Aarti Industries shares tank 15% amid concerns over EBITDA guidance, dumping from China

The stock plunged to a low of ₹605.75 apiece on the National Stock Exchange (NSE), which was down 17% as against the last closing price.

As trading progressed, the shares marginally recovered and were trading at ₹625.25 apiece at 2:35 pm, still down 14.9% as compared to the previous session's close.

The decline in stock comes a day after the company's management, during a post earnings concall, reportedly said that the earnings before interest, taxes, depreciation and amortisation (EBITDA) guidance of ₹1,450 crore would be decided after assessing the global landscape.

This comes in the backdrop of global volatility in prices in the speciality chemicals segment, and China being considered as a major factor in influencing the rates as the country can dump cheaper products.

Net profit doubles YoY in Q1

Aarti Industries' net profit came in at ₹137 crore in the quarter ended June 2024, which was nearly double as compared to ₹70 crore in the year-ago period. It, however, missed the estimate of ₹148 crore shared by news agency Bloomberg.

On a sequential basis, the net profit rose slightly from ₹132 crore in the March 2024 quarter.

The revenue from operations rose to ₹1,848 crore, which was up 31% year-on-year and 5% quarter-on-quarter. The company sees revenue in the range of ₹3,500 crore to ₹3,800 crore in fiscal year 2024-25.

The EBIDTA margin during the quarter under review stood at 16.5%, 220 basis points higher as compared to 14.3% in Q1FY24, 50 basis points higher as against 16% in Q4FY24.

Notably, Aarti Industries' shares are down more than 4% year-to-date. However, the stock has given returns in excess of 35% over the past 12 months.