Aarti Surfactants Limited

 

CMP = 639

Aarti Surfactants Limited  was listed in 2020 as a result of the demerger of the home and personal care division of Aarti Industries Limited. The company is a renowned manufacturer of innovative and high-quality specialty surfactants.

The company produces ionic and non- ionic surfactants and specialty products find application in consumer-centric personal care and home care products, skin care, oral care, hair care, cosmetics, toiletries and detergent products and for industrial application. Its product portfolio includes surfactants, mild surfactants, rheology modifiers, preservatives, pearlizing agents, UV filters, soap bases, active ingredients and conditioning agent blends. 

The company has two state-of-art manufacturing plants located at Pithampur in Madhya Pradesh and Silvassa in Dadra Nagar Haveli.

Investment Rationale

Aarti Surfactants has well established market position with reputed client base  comprising of leading multinational companies in the FMCG sector. Aarti Surfactants is a preferred supplier to Hindustan Unilever, Proctor & Gamble, Patanjali and Dabur as well as other reputed global brands in India.

Aarti Surfactants has significantly expanded and diversified its product portfolio, client base and geographical footprint. Its product portfolio comprises over 20 product grades, which are marketed to customers in over 13 countries, including India, USA, South America, South East Asia and Europe. The company has planed to increase its export share to ~35% by FY26 which is likely to further boost its profit margins.

Since inception, company is gradually expanding its production capabilities. With recent completion of capacity enhancement of Pithampur (Madhya Pradesh) plant, the company is in a position to meet this increasing demand. The total capacity of the company is enhanced  to 1,32,600 MT per annum with capital expenditure of around Rs. 100 crores in last few years.

Further, company is set to expand its production capabilities with the establishment of a new cutting-edge sulfonated products manufacturing unit in Pithampur, Madhya Pradesh. This strategic move is expected to substantially boost Aarti Surfactants production capacity to total 175,000 MT/year. 

The company created a distinctive identity for itself in global markets backed by diversified product portfolio customised as per client needs. Aarti Surfactants offers a wide range of innovative, customisation, eco-friendly and high‐quality products to its customers. It is well poised to capitalise emerging opportunities in key customer industries by leveraging its manufacturing capacities, wide product portfolio, and strong R&D capabilities. Its reputation as a reliable supplier of consistent quality surfactants at competitive prices would assist greatly in exploiting opportunities emerging in domestic as well as overseas markets. 

The growing emphasis on personal hygiene and grooming, coupled with increasing disposable incomes, has unlocked enormous opportunities for specialty surfactant manufacturers. Consumers are increasingly becoming conscious of their appearance and well-being, leading to a surge in demand for high-quality home and personal care products that deliver effective and desirable results.

The company product portfolio finds application in diverse segments of home and personal care industry which is ever-green and ever-growing. Demand of  skin care, oral care, hair care, cosmetics, bath and shower, sun care, fabric / laundry care dish washing, surface care products will continue to grow with increasing population and growing disposable income.

Its manufacturing units  has logistical advantages on account of its proximity to major ports and FMCG companies in India. The manufacturing units are equipped with cutting-edge machinery and technologies and house a robust R&D facility. The qualified and experienced in-house R&D team focusses on the development of high-performance products and formulations for the consumer-centric home and personal care industries

The company is maintaining strong relationship with large MNCs in the FMCG sector. It helped in expanding its customer base in domestic as well as export market in past few years.

Aarti Surfactants continue to benefit from rich experience of their promoters in chemical / pharma sector through the Aarti Group.  Aarti Industries was incorporated in 1984 and is a leading Indian manufacturer of speciality chemicals and pharmaceuticals with a global footprint. 

Conclusion

The home and personal & home care industry is significant contributor to the growth of the surfactants market. Surfactants find extensive use in various products including detergents, soaps, shampoos, conditioners and cosmetics. Several factors like rapid urbanisation, growing middle-class population, improved living standards and rising demand from end-use industries will lead the growth in home and personal care segment.

Aarti Surfactants has built a solid reputation in the market owing to its unwavering commitment to superior manufacturing capabilities, stringent quality control, and a customer-centric approach.

Aarti Surfactants Ltd stock at cmp Rs 639 is excellent investment opportunity for both short term and long term. It can be bought within 20% from cmp with 20 %  allocation.