"Aarti Industries Surges 13% in 2 Days Following the Acquisition of Rs. 6,000 Crore Long-Term Contract"

Aarti Industries' (AIL) shares experienced an 8% surge on the BSE, reaching Rs. 658.70 during Friday's intra-day trade, accompanied by substantial trading volumes. The average trading volumes on the counter increased more than four-fold, with a combined 6.04 million equity shares of the company changing hands on the NSE and BSE.

Over the past two days, the specialty chemicals company's stock has witnessed a remarkable 13% increase, attributed to the announcement of a four-year supply contract valued at over Rs 6,000 crore with a multinational conglomerate.

AIL recently inked a long-term agreement with the multinational conglomerate for the supply of a niche specialty chemical, anticipating revenue generation exceeding Rs 6,000 crore. The product, integral to AIL's long-term growth strategy, has consistently demonstrated volume growth over the past 4-5 years.

The company assured that its ongoing capital expenditure programs are sufficient to meet the contract requirements, eliminating the need for additional capital expenditure related to this contract.

Earlier, on December 27, AIL disclosed a long-term supply contract with a global agrochemical major for a niche agrochemical intermediate. This contract holds a revenue potential of over Rs 3,000 crore over a period of 9 years, with contract supplies commencing in the current fiscal year. The agrochemical intermediate serves as a crucial input component for a widely used herbicide applied in diverse food and cash crops.

During the Q2 earnings call, the management expressed optimism regarding potential demand revival in end-use segments, such as agrochemicals, polymer additives, and other discretionary applications."

BS