Aarti Industries’ contract with Global Agrochemicals Company, know what is its meaning?

Aarti Industries has recently entered into a long-term contract with a global agrochemicals company. It is expected to generate revenue of up to Rs 3000 crore from this contract. This long-term contract of 9 years is going to start from this financial year itself. The company said that they are not going to spend any capital for this, because its existing plans are sufficient for manufacturing.

With the base margin earned so far and annual capacity of Rs 333 crore, the estimated growth in EBITDA will be close to Rs 73 crore. According to industry sources, this contract is with Indian listed company United Phosphorus, which is for the intermediate of herbicide S-metolachlor. But a problem may arise here, because the European Union has decided not to renew the approval for S-metolachlor, which may lead to diversion of volumes from the European Union to other countries.

possibility of pressure

Financial services company Equirus says this is likely to put pressure on prices and volume of advanced intermediates, which Aarti Industries is going to manufacture. He also says that due to this, Aarti’s long-term contract for intermediate supply is also in danger. Another company that may be affected by this is UPL.