chemicals

Aarti Industries

AARTIIND · Nifty 50

₹479.2

Price 2026-06-17

BROAD EXPANSION73% confidence

At a Glance

Sector Positionchemicals sector. Flow: neutral. is not among current leaders. Regime: BROAD EXPANSION (73%).
Fundamental Score85/100 (STRONG). 2 positive flags, 3 concerns.
Historical Context61 similar technical setups. Average outcome: -9.7% decline. 0% positive.

Fundamental

85/100

STRONG

Trust

95/100

Verification

Coverage

44/100

LIMITED

Quick Take

Aarti Industries scores 85/100 on fundamentals (strong). Aarti Industries: BROAD EXPANSION regime.

Fundamental Score: 85/100 · STRONG · 3 signals detected

DuPont Analysis

ROE 6.9% broken into three drivers. Each shows how efficiently the company generates returns.

ROE6.9%=
5.0%Net Margin
×
0.6xTurnover
×
2.2xLeverage

ROE of 6.87% is modest margin-driven and stable. Net margin of 5.0% × asset turnover of 0.61x × leverage of 2.2x.

What This Means

Net margin of 5.0% means the company keeps ₹5.0 as profit for every ₹100 of revenue. This is a moderate-margin business. Asset turnover of 0.61x means the company efficiently uses its assets to generate revenue. Leverage of 2.2x means the company uses moderate debt. Returns are primarily driven by operations, not borrowing.

Margin Structure

Gross

35.9%

Operating

8.2%

Net

5.0%

improving

Gross margin 35.9% → operating margin 8.2% → net margin 5.0%. Margins are IMPROVING. Strong pricing power with stable gross margins suggests the improvement is from operating leverage — sustainable.

Financial Health

Earnings Quality

STRONG

Cash flow covers net income 1.9x — earnings are HIGH QUALITY. The company converts profit to cash efficiently.

Debt Sustainability

ADEQUATE

Interest covered only 2.2x — stretched. Rising rates could pressure profitability. Debt/EBITDA at 4.4x is high — monitor leverage.

Free Cash Flow

MODERATE

FCF margin at 9.6% — moderate. Generating cash after investments.

Peer Comparison

Aarti Industries is compared against 10 peers in the chemicals sector.

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Key Watchpoints

🟢

Breaks above ₹503 (+5%)

Trend reversal confirmation

🔴

Breaks below ₹455 (-5%)

Further downside risk

🟢

Chemicals sector entering leadership

Sector rotation signal

Detected Patterns

✅ Cash Flow Inflection: FCF turned positive after negative periods — major transition
➡️ Leverage Slowly Rising: Debt growing faster (29.1%) than equity (6.2%)
✅ High Earnings Quality: Cash flow covers earnings 1.9x — strong cash conversion

Risk Flags

🔴 1 Critical⚠️ 2 Warning✅ 2 Positive5 total flags
🔴Cash covers only 12% of current liabilities
Balance Sheet

Liquidity squeeze. Company may struggle to meet short-term obligations without refinancing.

⚠️55% of debt is short-term
Balance Sheet

High refinancing risk. Company needs to roll over debt frequently. Vulnerable to credit market freezes.

⚠️Working capital changes are 52% of operating cash flow
Cash Flow

Working capital is consuming significant cash. Operational efficiency declining.

✅Minimal unusual items — clean earnings
Earnings Quality

Profits are from core operations, not one-offs. High quality.

✅Receivables decreasing — 8.5% of revenue
Cash Flow

Collection cycle changing. Collection improving — positive for cash flow.

⚠️ 1 critical + 2 warning flags. Exercise caution.

Data Quality

95/100All ratios self-computed from verified sources. 🟢 5 years of financial data — sufficient for trend analysis

News Correlation

margin pressure (4)management outlook (4)
⚠️ Our margin analysis (improving) contradicts news reports of margin pressure — investigate

50 articles scanned for fundamental themes

Facts

P/E Ratio
38.2UNAVAILABLE
P/B Ratio
2.7HIGH
Market Cap
₹1597827.3L CrHIGH
From 52W High
92% of high
Sector Peers
10
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