Is Aarti Industries set for strong growth? Detailed analysis by Rohit Nagraj, Centrum Broking Ltd

"Projects which were in CWIP were in process. They will be commissioned in AI 25 now, so the benefit of that will start coming to you after F 26."

"Aarti's capex plans are huge. In 2025, this company is targeting a capex of Rs 1500 to 1800 crores"

"Again there is a capex plan which is significantly higher, almost 2000 crore capex plan. Perhaps after that your capex intensity will reduce a bit"

"now its plan is to tap the energy segment what does this indicate for the future of the company so Aarti has always been among the top in terms of their R&D capabilities energy space the basic idea is that it is an expanding space growing space India is just starting to enter into the space so we have a long way to go"

"Battery manufacturing I think it probably will be the first one to start some in 26-27 now"

"Now obviously that relationship they have taken it forward that together we can explore certain opportunities and that I think the effect will come. We will have to wait for three to four years. The project will come, it will be commissioned, after that how the market looks like, margins will look like."

"So if you are taking FI 24, then there your business was just recovering, but in 22-23 the business was impacted severely, plus as we discussed that their first long term contract was cancelled, due to that your asset is in your books, but that asset is not giving you any return, current and the asset is actually impacting your profitability because the asset is getting depreciated, due to the debt taken on it, interest is also coming, so these things were impacting your PNL a lot"

"Now you are in a position that your global recovery is on track. So if that recovery is coming for you, then obviously it is positive for the sector. It may be slightly more beneficial for Aarti because you were not getting any benefit from the projects that you had commissioned because the industry was not doing well. Now you will be able to do that."

"if your sector is now gradually recovering and Aarti is in a sweet spot in terms of the investments they have made and the investments you are going to receive, then if we keep both these factors in mind, they should be in a better position from here."