Aarti Surfactant (AARTISURF)
TurnaroundFairStock Score: 50/100 — MIXED
Score breakdown: P/E: 2/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹658.55 |
| Market Cap | ₹557.85 Cr |
| P/E Ratio | 30.31 |
| ROCE | 8.5% |
| ROE | 8.17% |
| Dividend Yield | 0.15% |
| Profit Growth | 196.84% |
| Debt/Equity | 0.43 |
| Sales Growth | 26.44% |
| Promoter Holding | 49.88% |
| 52-Week Range | ₹316 — ₹680 |
| Sector | Chemicals & Petrochemicals |
| Book Value | ₹289.66 |
Strengths
- 37.65% sales growth demonstrates strong demand traction
- Debt/equity of 0.50 keeps financial leverage modest
- Piotroski F-score 7/9 indicates solid balance sheet and operational health
- Promoter holding of 49.88% ensures aligned incentives
- PEG ratio of 0.10 signals potential undervaluation if growth persists
Concerns
- Latest quarter net profit margin under 2% (₹4 crore profit on ₹208 crore sales)
- ROE of 8.17% and ROCE of 8.50% reflect mediocre capital efficiency
- 357% profit growth is likely a low-base effect and not repeatable
- Stock trades near 52-week low (₹398 vs ₹676.60 high), with a negligible 0.25% dividend yield
AI Analysis
When I study Aarti Surfactant, I see a small-cap specialty chemical company that looks cheap on the surface but demands caution. It trades at ₹398.55, near its 52-week low of ₹316, with a market capitalization of just ₹343 crore. The P/E of 19.17 seems reasonable, and the PEG ratio of 0.10 suggests the market is underpricing growth. But that 357% profit growth is a red flag—it is likely a base effect from a weak prior year. In the latest quarter, Aarti generated ₹208 crore in sales yet only ₹4 crore in net profit, a margin below 2%. That is not a high-quality earnings engine. Return on equity stands at 8.17%, and ROCE at 8.50%—both below what I would demand from a business with a durable moat. Book value is ₹262.81, so the price-to-book of 1.52 is not excessive, but you are paying a premium for subpar capital efficiency. Debt-to-equity of 0.50 is manageable, and the Piotroski F-score of 7 suggests decent financial health. Sales growth of 27.65% is encouraging, but I worry about translation into profits. Promoter holding at 49.88% is a positive, aligning interests with minority holders. The dividend yield of 0.25% is negligible. This looks more like a turnaround or cyclical play than a stalwart. Without sustained margin expansion and a higher return on equity, I would hesitate to commit capital. As Graham said, price is what you pay, value is what you get—and here, value is yet to be proven.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer