Aether Industries Ltd Share Price – NSE /  BSE

Chemicals, Small Cap

Profit before exceptional items and tax jumped 112.26% year on year (YoY) to Rs 64.08 crore in the quarter ended 31 December 2024. The company reported exceptional loss of Rs 2.69 crore in Q3 FY25.

EBITDA grew 109.12% YoY to Rs 75.7 crore in the third quarter of FY25 as compared to with Rs 36.2 crore recorded in same quarter last year.

EBITDA margin improved to 32% in Q3 FY25 from 22% posted in Q3 FY24. PAT margin increased to 19% in third quarter of FY25 compared to 10% posted in same quarter last year.

In Q2 FY25, the company’s business segments are distributed in many segments are like 48.5% of its revenue comes from the pharmaceutical sector, while 22.8% is derived from the agro sector, material science accounts for 7.7%, coatings contribute 4.2%, oil & gas segment contribute 4.1%, high performance photography segment makes up 2.8% and the remaining 0.8% and 0.4% came from food additives & sustainability & renewables, respectively.

On nine-month basis, the company’s consolidated net profit increased 28.84% to Rs 108.12 crore on 24.52% rise in revenue from operations to Rs 598.49 crore in 9M FY25 over 9M FY24.

Aether Industries is engaged in the business of specialty chemicals and intermediates. The products of the company find application in various sectors like pharmaceuticals, agrochemicals, specialty, electronic chemicals, material sciences and high performance photography etc.

The scrip declined 0.40% to Rs 851.30 on the BSE.

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Net profit of Aether Industries rose 148.94% to Rs 43.39 crore in the quarter ended December 2024 as against Rs 17.43 crore during the previous quarter ended December 2023. Sales rose 41.40% to Rs 219.68 crore in the quarter ended December 2024 as against Rs 155.36 crore during the previous quarter ended December 2023.

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Aether Industries (Aether) has executed an amendment to the strategic supply agreement with Baker Hughes on 7 January 2025, under the broader umbrella of the strategic supply agreement signed between the two parties on 25 June 2024.

The current amendment finalizes the volume and pricing details for the first two products to be supplied by Aether to Baker Hughes.

Both products will be exclusively manufactured for Baker Hughes by Aether's 100% wholly owned subsidiary, Aether Specialty Chemicals. The subsidiary is fully equipped with the requisite assets, plant, and machinery, which have already been commissioned to support this contract manufacturing initiative.

The current amendment thus initiates the commercialization activities of Aether's Site 4, exclusively built under Aether Specialty Chemicals.

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The agency has also affirmed the company’s short-term rating at '[ICRA] A1’.

ICRA stated that the reaffirmation of the ratings of Aether Industries (AIL) favourably factors in its track record in the speciality chemicals business, the experience of its promoters, its strong R&D capabilities, a well-spread out product mix and a diversified customer base comprising reputed companies in the domestic and export markets.

The ratings also factor in the consistent revenue growth posted by the company along with a healthy margin profile, with the operating marginremaining in the range of 22-29% over the last few years owing to its well-differentiated product portfolio.

ICRA also notes that AIL is a market leader in some of the products it deals in. Moreover, the company has raised sizeable equity in the last two years to fund its growth and capex requirements.

This equity raise has also enabled the company to retire its debt, translating into strong capital structure and debt protection metrics.However, over the last few months, the working capital requirements are being met by availing working capital borrowings.

The company is also planning another QIP that will help it fund its future capex requirements as well as meet the regulatory requirements regarding promoter shareholding.

The company plans to add new products and expand the capacities of the existing product base, which is likely to provide a thrust to the operating income as well as profit generation and keep the credit profile comfortable. ICRA also notes the new tie-ups announced by the company with reputed counterparties for a few products, which will ensure a healthy top line growth, going forward.

While the company’s performance is susceptible to volatility in raw material prices and foreign exchange rates, its ability to pass on the input cost fluctuations to some extent mitigates the risk. The company also remains exposed to foreign currency exchange fluctuations as well as changes in the regulatory environment.

Moreover, the ratings remain constrained by the elevated working capital intensity of operations because of the high inventory and receivable levels, which in a high-growth scenario, results in a blockage of sizeable capital for the company. While the working capital intensity has moderated in the current fiscal, it remains to be seen whether this trend can be sustained.

Aether Industries is a specialty chemical manufacturer in India focused on producing advanced intermediates and specialty chemicals involving complex and differentiated chemistry and technological core competencies.

The scrip was up 0.04% to currently trade at Rs 826.35 on the BSE.

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