Aarti Inds snaps 3-day losing trend

Aarti Industries jumped 5.12% to Rs 910.85 on BSE on bargain hunting after a recent slide.

Shares of Aarti Industries skid 7.11% in the past three trading sessions to settle at Rs 866.50 yesterday, 15 June 2020, from its close of Rs 932.90 on Wednesday, 10 June 2020.

Meanwhile, Smallcap World Fund Inc sold a total of 25,97,950 shares, or 1.49% equity, on Monday (15 June) via bulk deals on BSE and NSE. As of 31 March 2020, Small Cap Fund Inc. held 1.71% stake in Aarti Industries.

Shares of Aarti Industries tumbled 5.63% to 866.50 on Monday after the company said it received an early termination notice from a customer.

In June 2017, AIL announced a 10-year contract with a global agrochemical major to supply a high-value agrochemical intermediary. The contract was expected to generate revenue of about Rs 4000 crore over the 10 year period. On 15 June 2020, AIL received a notice from the customer, opting to terminate the said contract citing a change in strategy. The customer has chosen to source the active ingredient rather than manufacturing it.

However, due to early termination of contract, AIL is eligible for a compensation ranging between $120 million to $130 million.

The scrip is down 11.17% in a month. On the technical front, the stock's RSI (relative strength index) stood at 43.083. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30.

The stock was trading between its 50-day moving average (DMA) placed at 966.51 and its 200-day moving average (DMA) placed at 874.38.

Aarti Industries' consolidated net profit slipped 13.2% to Rs 110.35 crore on a 5.7% decline in net sales to Rs 1,076.15 crore in Q4 March 2020 over Q4 March 2019.

Aarti Industries is a manufacturer of specialty chemicals and pharmaceuticals. The company operates through three segments: speciality chemicals, pharmaceuticals, and home & personal care chemicals.

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