Aarti Industries Limited (AARTIIND)
Small CapChemicals stocks · Small cap · NSE
Aarti Industries is a diversified global chemical manufacturer with a cost-competitive product portfolio and expansive geographic footprint. It serves energy (40% revenue), agrochemical, dyes/pigments/paints, polymers, and pharma applications, leveraging operational scale and customer relationships.
One read, four checks
75+ is strong, 60-74 is usable, 45-59 is mixed, and below 45 needs caution. These are research lenses, not buy/sell instructions.
Weak fundamentals, management trust is acceptable, price trend is neutral, and recent execution is consistent.
Fundamental lens: valuation, quality, growth, balance sheet, and cash flow.
low confidence · 1/4 claims checked
Timing lens: price trend and sector relative strength.
Rolling lens: recent quarterly delivery, not the latest single-result score.
Quarter ended 30 Jun 2026
Excellent · 100/100Rev +43% YoY · PAT +260% YoY · margin expansion · +8% QoQ · operating leverage
| Metric | This quarter | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,387 Cr | +42.5% | +8.3% |
| EBITDA | ₹382 Cr | +80.2% | +12.0% |
| Operating margin | 16.0% | +300 bps | +100 bps |
| PAT | ₹155 Cr | +260.5% | +13.1% |
| PAT margin | 6.5% | +392 bps | +28 bps |
NDF means not disclosed in the current structured filing feed. It is intentionally not treated as zero.
Business & thesis
Growth engines, tailwinds/headwinds, and risk radar from management commentary
Business & thesis
Growth engines, tailwinds/headwinds, and risk radar from management commentary
Where growth can come from, and what can break the case
Q4 FY26 revenue grew 9% YoY to INR2,422 Cr, EBITDA 29% YoY to INR342 Cr, and PAT 43% YoY to INR137 Cr, driven by stable domestic demand and export volumes. Full-year FY26 saw 12% YoY revenue growth to INR9,018 Cr, 15% EBITDA growth to INR1,172 Cr, and 27% PAT growth to INR419 Cr, reflecting steady execution and utilization gains.
Strong Q4 and FY26 financial growth driven by volumes and utilization. However, geopolitical tensions in the Middle East, elevated raw material prices, and increased freight costs are significant near-term headwinds. Working capital expanded, leading to higher net debt. Key Zone IV projects are delayed by 3-4 months.
New Long-Term Contracts
Concluded a 15-year backward integration contract (INR200-250 Cr capex) and a $150M multi-year agrochemical supply agreement (no incremental capex).
Improving Capacity Utilization
Performance reflects improving capacity utilization; further upside possible in select chains like DCB and ethylation.
Operational Efficiencies
Benefits coming from operational efficiencies and cost optimization initiatives are on track.
New Assets Commissioning
Incremental contributions from recently commissioned and upcoming assets, including Zone IV projects and Augene JV.
Energy Application Expansion
Expansion to 360 KTPA is on track and expected to be commissioned soon.
Zone IV Projects
Multipurpose plant and PEDA plants under commissioning trials, expected to come on stream soon. Others will commission gradually in next couple of quarters.
Augene JV
Superform joint venture is on track for commissioning in H1FY27, focusing on agrochemicals and coating end markets.
Circularity Initiatives
Commissioning on track for CY26.
Stable Domestic Demand
Q4 FY26 revenue growth was driven by stable domestic demand.
Chinese Anti-Involution Stance
China's anti-involution stance and impact to products related to PNCB in the NCB chain should start seeing benefits from Q1 FY27 onwards.
EV Market Demand for Polymers
Polymers application is in a strong growth phase, especially demand and volume driven due to applications in the EV market.
Industry Consolidation in China
Increasing scrutiny on nitration chemistry assets in China may force smaller, inefficient operators out, leading to industry consolidation.
Geopolitical Tensions in Middle East
Escalation of geopolitical tensions led to disruptions across global supply chains, impacting trade flows, logistics, and input costs. Volumes for energy application were down 4% QoQ.
Elevated Raw Material Prices
Prices of key raw materials like benzene, sulfur, aniline, toluene, methanol went up by over 60%, causing working capital expansion and higher interest expenses.
Elevated Freight Rates
Freight cost significantly increased in the current quarter, driven by higher export shipments and fuel rates.
Margin Pressure
Continued margin pressure over a significant part of the portfolio, particularly in agrochemical applications and MPDA due to Chinese competition.
Geopolitical Volatility
The situation in West Asia poses near-term risk to critical feedstock availability and product placement in the Middle East.
Raw Material Price Volatility
Ongoing volatility in refining product margins and supply chain risk related to key raw materials adds near-term risk. Crude at $140-150/barrel could further strain working capital.
Working Capital Normalization
Working capital requirements expanded, and normalization might take some time due to dynamic export regions and voyage times.
