Aarti Industries — Preparing For 2023 And Beyond: Systematix

Systematix Research Report

We visited Aarti Industries Ltd.’s Dahej and Jhagadia plants in Gujarat. Management is gearing for its next round of growth by-

1. introducing the chlorotoluene chain, which it would have a range of products,

2. signing a binding term sheet with Deepak Fertilisers to supply Rs 80 billion of nitric acid over the next 20 years,

3. expanding nitro chloro benzene  capacity and likely bringing its specialty chemical plants on stream in the next two quarters, which it believes would generate revenue in H1 FY24, and

4. entering new chemistries like photochemistry, vapour phase technology and flow chemistry technology.

We expect Aarti Industries' capacity expansions, venture into new chemistry and -added products to drive growth FY25 onwards.

Key risk: Slower-than-expected recovery in discretionary product demand and lower added products offtake.

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