Chemical Stock: Can Aarti Industries Double Its EBITDA to ₹2,200 Cr by FY28? 

Synopsis: Aarti Industries aims to nearly double its FY28 EBITDA to Rs. 1,800–2,200 cr, driven by cost optimisation, volume and margin ramp-up, and capex-led growth across its Gujarat and Maharashtra chemical facilities. 

The shares of the company are in manufacturing organic and inorganic chemicals at its major facilities in Vapi, Jhagadia, Dahej, and Kutch, Gujarat and in Tarapur in Maharashtra are in the spotlight after it aims to nearly double EBITDA to Rs. 1,800–2,200 crore by FY28. 

With a market capitalisation of Rs. 14,957 cr, the shares of Aarti Industries Ltd closed at Rs. 412.50 per share, down from its previous close of Rs. 432.85 per share. The stock gained 4% over the past year, rose 10% year to date, increased 5% over the last six months, but declined 9% in the past month. 

Outlook 

Aarti Industries continues to maintain a consistent growth outlook, reaffirming its earlier guidance with clear financial targets and a well-defined roadmap for the next three years.

The company’s EBITDA journey over recent years reflects a period of consolidation rather than decline. After reporting Rs. 1,089 cr in FY23, EBITDA moderated to Rs. 984 cr in FY24 and recovered to Rs. 1,016 cr in FY25. For the first nine months of FY26, the company has already clocked Rs. 830 cr, keeping it on track for a meaningful step-up in the near term.

The big picture lies in FY28. Aarti Industries has set an ambitious target EBITDA range of Rs. 1,800–2,200 cr by FY28, nearly double its current levels. The company attributes this expected leap to consistent volume growth driven by capacity expansions already underway, as well as operating leverage and cost optimisation initiatives that are expected to push EBITDA growth well beyond what volume alone can deliver.

To fuel this expansion, Aarti has earmarked a capital expenditure of approximately Rs. 1,100 cr for FY26, underscoring its commitment to building out infrastructure that supports long-term growth rather than chasing short-term gains.

The company has set a target of a Debt/EBITDA ratio of below 2.5x and a Return on Capital Employed of over 15%, signaling that scale and balance sheet discipline will go hand in hand for its next phase of growth.

Growth Drivers

Aarti Industries has laid out three distinct but complementary pillars that are expected to drive EBITDA growth between FY26 and FY28, with a combined potential impact running into hundreds of crores.

Cost Optimisation

The first is Cost Optimisation, which the company estimates can contribute Rs. 150–200 crore to EBITDA. This is perhaps the most execution-ready of the three, with several initiatives already completed.

The company has switched to Back Pressure Turbines to improve cogeneration efficiency, worked on waste energy stream utilisation and ETP cost optimisation, driven fixed cost reductions, and improved yields across its operations. Initiatives around Renewable Power Phase 2 and Digital and Advanced Analytics-led cost excellence are also in the pipeline, further strengthening the cost efficiency story.

Volume and Margin Ramp-Up

The second and largest is Volume and Margin Ramp-up, expected to contribute Rs. 350–550 crore, the biggest single driver of EBITDA growth. This covers the ramp-up of the Acid, DCB, and NCB value chains, Ethylation and NT volume expansion with downstream integration for select Ethylation products, MMA capacity and volume ramp-up, and the scaling of Fluorination and Speciality Chemicals. Several of these are partially completed, meaning the financial benefit is already beginning to flow through, with more to come as utilisation levels rise.

Capex-Led Growth 

The third is Capex-led Growth, projected to add Rs. 300–450 crore to EBITDA. This is the most forward-looking of the three, with execution currently in progress. It includes the commissioning and ramp-up of a pilot plant to fuel new product development, the MPP unit, Zone 4, and the SCL joint venture all of which represent fresh capacity that will underpin Aarti’s next leg of growth once fully operational.

Together, these three are a credible and structured path toward the company’s FY28 EBITDA target of Rs. 1,800–2,200 crore, with a healthy mix of near-term cost wins, volume-driven margin expansion, and longer-term capacity additions.

Aarti Industries Ltd is a leading Indian specialty chemicals company that manufactures a wide range of specialty chemicals and pharmaceutical intermediates used in industries such as agrochemicals, polymers, pigments, dyes, and pharmaceuticals. 

It offers a diverse portfolio of 100+ products and serves 1,100+ domestic and global customers across 60 export countries. The company operates 16 manufacturing plants, including 11 zero liquid discharge facilities, demonstrating its focus on sustainable operations. 

It also runs 5 cogeneration power plants to support its energy needs. Aarti Industries strengthens its innovation capabilities through 2 state-of-the-art R&D centers and is supported by a workforce of over 6,000 employees.

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