Aarti Drugs (524348) Q1 26/27 earnings summary

Executive summary

• Q1 FY27 saw strong operational and financial performance, with volume growth and improved realizations across API and Specialty Chemicals portfolios, supported by disciplined execution and operational efficiencies.

• Consolidated total income for Q1 FY27 was ₹70,359 lakhs, up from ₹59,082 lakhs in Q1 FY26, reflecting strong year-over-year growth.

• Investments in manufacturing, backward integration, and disciplined procurement supported resilience and growth.

• Sayakha facility ramped up to 65% utilization, contributing to backward integration and margin improvement.

• Demand remained robust across APIs, specialty chemicals, and formulations, with exports and domestic markets both contributing.

Financial highlights

• Q1 FY27 total revenue rose 19% year-over-year to Rs. 703.6 crore; EBITDA increased 30% to Rs. 96.9 crore, with margin expanding 120 bps to 13.8%.

• Profit before tax for Q1 FY27 was Rs. 69.2 crore, up 35% year-on-year; PAT declined 7% to Rs. 50.1 crore due to a lower tax refund.

• Standalone revenue grew 20% year-on-year to Rs. 627.6 crore; domestic revenue up 25%, exports up 12%.

• Formulation segment revenue increased 8% year-on-year to Rs. 81.6 crore, with 74% from exports.

• Basic and diluted EPS (consolidated) for Q1 FY27 stood at Rs. 5.49.

Outlook and guidance

• Volume growth is expected to improve in coming quarters as pricing stabilizes and demand returns.

• 10%-15% volume growth targeted over the next two years, supported by new capacities and product launches.

• EBITDA margin of 14% is achievable, with potential to reach 15% as utilization and backward integration improve.

• Demand outlook remains encouraging, with regulatory approvals (USFDA, UK) supporting expansion in regulated markets.

• Continued investments in process optimization, capacity enhancement, and backward integration.