Key Events This Week
2 Feb: Q3 FY26 results reveal strong rebound despite margin concerns
3 Feb: Stock hits intraday high of Rs.443.90 with 13.55% surge
4 Feb: Continued price gains and technical momentum build
5 Feb: Mojo rating upgraded to Hold on improved metrics
6 Feb: Slight profit-taking closes week at Rs.440.90 (-2.77% day)
2 February: Strong Q3 Results Set Positive Tone
Aarti Industries commenced the week on a positive note, closing at Rs.373.15, up 0.40% despite the Sensex declining 1.03% to 35,814.09. The company reported robust Q3 FY26 results, with net sales reaching ₹2,318 crore and PBDIT hitting a record ₹321 crore. Net profit after tax rose to ₹148 crore, with earnings per share at ₹3.67. These figures masked ongoing margin concerns but demonstrated a strong rebound in operational performance, providing a foundation for the week’s rally.
3 February: Gap Up and Intraday High Signal Strong Momentum
The stock opened with a significant gap up of 17.93%, reflecting positive market sentiment and investor enthusiasm following the quarterly results. It surged intraday to a high of Rs.443.90, an 18.96% increase from the previous close, before settling at Rs.429.50, up 15.10% on the day. This performance vastly outpaced the specialty chemicals sector’s 3.46% gain and the Sensex’s 2.63% rise, underscoring Aarti Industries’ relative strength. The stock traded above all key moving averages, signalling robust technical support.
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4 February: Continued Gains Amid Sector Strength
The stock extended its gains to close at Rs.442.90, up 3.12%, while the Sensex rose 0.37% to 36,890.21. Trading volume moderated to 228,922 shares, but the price remained above all major moving averages, reinforcing the bullish technical stance. The specialty chemicals sector maintained positive momentum, supporting the stock’s advance. This day’s performance consolidated the strong rally initiated on 3 February, signalling sustained investor interest.
5 February: Upgrade to Hold Reflects Improved Fundamentals and Technicals
MarketsMOJO upgraded Aarti Industries’ rating from Sell to Hold on 4 February, citing improved financial metrics and technical momentum. The company’s financial grade improved markedly, driven by record quarterly sales and profits, with net sales at ₹2,318 crore and PBDIT at ₹321 crore. Despite rising interest expenses and modest ROCE of 5.68%, the upgrade reflects a more balanced outlook. The stock closed at Rs.453.45, up 2.38%, with technical indicators such as MACD and KST turning mildly bullish, while on-balance volume suggested accumulation.
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6 February: Profit-Taking Ends Week Slightly Lower
The stock retreated 2.77% to close at Rs.440.90 on relatively low volume of 55,012 shares, while the Sensex inched up 0.10% to 36,730.20. This modest pullback followed a strong four-day rally and may reflect short-term profit-taking. Despite the dip, the weekly gain of 18.63% remains impressive, highlighting the stock’s outperformance relative to the Sensex’s 1.51% rise. The technical momentum remains cautiously positive, with key moving averages still supportive.
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-02-02 | Rs.373.15 | +0.40% | 35,814.09 | -1.03% |
| 2026-02-03 | Rs.429.50 | +15.10% | 36,755.96 | +2.63% |
| 2026-02-04 | Rs.442.90 | +3.12% | 36,890.21 | +0.37% |
| 2026-02-05 | Rs.453.45 | +2.38% | 36,695.11 | -0.53% |
| 2026-02-06 | Rs.440.90 | -2.77% | 36,730.20 | +0.10% |
Key Takeaways
Strong Earnings Performance: The record quarterly sales and profits provided a solid fundamental base for the stock’s rally, despite margin pressures and rising interest costs.
Robust Price Momentum: The significant gap up and intraday highs on 3 February demonstrated strong investor demand and technical strength, with the stock outperforming both its sector and the Sensex.
Technical Momentum Shift: The upgrade to Hold was supported by improved technical indicators, including mildly bullish MACD, KST, and on-balance volume, signalling potential for sustained momentum.
Volatility and Profit-Taking: The stock’s high beta nature was evident in the sharp moves and the slight pullback on the final day, reflecting short-term profit-taking amid a volatile market environment.
Long-Term Caution: Despite short-term gains, the company’s long-term returns lag the Sensex, and valuation metrics such as a high PEG ratio and modest ROCE suggest cautious optimism is warranted.
Conclusion
Aarti Industries Ltd. demonstrated a compelling weekly performance, gaining 18.63% and significantly outpacing the Sensex’s 1.51% rise. The rally was anchored by strong quarterly results, a notable gap up and intraday highs, and an upgrade to a Hold rating reflecting improved fundamentals and technical momentum. While the stock’s high beta profile contributed to volatility and a slight pullback on the final day, the overall trend remains positive in the near term. Investors should balance the encouraging short-term signals against the company’s longer-term challenges and valuation considerations. Monitoring upcoming quarterly updates and sector developments will be crucial to assess whether this momentum can be sustained.
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