Aarti Industries Seals Rs 6,000 Crore Long-Term Contract, Shares Surge 6%

18 Jan 2024 , 10:31 AM

Aarti Industries Ltd. has inked a Rs 6,000 crore long-term contract with a multinational conglomerate for the supply of a niche specialty chemical, as per an exchange filing.

The company’s existing capital expenditure programs align well with the requirements of the new contract, eliminating the need for additional capital expenditure and showcasing operational preparedness.

The contract spans four years and represents the company’s second such deal in the last month. On December 27, Aarti Industries signed a nine-year contract with Global Agrochem, with revenue potential exceeding Rs 3,000 crore.

Shares of Aarti Industries surged by 7% in early Thursday trade, marking the stock’s best single-day gain in two months. Aarti Industries’ shares, currently trading 6.05% higher at Rs 618.03, have retraced from the opening highs.

The specific chemical involved in the contract is integral to Aarti Industries’ long-term growth strategy, experiencing consistent volume growth over the last four to five years.

The ongoing capital expenditure program is deemed sufficient to meet the contract requirements, obviating the need for additional capex.

Despite prevailing macro-economic challenges, the company’s ability to secure such contracts underscores its robust expertise in diverse chemistries, according to Aarti Industries Chairman & Managing Director Rajendra V Gogri.

For feedback and suggestions, write to us at [e-mail]