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Aarti Industries Q4 PAT rises 23% YoY; board recommends 1:1 bonus issue – Business Standard

Aarti Industries posted a 23.3% surge in consolidated net profit to Rs 136.10 crore on 12.4% rise in net sales to Rs 1209.35 crore in Q4 FY21 over Q4 FY20.The chemical maker saw sustained revenue growth driven by volume expansion and 75% contribution from value-added products. The company said that demand for discretionary products has majorly returned to pre-covid levels. The pharma segment revenues were at record levels, profitability sustained as the product basket remains focused on value addition.

Profit before tax grew by 27.2% to Rs 173.05 crore in Q4 FY21 over Q4 FY20. EBITDA rose 18.9% year on year to Rs 260 crore in Q4 FY21. EBITDA margin improved to 19.3% in Q4 FY21 from 18.4% in Q4 FY20. The company added that gross margins have returned to normalized levels.

Depreciation increased 33.2% to Rs 65.64 crore in Q4 FY21 from Rs 49.28 crore in Q4 FY20. Increase in depreciation and fixed costs was due to commissioning of new manufacturing units. The company has estimated Capex for FY22-FY24 at Rs 4500 crore to Rs 5000 crore.

Aarti Industries registered a 2.4% fall in consolidated net profit to Rs 523.47 crore for the year ended March 2021 (FY21) compared with Rs 536.08 crore in the year ended March 2020 (FY20). Net sales increased 7.6% year on year to Rs 4,506.1 crore in FY21 over FY20.

Commenting on the performance, Rajendra Gogri, chairman & MD of Aarti Industries said, “We are now well-placed to be able to hit a high growth phase in FY22 and also on track to maintain our long term growth momentum, as guided earlier. During the quarter, we completed the commercialization of the balance for the chlorination project and also for the Phase 2 unit at Dahej SEZ. Next in line are projects related to second and third Long Term Contracts, NCB Expansion, Pharma Expansion, etc, which are expected to be commissioned over the next few quarters, providing the planned growth acceleration in coming periods. With these current pipelines of projects under execution, we expect to be able to near double the current EBIDTA over a period of three years, i.e., by FY24. Our pharma business continues to deliver growth and margin expansion based on operating leverage from growing volumes and our focus on regulated markets and value-added products. We remain in line to expand capacities of both API’s and intermediates and we have a pipeline of several new products under development. Strategically, our focus remains on increasing the contribution from value-added chemistries within our portfolio – gaining prominence within the development programs of a large number of global innovators. We have backed this with investments in R&D, sustainability and other internal competencies in line with global best practices. In addition to the growth initiatives at our existing range of products, we also have an additional projects pipeline entailing a capex of over 3000 crore to be taken up in forthcoming three years. These will add a host of new products and chemistry which will add to the strength and further diversify the company. These projects will drive the growth of the company beyond FY24 and help the company maintain a growth momentum in the second half of this decade.”

The board has recommended issuing one bonus equity share for each equity share held (1:1) subject to approval of the shareholders of the company. The company said it will inform the record date in due course.

The board of the company has also declared a final dividend of Rs 3 per share (pre bonus) for the financial year ended March 2021.

The board has also approved raising funds by issuing equity shares or any other instruments or securities through qualified institutional placement, private placement/public issue of equity/debt securities, preferential issue or through any other permissible mode for an aggregate amount of up to Rs 1500 crore.

Aarti Industries is a manufacturer of specialty chemicals and pharmaceuticals.

Shares of Aarti Industries were down 3.5% at Rs 1685.25 on BSE.
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