Project Execution Delays
Zone IV projects were delayed by 3 to 4 months due to contract labor constraints, impacting the realization of EBITDA potential in the given timeframe.
Management accountability
What management said, and what results must prove
Management accountability
What management said, and what results must prove
What management said, and what results must prove
Issuer guidance and extracted claims are tracked against later reported outcomes. Treat these as management statements, not IndiaPulse forecasts.
YoY comparison is essential to assess overall business growth and profitability trends, especially for a diversified chemical company. QoQ is crucial to understand the immediate impact of geopolitical disruptions, raw material volatility, and sequential volume changes, particularly in the energy segment.
Q4 FY26 Revenue
INR2,422 crore, representing a growth of 9% Y-o-Y.
Q4 FY26 EBITDA
INR342 crore, growing 29% Y-o-Y.
FY26 Revenue
INR9,018 crore, up 12% on a Y-o-Y basis.
FY26 EBITDA
INR1,172 crore, up 15% on a Y-o-Y basis.
Strategic Integration & Capital Efficiency
New long-term contracts mark a strategic shift towards deeper integration, enhanced earnings visibility, and improved capital efficiency.
Capex Optimization
Capex for FY27 is expected to be INR700-800 Cr, focusing on optimizing capital allocation and investing in niche, high-return projects.
Profitability Improvement Initiatives
On track to implement initiatives including higher operating leverage, cost optimization, and contributions from new assets.
Net Debt Reduction
Anticipates net debt to decline in the current year due to lower capex intensity and improving cash flow, targeting 2.5x net debt to EBITDA in 2 years.
Numbers and claims to verify in the next filings
| Checkpoint | Current evidence | What to verify next |
|---|---|---|
| Zone IV Project Commissioning | Multipurpose plant and PEDA plants under commissioning trials; Calcium chloride plant under operation, ramping up. Others gradually in next couple of quarters. | Full commissioning of all 5 chemistry blocks within FY27 and subsequent revenue accruals from Q2 FY27. |
| Middle East Geopolitical Situation | Geopolitical disruptions impacting exports, volumes down 4% QoQ in energy. Full impact expected in Q1 FY27. | Stabilization of West Asia situation and resumption of trade flows to Dubai and Oman markets. |
| Working Capital Days | Expanded due to elevated raw material prices and higher export share (longer voyage times). | Normalization of raw material prices and working capital cycle towards 55-60 days average levels. |
| Net Debt to EBITDA | ~3.6x (FY26). | Reduction in net debt levels in FY27 as capex intensity lowers and operating cash flow improves, targeting 2.5x in 2 years. |
Verification checkpoints are IndiaPulse research interpretation, not investment advice.
Show extracted source claims
Our capex for FY27 is expected to be in the range of INR700 crore to INR800 crore as we continue our journey to optimize capex and maximize the returns.
"Our capex for FY27 is expected to be in the range of INR700 crore to INR800 crore"
Our capex for FY27 is expected to be in the range of INR700 crore to INR800 crore as we continue our journey to optimize capex and maximize the returns.
"Our capex for FY27 is expected to be in the range of INR700 crore to INR800 crore"
Our capex for FY27 is expected to be in the range of INR700 crore to INR800 crore as we continue our journey to optimize capex and maximize the returns.
"Our capex for FY27 is expected to be in the range of INR700 crore to INR800 crore"
Net debt is anticipated to decline in the current year (FY27) due to lower capex intensity.
"we still anticipate the net debt to decline in the current year"
Outcome check: PAT YoY averaged 260.5% across 1 later quarter(s).
Net debt is anticipated to decline in the current year (FY27) due to lower capex intensity.
"we still anticipate the net debt to decline in the current year"
Net debt is anticipated to decline in the current year (FY27) due to lower capex intensity.
"we still anticipate the net debt to decline in the current year"
Augene, the Superform joint venture, is on track for commissioning in H1FY27 with an initial focus on agrochemicals and coating end markets.
"Augene, the Superform joint venture is on track for commissioning in H1FY27"
Augene, the Superform joint venture, is on track for commissioning in H1FY27 with an initial focus on agrochemicals and coating end markets.
"Augene, the Superform joint venture is on track for commissioning in H1FY27"
Trend score and candlestick chart
58NeutralSMA20 +7.2% / mo · MACD −
Technical chart
AARTIINDdaily · 1Y · AUTO+16.6%Daily technical trend read
Mixed signalsSignals are conflicting — long-term uptrend intact. RSI 39. Wait for confirmation.
- Price above SMA200 (long-term uptrend) but mid-term MAs not aligned.
- SMA20 rising (~6.7% over last month) — short-term momentum positive.
- RSI(14) at 39 — falling, no extreme reading.
- MACD below signal, histogram expanding negatively — bearish momentum building.
