Aarti Surfactants Ltd. (AARTISURF) AI Stock Analysis

• Market Cap: ₹2.94B
• Dividend Yield: 0.25%
• Average Volume (3M): 774.00
• Price to Earnings (P/E): 22.4
• Beta (1Y): 1.55
• Revenue Growth: 28.46%
• EPS Growth: -2.09%
• Country: IN
• Employees: 334
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 4.32
• Shares Outstanding: 8,464,995
• 10 Day Avg. Volume: 430
• 30 Day Avg. Volume: 774
• PEG Ratio: -0.69
• Price to Book (P/B): 1.52
• Price to Sales (P/S): 0.54
• P/FCF Ratio: -38.87
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: ₹374.00 ▼(-3.56% Downside)
• Action: Reiterated Date: 03/10/26
• Date: Action: Reiterated 03/10/26

The score is primarily supported by solid financial performance (revenue growth and margin improvement), but is held back by a clear bearish technical setup (price below key moving averages with negative MACD) and only moderate valuation support (P/E 22.44 with a low dividend yield).

Positive Factors

Revenue Growth & Margin Improvement

Aarti Surfactants reported roughly 12.5% revenue growth and improving EBIT/EBITDA margins, indicating expanding sales and operational leverage. Given its role supplying surfactant chemistries to home, personal care and industrial formulators, sustained demand for these inputs supports multi-quarter revenue momentum and margin scalability as fixed costs are absorbed.

Stable Balance Sheet & Rising Equity

The balance sheet shows a stable debt-to-equity profile and rising shareholder equity, reflecting capital accumulation and retained earnings. A sound capital base and moderate ROE improve the company’s ability to fund incremental working capital and capex internally, supporting operational continuity and access to credit on reasonable terms over the medium term.

Positive Operating Cash Flow & Cash Conversion

Consistently positive operating cash flow and an operating cash flow to net income ratio above 0.75 signal quality earnings and strong cash conversion. This durability in operational cash generation underpins working capital needs and can fund portions of growth capex or reduce reliance on external short-term financing across multiple quarters.

Negative Factors

Low Net Profit Margin

A net profit margin near 2.2% leaves a thin cushion against raw material cost swings and competitive pricing pressure common in specialty/commodity chemical supply chains. Persistently low net margins constrain retained earnings, limit reinvestment capacity, and reduce flexibility to pursue margin-accretive initiatives or absorb cyclical downturns without external funding.

Consistently High Liabilities / Leverage Risk

Although debt-to-equity is described as stable, consistently high total liabilities elevate leverage and refinancing sensitivity. High liability levels increase interest exposure and limit financial flexibility, making the company more vulnerable to rising rates or tighter credit conditions and potentially constraining strategic investments or dividend capacity.

Volatile Free Cash Flow from Elevated Capex

A sharp drop in free cash flow driven by elevated capex introduces volatility in liquidity and raises the probability of needing external financing for growth or operations. If higher capex persists, it could pressure cash reserves, increase leverage, and delay free cash flow recovery, limiting capacity for buybacks, dividends, or debt reduction over several quarters.

Aarti Surfactants Ltd. Business Overview & Revenue Model

Company Description

Aarti Surfactants Limited, together with its subsidiary, Aarti HPC limited, produces and supplies ionic and non-ionic, and specialty surfactants for the home and personal care, agro and oil, and industrial applications in India and internationally. The company's products include surfactants, mild surfactants, rheology modifiers, pearlizing agents, UV filters, preservatives, syndet and soap bases, and active ingredients, as well as conditioning agents, blends, proteins, and quats. It serves skin care, oral, hair, cosmetics, bath and shower, sun care, fabric/laundry care, dishwashing, toilet care, and surface care markets. The company was formerly known as Arti Surfactants Limited. Aarti Surfactants Limited was incorporated in 2018 and is headquartered in Mumbai, India.

How the Company Makes Money

Aarti Surfactants Ltd. makes money primarily by manufacturing and selling surfactants and surfactant-based products to business customers. Revenue is generated through (1) sale of finished surfactants/formulations (the core stream), where the company produces chemical ingredients used in downstream products such as detergents and cleaners; and (2) ongoing supply relationships with formulators and FMCG/industrial customers that purchase these materials as inputs for their own branded or industrial products. Profitability is influenced by sales volumes, product mix (specialty vs. more commoditized surfactants), pricing, and input-cost dynamics (notably petrochemical/oleochemical feedstocks and other raw materials). Specific details on customer concentration, contract structures, segment-wise revenue split, or named partnerships are null.

