Stocks To Buy: Motilal Oswal expects this chemical stock to double in its 'bull case' scenario

Résumé détaillé

Aarti Industries' revenue to grow at a Compounded Annual Growth Rate (CAGR) of 16%, EBITDA CAGR of 23% and Profit After Tax (PAT) CAGR of 35% over financial year 2026-2029, driven by fuel additive growth, higher utilization and the Zone IV ramp up. It values the stock at 30 times its FY28 estimated earnings per share (EPS), as per Motilal Oswal.

Shares of Aarti Industries Ltd. gained 5% on Wednesday, November 11, after brokerage firm Motilal Oswal initiated coverage on the stock, projecting an upside of 31% in its base case scenario.

Motilal Oswal initiated coverage on Aarti Industries with a "buy" rating and a target price of ₹600 per share.

Aarti Industries is an integrated specialty-chemical intermediate manufacturer catering to energy, agrochemicals, pharmaceuticals, dyes and pigments, printing inks and polymers. Its capabilities span nitration, chlorination, hydrogenation and ethylation processes.

Motilal Oswal said Aarti Industries expanded its energy capacity segment capacity by 24% to 360 KTPA in July 2026, creating headroom for deeper penetration across the US, Europe and Africa. Also, three to five products under development could broaden the portfolio beyond MMA and support the energy segment's growth, it said.

Motilal Oswal highlighted three key drivers that are expected to drive growth across Aarti Industries' core chemistry platforms:

Motilal Oswal said ₹180 crore for Zone IV (multi-purpose plant) provides the next leg of growth through phased product launches. Its flexible chemistry platform can support 35 to 40 products, with launches planned to reach five to 10 in FY27 and 24-30 by FY28. Motilal Oswal estimates the Zone IV EBITDA to come in at ₹150 crore in FY28 and ₹290 crore in FY29, with full potential expected by FY30.

The brokerage expects Aarti Industries' revenue to grow at a Compounded Annual Growth Rate (CAGR) of 16%, EBITDA CAGR of 23% and Profit After Tax (PAT) CAGR of 35% over financial year 2026-2029, driven by fuel additive growth, higher utilization and the Zone IV ramp up. It values the stock at 30 times its FY28 estimated earnings per share (EPS).

The brokerage has ascribed a target of ₹950 for Aarti Industries as part of its "bull case" scenario, which implies an upside potential of 106% from current levels.

That target could be achieved by assigning a 10-year average…

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