Aarti Drugs (524348) Q4 24/25 earnings summary

Executive summary

• Q4 FY25 revenue grew 9% year-over-year to INR 679 crore, with EBITDA up 10% and PAT up 33% to INR 63 crore.

• FY25 revenue declined 5% to INR 2,403 crore, EBITDA fell 5% to INR 303 crore, and PAT decreased 2% to INR 168 crore compared to FY24.

• API segment contributed 81% of FY25 revenue, with a focus on expanding specialty chemicals and formulations.

• Strong balance sheet with net debt/equity at 0.45x and robust operating cash flows of INR 245 crore in FY25.

• Buyback of 665,000 shares completed in September 2024, reducing paid-up capital.

Financial highlights

• Q4 FY25 EBITDA margin reached 14.5% standalone, 14% consolidated; FY25 EBITDA margin at 12.6%.

• FY25 gross margin improved by over 200 bps to 35.8% year-over-year.

• Q4 FY25 PAT margin rose to 9.2%; FY25 PAT margin at 7.0%, up 20 bps year-over-year.

• EPS for FY25 at INR 18.4 consolidated, INR 17.18 standalone.

• Net operating cash flow for FY25 at INR 245 crore, down from INR 359 crore in FY24.

Outlook and guidance

• Double-digit revenue growth targeted for FY26 and FY27, mainly volume-driven.

• Revenue target of INR 3,000 crore by FY27, with potential to reach INR 3,500 crore.

• EBITDA margin guidance maintained at 14-15% for FY26.

• Capex of INR 600 crore underway, targeting revenue potential of INR 4,200–4,500 crore in 5–6 years.

• Focus on brownfield expansion, backward integration, and new product launches in API and formulations.