Chemical stock jumps 19% after reporting 189% YoY increase in net profits

Synopsis: Aarti Industries’ shares rose 19% after Q3 results, with revenue up 26% YoY to ₹2,319 crore and net profit surging 189% YoY to ₹133 crore, and easing over tariff as the US has reduced tariffs on Indian specialty chemical exports from over 50% to 18%

The shares of the Small-Cap company specializing in specialty chemicals and pharmaceuticals, with a core focus on benzene- and toluene-based derivatives, are in focus following their Q3 results, with a 189 percent rise in net profits and easing over tariff.

With a market capitalization of Rs. 15,178.20 Crores on Tuesday, the shares of Aarti Industries Limited jumped up to 18.9 percent, reaching a high of Rs. 443.90 compared to its previous close of Rs. 373.15.

What Happened

Aarti Industries Limited, engaged in specialty chemicals and pharmaceuticals, with a core focus on benzene- and toluene-based derivatives, is in the spotlight today as it has announced its Q3 results as follows:

Its Revenue from operations (Net) rose by 26 percent YoY from Rs. 1,843 Crores in Q3FY25 to Rs. 2,319 Crores in Q3FY26, and it rose by10 percent QoQ from Rs. 2,100 Crores in Q2FY26 to Rs. 2,319 Crores in Q3FY26.

Its Net Profit YoY rose by 189 percent from Rs. 46 Crores in Q3FY25 to Rs. 133 Crores in Q3FY26, and on a QoQ basis, it rose by 24 percent from Rs. 106 Crores in Q2FY26 to Rs. 133 Crores in Q3FY26. The earnings per share (EPS) for the quarterly period stood at Rs. 3.67, compared to Rs. 1.27  in the previous year’s quarter.

Along with it, India has achieved a major trade breakthrough with the United States. The US has reduced tariffs on Indian specialty chemical exports from over 50% to 18%, making Indian products cheaper than Chinese exports. The US imports nearly $6 billion worth of chemicals from India, about 20% of India’s total chemical exports.

Earlier, for Aarti Industries, the tariffs varied across product categories, with a significant portion of volumes facing full duties. Around 40% of the company’s export volumes were paying the highest tariff rates, which impacted competitiveness and margins. The revised tariff structure is expected to sharply reduce this burden and improve pricing power.

Aarti Industries, established in 1984 by first-generation technocrats, is a leading specialty chemicals company with integrated operations and a focus on high-cost optimization. Its key value chains include Nitro Chloro Benzenes, DiChlorobenzenes, Phenylenediamines, Nitro Toluene, and Sulphuric Acid & downstream products. The company offers over 100 products to more than 1,100 domestic and global customers across 60 exporting countries.

The company emphasizes strategic partnerships, including feedstock assurance, technology sharing, joint product development, and manufacturing outsourcing. It has strong R&D capabilities with proprietary technologies for customized products and operates two state-of-the-art research centers.

Aarti Industries’ manufacturing footprint includes 16 plants, 11 zero liquid discharge facilities, and 5 cogeneration power plants. Strategically located in western India near ports, the company efficiently serves both domestic and international markets with a workforce of over 6,000 employees.

Aarti Industries expects consistent volume growth over the next three years, driven by increased capacities. Capex for FY26 is estimated at Rs. 1,100 Crores, with a target EBITDA of Rs. 1,800–2,200 Crores, a Debt/EBITDA ratio below 2.5x, and a ROCE exceeding 15%.

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