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Domestic brokerage firm HDFC Securities has retained its 'Buy' rating on specialty chemical manufacturer Aether Industries, with a target price of 1,121, implying a 24 per cent upside potential from its current levels.

"We retain our BUY rating on Aether...on the back of capacity expansion-led growth, advanced R&D capabilities, technocratic management, market leading position in most of its products, strong product pipeline, and marquee customer base," the note said.

Aether Industries has entered into a pact with Saudi Aramco Technologies Company to manufacture and commercialise the converge polyols technology and product line.

Aether Industries has inked a letter of intent (LoI) with Saudi Aramco Technologies to this effect, according to a statement.

The brokerage believes this engagement will lead to building up the required infrastructure by Aether, engagements with its customers, getting approvals and commercial production of the product in the subsequent years.

With the addition of this contract with Saudi Aramco, Aether will increase its wallet share with the company.

HDFC Securities said that Aether has the capabilities and expertise to retain its existing clients, increase their wallet share, and at the same time, bag new customers. With the tripling of its R&D infrastructure and capacity addition, Aether is well-positioned to get into many more such contracts.

Saudi Aramco Technologies and Aether had previously developed and validated this manufacturing process on a pre-commercial scale,

Aether Industries aims to generate revenue of 150-200 crore from this agreement.

During the last few years, Aether has been working with Aramco on the CRAMS (Contract Research and Manufacturing Services) business model.

Aether will take the same products from the CRAMS business model and commercialise and manufacture them under the Exclusive or Contract Manufacturing business model, the company added.

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.

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Updated: 30 Mar 2023, 04:27 PM IST
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