Aarti Industries share price drops to a 52-week low after 17% fall in three sessions — Explained

Shares of Aarti Industries fell another 8% on Monday, November 11, following another 8% fall on Friday and a 2% drop last Thursday. The stock fell on Friday, ahead of its earnings, and has declined on Monday in reaction to its results.

The company lowered its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) guidance for the current financial year to ₹1,050 crore from ₹1,400 crore earlier. The company expects EBITDA to be around ₹1,800 to ₹2,200 crore in financial year 2028.

For the September quarter, Aarti Industries reported a revenue growth of 12% compared to the same period last year, while its EBITDA declined by 16% to ₹196 crore from ₹233 crore last year.

Aarti Industries' EBITDA margin narrowed by 400 basis points from last year to 12%, while its net profit nearly halved, declining by 43% year-on-year to ₹51 crore from ₹90 crore last September.

A sharp dip in margins of its key product Mono Methyl Aniline (MMA) impacted Aarti Industries' quarterly performance. MMA margins were impacted due to lower utilisation amidst higher channel inventory. MMA volumes fell by 35% sequentially, impacting the overall performance.

Overall margins of the company are under pressure due to new capacities in China.

On the positive side, the company said that barring its energy segment, most of its other segments saw healthy growth during the quarter.

Nearly 56% of the 25 analysts that have coverage on Aarti Industries now have a "sell" or equivalent rating on the stock. Among the others, eight have a "buy" rating, while three have a "hold" rating.

Shares of Aarti Industries are currently trading 7.3% lower on Monday at ₹439.55. Post this recent fall, the stock is down 33% so far in 2024.