- 11% off 52W high · 46% above 52W low.
Mechanical read from the price + indicator series above. Not a recommendation — technical setups can reverse without warning, especially around earnings and macro events.
Relative Strength & Trend Stage
- Price is 4.9% above the 30-week proxy.
- The 50-DMA is above the 30-week proxy and its slope is rising +4.5%.
- Both 3-month and 6-month returns are positive.
Valuation & score drivers
U-Score 20 · OVERVALUED · pillar breakdown, sector model, fair-value anchor
Valuation & score drivers
U-Score 20 · OVERVALUED · pillar breakdown, sector model, fair-value anchor
Fundamental score breakdown
OVERVALUEDWhy this score?
Top U-Score contributors and drags from the latest stored fundamentals.
Positive drivers
- Piotroski is strong at 7/9.
- Balance sheet contributes 4/15 to the score.
- Growth contributes 6/25 to the score.
Main drags
- Fair-value margin of safety is negative at -555.2%.
- Quality is weaker at 0/20; verify the latest quarterly trend.
- Valuation is weaker at 3/30; verify the latest quarterly trend.
Cyclical valuation: normalized earnings, not just trailing PE
Cyclical companies can look cheapest near peak profits, so IndiaPulse flags value-trap risk separately.
Stored run vs live recompute
This shows the stored score trend when snapshots exist, and also compares the latest stored nightly score with a live recompute from current fundamentals and price.
Score history
12 stored score snapshots. Latest stored move: +1 points.
Factor attribution
Modelled fair value
Trust score
Does management behaviour match later outcomes? Claim delivery, forensic breakdown, evidence depth
Trust score
Does management behaviour match later outcomes? Claim delivery, forensic breakdown, evidence depth
Trust asks: does management behaviour match later outcomes? Higher is better, but confidence and evidence depth matter as much as the number.
Mixed Trust: Management has 0% delivered/partly-delivered outcomes on 1 checked claims, with 1 adverse claim outcome. It ranks around the 45th percentile of the scored universe and 28th percentile within Chemicals. Main check: financial discipline is weak at 40/100.
Healthy Trust Lite: Promoter pledge is zero. Key concern: ROCE is low at 6.9%.
Usable, but needs evidence. Treat guidance with a margin of safety.
overall median 67 · Chemicals: 28th pctile, median 73 · Small: 50th pctile, median 66
142 documents have extracted text, but claim history is not strong enough yet.
1/4 claims checked · 1 contradicted/failed claim
How to read this Trust Score
Mixed Trust · low confidenceRead Trust alongside U-Score, result consistency, and technical trend. A cheap stock with weak Trust needs a larger margin of safety; a high Trust score does not make an expensive stock attractive by itself.
Forensic breakdown
Read low sub-scores as due-diligence warnings, not automatic sell signals.
Trust positives
- ▸Promoter pledge is zero.
- ▸4/4 latest quarters had positive YoY revenue growth.
- ▸4/4 latest quarters had positive YoY PAT growth.
- ▸Latest 3 quarters had positive YoY PAT growth.
Trust risks
- ▸ROCE is low at 6.9%.
- ▸ROE is low at 7.1%.
- ▸4 older quarters in the 8-quarter window had PAT decline worse than 25% YoY.
Trust Lite uses financial behaviour only. Prefer claim-tested Trust when enough concall claims have later outcomes.
Financials
Full fundamentals table and 10-year revenue / profit / ROE history
Financials
Full fundamentals table and 10-year revenue / profit / ROE history
Fundamentals
Valuation
- P/E
- 34.20
- P/B
- 3.00
- EV/EBITDA
- 12.54
- Market Cap
- 17848.00Cr
Profitability
- ROE
- 7.13%
- ROCE
- 6.86%
- ROA
- 3.99%
- Dividend Y
- 0.20%
Growth (CAGR)
- Revenue 5Y
- 13.00%
- EPS 5Y
- -5.00%
- Revenue 3Y
- 8.00%
- EPS 3Y
- -9.00%
Balance Sheet
- Debt/Equity
- 0.83
- Interest Coverage
- 3.67×
- Altman Z
- 3.24
- Book Value
- 164.00
Cash Flow
- FCF Yield
- —
- FCF Positive Y
- 2/5
- OCF
- 781.00 Cr
- EPS TTM
- 14.64
Shareholding
- Promoter Hold
- 41.82%
- Promoter Pledge
- 0.00%
- Momentum 52W
- 72%
Financial History
Updated 5/9/2026
Revenue
₹ CrNet Profit
₹ CrReturn on Equity
%Peers
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Peers
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Peers
Business-comparable peers in Chemicals — ranked by industry, sub-sector, theme-tag overlap, market cap, and U-Score similarity. Green cells mark the best available peer metric in this table.