Aarti Industries plans capex worth Rs 3,000 crore over next two years (2023)

  Aarti Industries Sets Strong Foundation for FY26 with Strategic Expansions and Sustainability Focus   


  • FY24-25 Full-Year Performance 
    • ● Revenue Growth: 13% 
    • ● EBITDA: ₹ 1016 Cr, aligned with revised guidance 
    • ● CAPEX: ₹ 1372 Cr focused on growth, energy efficiency, and innovation 
    • ● Dividend: Final dividend of ₹ 1 per share (20% of face value of Rs. 5/- each) recommended by the Board.
  • Business Highlights: 
    • ● Strong volume recovery in Nitro Toluene, NCB, and Ethylation-based products, supported by capacity additions. 
    • ● Sequential volume growth aided by refined pricing strategy and steady export demand; long-term offtake and spot flexibility maintained. 
    • ● Hybrid renewable energy shift through two power purchase agreements; set to deliver cost and carbon savings by FY27. 
    • ● Staggered commissioning of Zone IV projects in FY26 is expected to support multipurpose manufacturing capabilities in FY27 and onwards. 
  • FY25- 26 has commenced on a confident note, supported by a steady demand recovery across key segments and robust execution of AIL’s long-term growth roadmap. The company remains well-positioned to leverage emerging opportunities across global markets through its diversified portfolio, innovation-led solutions, and strong customer relationships.     
  • Aarti Industries Limited (AIL) is one of the world's leading speciality chemical companies, combining process chemistry with scale-up engineering competence. The Company ranks globally 1st – 4th position for 75% of its portfolio and is a “Partner of Choice” for various Major Global & Domestic Customers. At the heart of AIL’s operations is a dedication to sustainable development, seamlessly integrating environmental stewardship into its business model by leveraging cutting-edge technologies and a robust infrastructure to deliver solutions that balance economic growth with ecological responsibility. The Company’s commitment to innovative and sustainable practices and immense care for its people and the planet defines its path to success  

Aarti Industries: To emerge as a Global Partner of Choice 

  • To emerge as a Global Partner of Choice for leading consumers of speciality chemicals and intermediates
  • Pricing pressure continues to persist across various product chains.
  • New Growth Avenues leveraging AIL’s core strengths 
    • ● Sustainable manufacturing 
    • ● Newer Development Capabilities 
    • ● Customer Relationships
  • Strategic Alliances and CDMO 
    • ● Continue to promote India as manufacturing destination of choice and partner with customers for new India based investments 
    • ● Leverage R&D strength to provide CDMO services to key clients
  • Entry into Adjacent Markets and New Platforms 
    • ● Leverage current capabilities to newer applications like advanced materials, battery materials, defense, coatings segments 
    • ● Develop newer growth platforms in the space of sustainability / circularity
  • MPP and Zone 4 Commercialization 
    • ● R&D and MPP will support quick development, qualification and commercialization of new advanced chemistries 
    • ● Chlorotoluene commissioning and ramp up will open up new opportunities in Agro and Pharma business segments
  • Consistent volume growth over 3 yrs driven by increased capacities EBITDA for FY25 in line with the estimate of ₹1000-1050 crs given for the year 
  • Operating leverages and cost optimisation initiatives to drive EBITDA growth beyond volume growth Capex for FY26 estimated to be around ₹ 1000 Cr Target EBITDA range of ₹ 1800-2200 Cr in 3 years; 
  • Debt/EBITDA of <2.5x and ROCE of >15% 

https://youtube.com/shorts/nGhCFQaFLbg?si=gFnDKI7XbiciGblP

Aarti Industries plans capex worth Rs 3,000 crore over next two years (2023)

  • Specialty Chemicals manufacturer Aarti Industries is planning a capex of Rs 3,000 crore over the next two years, which it plans to fund via both internal accruals and debt.
  • The capex will help the company add new value-added products to its portfolio that will aid the company's EBITDA margin going forward.
  • The company's operating profit or EBITDA is likely to grow by a compounded annual growth rate (CAGR) of 25 percent over the next two years.
  • Notably, HDFC Securities had maintained its ‘buy’ recommendation on Aarti Industries with a price target of Rs 851 per share, citing its capex plans. “The company’s constant focus on capex and R&D will enable it to remain competitive and expand its customer base

About the author

Hi, My Name is Rounaq Bakshi.

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