Brokerage firm Kotak Institutional Equities has released a note on the specialty chemicals sector, maintaining a ‘Neutral’ stance on the space. It has also trimmed its price target on Aether Industries to ₹890, down from ₹910 earlier.
Kotak said that it would look for consistent earnings delivery versus already-high expectations before adopting a more constructive view on the stock.
The broking firm mentioned that Aether’s recently announced 10-year contract with Milliken marks a significant step forward in its contract manufacturing business — considered the company’s key growth driver.
While the exact contract details remain undisclosed, Kotak believes the product involved likely falls under the ‘material science’ segment, pointing to Milliken’s portfolio of clarifiers and polymer additives.
Aether has had a longstanding partnership with Milliken under the CRAMS vertical, and the transition of this product into a full-scale contract manufacturing model is seen as a notable milestone.
Kotak has factored in revenue from the Milliken deal in its forecasts, though this has been partially offset by a more gradual ramp-up assumption for the Converge polyols and Baker Hughes contracts.
As a result, while the FY2026 and FY2027 earnings estimates remain largely unchanged, there is a 6% upward revision to FY2028E EPS. Kotak continues to project a doubling of EPS between FY2025-28.
However, the brokerage said that while valuations have corrected in recent months, the stock is still not inexpensive, trading at 46x/36x FY2026E/27E P/E.
