Aarti Industries hits lifetime high; surges over 100% in 2015

The stock hit a record high of Rs 558 and rallied 121% thus far in 2015 from Rs 253 compared to 6% decline in Sensex.

Aarti Industries has rallied 8% to Rs 558, also its record high on the BSE, as Motilal Oswal has initiated coverage with a buy rating. It has set a target price of Rs 630 per share.

The stock of speciality chemicals & pharmaceuticals firm has outperformed the market by appreciating 121% thus far in 2015 from Rs 253 as compared to nearly 6% decline in the S&P BSE Sensex.

Post June quarter results the stock rallied 47% from Rs 380 on August 5, 2015 against 8% fall in the benchmark index.

The company had reported 47% year-on-year growth in its standalone net profit at Rs 60.90 crore for April-June quarter (Q1FY16) against Rs 41.43 crore in the corresponding quarter of previous year.

While announcing Q1FY16 results, the company said that the recently concluded USFDA inspection had been favorable for the company.

This would facilitate and expedite faster approvals for various Active Pharmaceutical Ingredients (APIs) in pipeline, thereby increasing the presence in the regulated markets, it added.

Ravi Shenoy analyst at Motilal Oswal in report dated September 30, 2015 said that the company plans to demerge its three business verticals: (a) specialty chemicals, (b) pharma API and (c) home & personal care chemicals, and list each separately. This will help re-rate the specialty chemicals business as well as pharma API. Pharma is a high-margin and potential high-growth business in a nascent stage.