Aarti Industries is volatile today, reflecting the market mood. Despite a good show for Q4FY22, the stock went down 5.5% to an intraday low at Rs.768.40 while volumes were up almost 2x. Its 52-week low stands at Rs.717.80.

The company ended Q4Fy22, with a 39% (YoY) rise in PAT at Rs.194 crore on a 50% rise in revenue at Rs.2018 crore.

EBITDA was up 30% at Rs339 crore. Margin fell from 19.3% to 16.8%.

Revenue growth could have been higher, but for the supply shortage of key raw material – Nitric Acid during the quarter, which impacted production of various products under the Speciality chemicals segment. The company is in talks with the supplier and taking efforts to minimise this impact.

The market gave these numbers a thumbs down because in the investor presentation, the company guided a 1.7x to 2x rise in FY21 turnover; EBIT and PAT, both rising 1.7x to 2x over FY21.  This, the market is seeing as FY23 a year of consolidation.

The company had entered into a 10-year contract with Bayer AG but it was terminated in June’20. The compensatory receipts from Bayer stopped since Dec’21 and this too could impact the earnings in current fiscal.