on 14 October 2024?

The current stock price of Aarti Industries Ltd as on 14 October 2024 is ₹533.

What is the High / Low of Aarti Industries Ltd stocks in FY 2024?

In FY 2024, the High / Low of Aarti Industries Ltd stocks is 770/438.

What is the Stock P/E of Aarti Industries Ltd?

The Stock P/E of Aarti Industries Ltd is 39.9.

What is the Book Value of Aarti Industries Ltd?

The Book Value of Aarti Industries Ltd is 146.

What is the Dividend Yield of Aarti Industries Ltd?

The Dividend Yield of Aarti Industries Ltd is 0.19 %.

What is the ROCE of Aarti Industries Ltd?

The ROCE of Aarti Industries Ltd is 7.47 %.

What is the ROE of Aarti Industries Ltd?

The ROE of Aarti Industries Ltd is 8.22 %.

What is the Face Value of Aarti Industries Ltd?

The Face Value of Aarti Industries Ltd is 5.00.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Aarti Industries Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE