Shares of Aarti Industries Ltd plummeted 9.99% to a 52-week low on 11 November after the company announced its quarterly earnings for July-September. 

The company’s net profit slumped by 43% year-on-year (YoY) to Rs 52 crore for the quarter under review from Rs 91 crore reported in the same quarter of the previous fiscal year. The decline in net profit was caused due to higher expenses and weak operational performance. 

However, revenue from operations of the company stood at Rs 1,628 crore, marking a 12% YoY increase compared to Rs 1,454 crore in the same quarter last year. The increase in revenue was due to the company’s efforts to expand market reach and diversify its product offerings. 

The earnings before interest, tax, depreciation, and amortisation (EBITDA) margins of the company contracted by 390 basis points to 12.1% compared to 16% in Q2FY24. 

In Q2, Aarti Industries saw robust growth across most segments, achieving an overall volume increase of 22% year-over-year (YoY) and 11% quarter-over-quarter (QoQ), with strong performance in applications like dyes, pigments, and polymer additives. However, the agrochemicals segment continued to show softness.

The energy segment, by contrast, experienced a volume drop of 1% QoQ and 36% YoY due to reduced gasoline-naphtha cracks, while MMA volumes dropped approximately 35% QoQ, which affected the overall results.

The company anticipates that the gasoline-naphtha delta will stay low through Q3, with potential for recovery in Q4 driven by seasonal U.S. demand. Despite some new MMA production by Chinese and Indian companies, Aarti Industries maintains a larger capacity.

At 1:47 pm, the shares of Aarti Industries were trading 8.24% lower at Rs 435.30 on NSE.

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