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Yes Securities Report
Aarti Industries Ltd.'s Q3 FY23 adjusted Ebitda at Rs 2.887 billion (up 36% YoY; up 8%), stood below ours but above street estimates. The YoY growth stemmed from adjustment for shortfall fee of Rs 6.8 billion in base quarter.
The nine-months-FY23 Ebitda stands at Rs 8.4 billion, as against an annual guidance of Rs 11 billion for FY23. While demand environment is challenging and tepid, specially in the textile segment, but Aarti Industries expects to achieve its annual Ebitda guidance.
The operating earnings compound annual growth rate over FY24-25 is expected at ~25%, with growth being back-ended towards FY25 leading to an Ebitda of Rs 17 billion (FY25E), as brownfield Nitro Chloro Benzene expansion, along with specialty chemical blocks at Vapi gets commissioned by H1 FY24.
The LT-3 contracts is also commissioned and ramping up to contribute to earnings in FY24 and FY25. Growth beyond FY25 would be aided by the Rs 30 billion capex being undertaken over FY24-25, most of which is aimed at production of new higher value molecules.
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