Chemical Sector Earnings Preview

We expect Aarti Industries to post muted revenue growth of 2.1% on YoY basis, mainly due to weak demand scenario globally, decline in realization (in tandem with softening of raw material price) and revenue exclusion of HPC segment on account of demerger. The company’s EBIDTA margin expects to show marginal improvement at 20.1% from 19.6% in Q4FY19 on the back of favourable product mix (demerger of the loss making HPC segment). The net profit is likely to grow by15.5% at INR 1438mn from INR 1245mn.