Rs 30,00,00,00,000 revenue potential: This multibagger chemicals company enters into a long-term supply contract with a Global Agrochem; scrip hit 52-week high!

The shares of the company saw a spurt in volume by more than 5.51 times on BSE.

Aarti Industries Limited (AIL), a leading global speciality chemicals company, today announced that it has entered into a 9-year long-term supply contract for the supply of a niche agrochemical intermediate with a global agrochemical products and solutions company. This agrochemical intermediate serves as a crucial input component for a widely used herbicide applied in diverse food and cash crops (such as corn, soybean, cotton, sugarcane, sunflower, etc). The global market for this herbicide is large and steadily growing.

AIL secures a landmark 9-year contract exceeding Rs 3,000 crore, solidifying its position as a leader in a key agrochemical intermediate. This lucrative deal seamlessly integrates with AIL's existing portfolio, leveraging its current manufacturing prowess. Remarkably, existing capacity suffices for contract fulfilment, eliminating the need for additional capital expenditure and fuelling significant revenue growth over the next nine years.

Fueled by a steady CAGR in the mid-to-high single digits, the USD 74 billion global agrochemical market is increasingly turning east for its sourcing needs. Cost efficiencies, global scale, and energy challenges in developed economies have driven this "easternization," making China and India prime destinations for intermediate manufacturing. However, frequent disruptions in Chinese production due to government policies have spurred innovators to diversify, opening doors for India's emergence as a net exporter. With its own robust 9 per cent CAGR growth projected to reach USD 7.4 billion by 2026, India is poised to capitalize on this trend, solidifying its position as a key player in the global agrochemical landscape.

Today, shares of Aarti Industries surged 2.58 per cent to an intraday high & 52-week high of Rs 649.50 per share from its previous closing of Rs 633.15. At the closing bell, shares of the company were trading at Rs 645.75 per share, up 2 per cent with a spurt in volume by more than 5.51 times on BSE. The company has a market cap of over Rs 23,000 crore.

The stock is up by 50 per cent from its 52-week low of Rs 438 per share and gave multibagger returns of 2,750 per cent in a decade. Investors should keep an eye on this Mid-Cap chemicals stock.

Disclaimer: The article is for informational purposes only and not investment advice. 

1 comments on article "Rs 30,00,00,00,000 revenue potential: This multibagger chemicals company enters into a long-term supply contract with a Global Agrochem; scrip hit 52-week high!"

Shubham Mishra

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12/28/2023 1:21 AM

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