Aarti Drugs (524348) Q2 2026 earnings summary

Executive summary

• Strategic focus on backward integration, capacity expansion, and cost competitiveness advanced in Q2 FY26, with robust export demand offsetting soft domestic antibiotics demand and supporting margin improvement.

• New Sayakha (Saryaka), Gujarat facility began commercial production in September 2025, enhancing internal supply of key intermediates and supporting antidiabetic API production.

• Tarapur salicylic acid facility progressing through stabilization, with improved operational performance and plans for downstream integration.

• Regulatory progress includes EU and USFDA certifications and BIS standard approval, supporting export margin expansion and domestic competitiveness.

• ESG initiatives advanced, with Crisil ESG 52 rating and a solar JV project to reduce power costs and carbon footprint.

Financial highlights

• Q2 FY26 consolidated revenue at ₹652.9 crore, up 9% year-over-year; H1 FY26 revenue at ₹1,243.7 crore, up 8% year-over-year.

• Q2 FY26 EBITDA at ₹84.4 crore, up 23% year-over-year; EBITDA margin expanded to 12.9% from 11.4%.

• Q2 FY26 PAT at ₹45.2 crore, up 29% year-over-year; PAT margin improved to 6.9% from 5.8%.

• H1 FY26 PAT at ₹99.1 crore, up 45% year-over-year; PAT margin at 8%.

• CapEx for Q2 FY26 was ₹45.6 crore; H1 FY26 CapEx near ₹100 crore, with full-year estimate of ₹150-200 crore.

Outlook and guidance

• Targeting high single-digit value growth for H2 FY26; aiming for mid-teens volume growth in FY27, contingent on successful ramp-up of new capacities.

• EBITDA margin expected to improve sequentially, with a long-term target of 15-16% by end of FY27 as new projects stabilize.

• Tax rate guidance remains at approximately 25% for FY26 and FY27.

• Focus on scaling utilization and converting new assets into steady earnings contributors.

• Expectation of sustainable margin expansion and value creation over FY27–FY29 from recent capacity additions and backward integration.