Aarti Drugs is trending today on August 17; here’s why

The stock is up more than 11% in today’s session.

The fall in the crude price has injected positive market sentiments. For the fourth consecutive trading session, the Indian equity market is trading in green. On August 17, at 11:14 S&P BSE Sensex is trading at 60205 with 0.61% gain.

About sectoral performance, Utilities and Power are the top gainers, while IT remains the top loser for the day. Talking about stock-specific action, Aarti Drugs is in the news and is trading at Rs 471.9, 11.44% higher from its previous close.

The shares of Aarti Drugs are rallying due to news regarding imposing anti-dumping duty on Chinese pharma companies to sell Ofloxacin and other intermediates in the Indian market. Aarti Drugs had communicated their concerns to DGTR (Directorate General of Trade Remedies) regarding Chinese pharma dumping excess quantities of Ofloxacin and other intermediates in the Indian market which in turn would cause losses to domestic pharma players.

Upon receiving concerns from Aarti Drugs, DGTR had run a survey from April 1, 2020, to March 31, 2021, where they found out that the imports of these products increased 72 times within the same year. Hence, DGTR had presented a proposal to impose anti-dumping duty on Ofloxacin and other related intermediates coming out of China to the Indian market to protect the interest of domestic pharma companies.

The proposal also includes a plan to impose an anti-dumping duty for the next 5-years with a price range for these pharma raw materials fixed at USD 0.5 - USD 7, depending on the types & grade of the material.

Aarti Drugs Ltd is involved in the manufacturing and selling of Active Pharmaceutical Ingredients, Pharma Intermediates, Specialty Chemicals, and Formulations. It exports its products to more than 100 countries globally. As per the FY22 period ending, 37% of the revenue is contributed by the export business.

The company has an ROE and ROCE of 21.3% and 20.7%, respectively. The stock is trading at a TTM PE of 20.3x.