Aarti Drugs shares jump 4%
Shares of Aarti Drugs jumped as much as 4% on September 13, partly recouping last two trading sessions’ 6% loss. The stock closed at Rs 599.70, up 2.94% from the previous close.
The rise in the stock price was not supported by any major news or announcement. However, some analysts attributed the move to the company’s strong financial performance in the recent quarters.
Aarti Drugs has been on a tear in the last six months, rising over 88%. The stock has also given 31% returns year-to-date.
The company’s board had approved a share buyback of Rs 59.85 crore in July, which had then sent the stock soaring. The buyback was concluded in August.
Aarti Drugs is engaged in the manufacturing of Active Pharmaceutical Ingredients, pharma intermediates, and specialty chemicals. The company reported a 53% on-year jump in net profit at Rs 40 crore for the April-June quarter. However, revenue grew by only 7% to Rs 592 crore.
Analysts said that the revenue and net profit numbers in Q1FY24 were below their estimates as exports were primarily low in formulations and speciality chemicals segment during the period.
Despite the weak revenue growth, Aarti Drugs’ stock continues to be in demand due to its strong financial performance and the share buyback. The stock is trading at a price-to-earnings ratio of 20.5, which is lower than the average P/E ratio of the sector.
Overall, the outlook for Aarti Drugs remains positive. The company is well-positioned to benefit from the growth in the pharmaceutical industry. The share buyback has also created a positive sentiment among investors.
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Market Update for September 22, 2023
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