Fundamental views :
1. Aarti drugs is the largest manufacturer in the world for metformin under API (active pharmaceutical ingredients) in pharma sector which gives the multifold return to its investor.
2. ROCE and ROE is above 25% from the last 3 years.
3. company has delivered good profit growth rate of 35% CAGR over the last 5 years.
4. debt to equity ratio is 0.50%.
5. sales is consistently increasing year on year.
6. positive cash flow is there from last 5 years.
7. 60.1% is unpledged promoters holding.
8. In order to scale up its API's, related intermediates and formulations it has phase wise capex plans of Rs 600 cr during FY22 & FY23.
9. For FY21, aarti drugs ltd. (ADL's) Revenue mix :- API-79%, Formulations -13%, Speciality chemicals -4%, Intermediates-1% and Others - 3%.
10. ADL's reputed clientele includes MNC's like Sun Pharma, Cipla, Abbott, ALKEM, Zydus Cadilla, Alembic, Torrent Pharma, Pfizer, Lupin.
11. stock PE is 22 where as industry PE is 19. so valuations are little bit high.
Technical views :
1. monthly RSI trading near 50 level.
2. weekly and daily RSI trading below 40 level. so strong is coming into bear hands.
3. weekly and daily true strength indicator is traded below 0 line.
4. in circle area we can see the tight distribution of shares and now it gives breakdown 625 level.
5. on daily chart stock is making lower highs and lower lows according to DOW theory.
6. stock is trading below 8,20,50,200 DMA.
so we can say that the company has strong fundamentals. but technical are not justifying the fundamentals. valuation are high. stock is in downtrend. stock breaks the strong support of 625 level now it can go to the level of 330. if it breaks it may witnessed 200 also in near future. do not hurry to buy this stocks. if it comes to 330 or 200 best level to enter this stock for long term investment purpose.
below 640 the stock remains in bear grip. try not to take positions. according to me it may correct more. so watch this stock till the levels not come.
NOTE : do not in hurry to buy any stocks. it will definitely comes to your price.
DISCLAIMER : this is my personal view only for educational purpose. i may or may not have this stock in my portfolio. please do research your own or consult with your financial advisor before making any position.
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