Aarti Drugs share price rises more than 12%: To consider share buyback proposal on 26 August

Stock Market today: Aarti Drugs Limited share price gained more than 12% in morning trades on Thursday. The company announced that it will considering a share buyback proposal on 26 August.

Buyback news propels the share price

Aarti Drugs share price opened at ₹600.00, 12 per cent higher than the previous close of ₹533.85 on the BSE on Thursday. The Aarti Drugs share price thereby gained further to intraday highs on ₹601.20.

On the NSE Aarti Drugs share price opened at ₹590 with more than 10% gains over the previous close of ₹534. Aarti Drugs share price rose to intraday highs of ₹599 on the NSE too marking gains of more than 12%.

Aarti Drugs on Wednesday post the market hours announced of a board meeting on 26 August 2024.

The release said that “the next Meeting of the Board of Directors of the Company is scheduled to be held on Monday, August 26, 2024 to consider the proposal of buyback of the fully paid-up equity shares of Rs. 10/- each of the Company including matters related/incidental thereto”.

Improving outlook

The Aarti Drugs share price has not gained much over last one year, but has rebounded more than 30% from its March lows. The Aarti Drugs share price also inched closer to 52-week highs of ₹625 seen on the NSE in September'2023.

Though global headwinds for Active ingredient manufacturers kept the lid on investor sentiments, nevertheless the outlook has improved now

In its recently released research note, rating agency ICRA highlighted the encouraging growth prospects of the Indian active pharmaceutical ingredients (API) industry. ICRA expects the revenues of its sample set of companies to expand at a CAGR (compound annual growth rate of 7-8% between CY2023 and CY2029 from an estimated size of $ 13-14 billion in CY2023.

Commenting on the industry performance, Deepak Jotwani, Vice President & Sector Head – Corporate Ratings, ICRA said: “Given the subsequent remission in many of these headwinds, ICRA expects revenues of its sample set of companies to grow by 7-8% in FY2025, post an estimated increase of 3-5% in FY2024. Given the lower input costs, along with growth in revenues, ICRA expects the earnings improvement recorded in FY2024 to sustain in FY2025 and the OPM to enhance to 12-14% from 11-13% in the previous fiscal".

ICRA’s sample set of companies includes Aarti Drugs Limited, Anuh Pharma Limited, Covalent Laboratories Private Limited, Everest Organics Limited, Hikal Limited, NGL Fine Chem Limited, Satya Deeptha Laboratories Private Limited, Sri Krishna Pharmaceutical Limited, Supriya Lifescience Limited, Virchow Petrochemicals Private Limited

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions