Aarti Drugs (524348) Q3 25/26 earnings summary

Executive summary

• Q3 FY26 revenue grew 8% YoY to INR 602.9 crores, with PAT up 58% YoY to INR 40.5 crores and PAT margin at 6.7%.

• EBITDA for Q3 FY26 was INR 56.3 crores, with margin at 9.3%, impacted by higher-cost inventory and maintenance shutdowns.

• Growth was driven by strong domestic demand, robust export formulation performance, and operationalization of new backward integration and salicylic acid plants.

• Audited standalone and consolidated financial results for Q3 and nine months ended December 2025 were approved and published.

• Interim dividend of ₹2 per equity share declared for FY 2025-26, with record date set as February 9, 2026.

Financial highlights

• Q3 FY26 consolidated revenue: INR 602.9 crores (up 8% YoY); nine months: INR 1,846.6 crores (up 8% YoY).

• Q3 EBITDA: INR 56.3 crores (down 10% YoY), margin 9.3%; nine months EBITDA: INR 215 crores (up 9% YoY), margin 11.6%.

• Q3 PAT: INR 40.5 crores (up 58% YoY), PAT margin 6.7%; nine months PAT: INR 139.7 crores (up 49% YoY), margin 7.6%.

• Standalone Q3 revenue: INR 530 crores (88% of consolidated); standalone net profit: INR 33.84 crores; consolidated net profit: INR 40.55 crores.

• Gross margin for nine months FY26 improved by 120 bps to 36.7%.

Outlook and guidance

• Expecting 12%-15% volume growth in FY 2027, mainly from new projects and greenfield expansions.

• Gross margin target of 36% for FY 2027, supported by higher export share, backward integration, and stabilization of new plants.

• EBITDA margin expected to recover to 12%-13% in the near term, with steady-state margins of 14%-15% as new capacities ramp up.

• Backward integration plant expected to reach 50% capacity by March/April 2026 and full self-reliance for Metformin intermediates in 6-8 months.

• Impact assessment of new Indian Labour Codes is ongoing; adjustments will be made in Q4 FY26.