Aarti Industries Expects 9-10% Volume Growth in FY25 and FY26
Aarti Industries, a leading chemical company, is expecting a volume growth of about 9-10% in both FY25 and FY26. This positive [[business]] [[news]] comes from the company’s Executive Director and Chief Executive Officer, Suyog Kotecha. He shared this [[latest]] update in an interview, stating that the growth will be driven by improvements and capacity expansion.
Capacity Expansion to Fuel Growth
Mr. Kotecha highlighted that two new capacity additions and a greenfield site are expected to drive the company’s volumes over the next eight quarters. Two capacities have already been commissioned in recent months, and their ramp-up is expected to continue in the coming quarters. The new greenfield site, planned for the next financial year, will take some time to become fully operational, but is expected to significantly add to volumes over the next six to eight quarters. This is big [[business]] [[news]] for Aarti Industries, as these developments point towards strong, sustained growth in the near future.
Margins Expected to Recover Sooner Than Expected
In other positive [[news]], Mr. Kotecha also shared that the company anticipates surpassing its earlier margin guidance sooner than predicted. The company had earlier reported an 11.2% year-on-year decline in its Q3 Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) at Rs 231 crore, with EBITDA margin contracting to 12.6% from 15% last year. However, the CEO believes that they were “prudent” in setting their expectations and the [[market]] situation might improve faster than anticipated. This is a significant [[market]] development and points towards Aarti Industries’ strong [[business]] [[analysis]].
Margin Guidance Based on Current Market Conditions
Mr. Kotecha emphasized that the margin guidance provided by the company is based on the current [[market]] conditions. He highlighted that certain value chains where the company operates have seen significant capacity buildup, especially in China. He noted that the global demand needs to pick up for the margins to recover. Based on current [[market]] demand and supply dynamics, it is estimated that margin recovery could take over two years. However, the company remains optimistic about achieving a 15% EBITDA margin and will continue to monitor the market situation closely. This insightful [[market]] [[analysis]] provides valuable context for Aarti Industries’ growth prospects.
Stock Performance
Aarti Industries’ shares closed 0.42% higher at Rs 454.5 apiece on the NSE on Tuesday, outperforming the benchmark Nifty 50’s rise of 0.89%. This positive stock [[market]] update reflects investor confidence in the company’s future prospects. This [[business]] [[news]] indicates positive sentiment towards Aarti Industries.
Conclusion
With its planned capacity expansion and optimistic outlook on margin recovery, Aarti Industries is positioned for continued growth in the coming years. These [[latest]] [[business]] [[updates]] signal positive momentum for the company. This [[analysis]] suggests that Aarti Industries is a company to watch in the chemical sector.
