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

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

Upstox
By Upstox News Desk

2 min read | Updated on August 13, 2024, 15:01 IST

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SUMMARY

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.

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DEGUMSYOIL
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The stock pared early gains to trade at ₹601.2 apiece, down 0.96%, on the BSE at 2:20 pm

Aarti Industries' shares nosedived a day after the company suspended the EBITDA guidance for FY25

Shares of speciality chemicals maker Aarti Industries tanked around 15% on Tuesday, August 13, in the aftermath of the concerns raised over the company's EBITDA guidance and the potential pressure on margins due to the dumping of rival products 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.

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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.

The tensions in the Middle East could also play a role in determining the EBITDA guidance, as the company admitted that logistical issues arising from disruptions in the Red Sea could negatively impact the volume in some segments, Moneycontrol reported.

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.

About The Author

Upstox
Upstox News Desk is a team of journalists who passionately cover stock markets, economy, commodities, latest business trends, and personal finance.

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