Aarti Industries rallies 8% on Rs 6,000-cr chemical deal with multinational

Shares of Aarti Industries Limited surged 8.6 percent to Rs 633.5 intraday on January 18 after the company announced it has signed a long-term contract worth Rs 6,000 crore with a multinational conglomerate for the supply of a niche speciality chemical.

The contract involves the supply of the chemical for a period of four years, it said in an exchange filing. This is the second such contract signed by the company in the last month. On December 27, the company entered into a long-term, nine-year contract with a global agrochem company, with a revenue potential exceeding  Rs 3,000 crore.

The latest deal is expected to generate a revenue of over Rs 6,000 crore for the company.

At 11:35 am, the stock was trading at Rs 613, up 5.2 percent from the previous close on the NSE. The stock gained a marginal 6 percent last year, significantly lower than the Nifty, which jumped up to 20 percent.

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The product has been an integral part to Aarti’s long-term
growth strategy and its volume has consistently increased over the past 4-5 years. “AIL’s ongoing capital expenditure programmes will meet the contract requirements, and hence, AIL does not anticipate any additional capital expenditure for this contract.”

The customer is a part of a multinational conglomerate having diversified business interests. Aarti has established robust relationships with this customer and has been supplying the said product for the past five years.

“The contract comes despite macro-economic challenges the world is facing today which stands as a testament to our robust and innate expertise in diverse chemistries,” Chairman and Managing Director Rajendra V Gogri said.

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