Aarti Industries Hits Record High After Bagging New Order    

Shares of speciality chemical manufacturer Aarti Industries Ltd. went up by as much as 18.66 percent intraday to touch a new record of Rs 1,039.70 per share on the National Stock Exchange after the company said it had bagged an order from a global agriculture company worth Rs 4,000 crore. The order is spread over a period of 10 years, and Aarti Industries will supply a “high value” chemical used to produce herbicides, said the company in a stock exchange filing.

The order will add 8-10 percent to the company’s revenue per annum and around 50 percent to the bottomline, said Surya Patra, vice president of Phillipcapital India Private Ltd.

Aarti Industries will be setting up a new facility in Gujarat to service this order, said the company’s chief financial officer Chetan Gandhi, on the phone to BloombergQuint. The construction cost of Rs 400 crore will be funded through a mix of debt and equity, he added, and should be ready well before financial year 2019-2020, when its expected to start servicing the order.

The chemical manufacturer already has 16 manufacturing units spread across Gujarat and Maharashtra. The company is targeting a volume growth of 10-15 percent in the ongoing fiscal said Gandhi.

While he refused to name the customer, Gandhi did reveal that the order was from a global player and not an Indian company. Aarti Industries’ key clients include BASF Ltd., Solvay, Atul Ltd., Clariant Ltd., Bayer Ltd., UPL, Dow and DuPont among others. 50 percent of the company’s revenue comes from exports.

The stock has returned 36.87 percent so far, year-to-date, compared to a 17 percent increase for the Nifty 50 index.