Aarti Surfactants Ltd. Financial Statement Overview

Summary

Income statement strength (score 80) reflects solid revenue growth (~12.5% from 2024 to 2025) and improving EBIT/EBITDA margins, but profitability remains constrained by a low net profit margin (~2.2%). Balance sheet is stable (score 75) with moderate ROE and rising equity, yet consistently high liabilities elevate leverage risk. Cash flow is the weakest area (score 65) due to a sharp decline and volatility in free cash flow from higher capex despite positive operating cash flow and good cash conversion.

Income Statement

Aarti Surfactants Ltd. has shown a consistent revenue growth with notable improvement in EBIT and EBITDA margins over the years. The revenue growth rate from 2024 to 2025 was approximately 12.5%, indicating a positive trajectory. However, the net profit margin is relatively low at around 2.2% due to high operating expenses impacting net income.

Balance Sheet

The company maintains a stable debt-to-equity ratio, with a slight increase in stockholders' equity over the years. Return on equity is moderate, reflecting the effective use of shareholder investments. However, the total liabilities have been consistently high, suggesting potential leverage risks.

Cash Flow

Operating cash flow has been positive, though there was a significant decrease in free cash flow in 2025 due to higher capital expenditures. The operating cash flow to net income ratio is over 0.75, indicating good cash conversion. However, the volatility in free cash flow growth poses a risk to liquidity.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	7.60B	6.59B	5.90B	5.97B	5.70B	4.63B
Gross Profit	1.35B	1.25B	658.04M	1.27B	794.12M	741.92M
EBITDA	494.19M	419.18M	621.92M	477.40M	324.31M	455.06M
Net Income	150.18M	145.45M	213.27M	127.05M	54.95M	216.34M
Balance Sheet
Total Assets	4.90B	4.77B	4.22B	4.02B	4.02B	3.84B
Cash, Cash Equivalents and Short-Term Investments	2.41M	12.07M	63.15M	76.89M	14.29M	67.32M
Total Debt	1.18B	1.10B	992.09M	1.49B	1.62B	1.52B
Total Liabilities	2.53B	2.45B	2.04B	2.34B	2.67B	2.51B
Stockholders Equity	2.37B	2.33B	2.18B	1.68B	1.36B	1.33B
Cash Flow
Free Cash Flow	-8.16M	-90.98M	356.08M	139.31M	7.76M	-256.61M
Operating Cash Flow	216.41M	111.38M	519.61M	247.84M	233.18M	358.26M
Investing Cash Flow	-239.22M	-161.63M	-162.19M	85.61M	-225.41M	-614.87M
Financing Cash Flow	16.49M	-3.67M	-371.15M	-270.86M	-60.80M	315.88M

Aarti Surfactants Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 387.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:AARTISURF, the sentiment is Negative. The current price of 387.8 is above the 20-day moving average (MA) of 385.82, below the 50-day MA of 398.19, and below the 200-day MA of 465.93, indicating a bearish trend. The MACD of -15.07 indicates Positive momentum. The RSI at 33.41 is Neutral, neither overbought nor oversold. The STOCH value of 27.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:AARTISURF.

Aarti Surfactants Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AARTISURF	63 Neutral	₹2.94B	22.44	―	0.25%	28.46%	-2.09%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
RAMAPHO	57 Neutral	₹4.05B	10.12	―	0.46%	22.68%	―
GENUSPAPER	50 Neutral	₹2.89B	28.86	―	―	23.58%	154.81%
DIAMINESQ	43 Neutral	₹2.24B	-19.09	―	0.38%	―	―
GOACARBON	43 Neutral	₹2.82B	-4.16	―	5.02%	-19.25%	-220.20%

Aarti Surfactants Ltd. Corporate Events

Aarti Surfactants Clears Q3 FY26 Results, Withdraws Promoter Reclassification Move

Aarti Surfactants Limited’s board has approved the unaudited standalone and consolidated financial results for the quarter and nine months ended 31 December 2025, and will publish these numbers in newspapers in line with securities regulations, underscoring ongoing transparency for shareholders and creditors. In the same meeting, the board also acknowledged Valiant Organics Limited’s decision to remain classified as part of Aarti Surfactants’ promoter group and accordingly withdrew the earlier promoter re-classification application, maintaining the existing promoter-shareholding structure and signalling continuity in the company’s ownership profile.

Aarti Surfactants Expands Equity Through Employee Stock Options

Aarti Surfactants Limited has announced the allotment of 6,500 equity shares under its Employee Stock Option Plan 2024, following the exercise of stock options by eligible employees. This move increases the company’s paid-up equity share capital to Rs. 8,46,49,950, reflecting its commitment to employee engagement and retention through stock incentives, potentially strengthening its market position.