Aarti Drugs (524348) Q4 25/26 earnings summary

Executive summary

• FY 2026 marked a transition from investment to operational scale-up, with improved momentum in Q4 despite macroeconomic and geopolitical headwinds, including global trade disruptions, pricing pressure, and elevated input costs.

• Q4 FY26 saw a strong sequential recovery, driven by operational scale-up at the Saykha facility, improved export traction, and a better product mix.

• Regulated market and export contributions increased, supporting margin quality and earnings stability.

• Diversification into Formulations and Specialty Chemicals segments showed robust growth.

• Audited standalone and consolidated financial results for the quarter and year ended March 31, 2026, were approved by the Board on May 15, 2026.

Financial highlights

• Q4 FY26 consolidated revenue was INR 721.1 crores, up 6% year-on-year and 20% quarter-on-quarter; full-year consolidated revenue was INR 2,567.7 crores, up 7% year-on-year.

• Q4 FY26 EBITDA was INR 96.6 crores, flattish year-on-year but up 72% sequentially; EBITDA margin at 13.4%.

• FY26 PAT increased 16% year-on-year to INR 194.9 crores; basic and diluted EPS for FY26 was INR 21.36, up from INR 18.44 in FY25.

• Gross margin improved to 37.0% in FY26 from 36.1% in FY25; PAT margin rose to 7.6% from 7.0%.

• Standalone revenue for Q4 FY26 was INR 631.7 crores, with 63% from domestic and 37% from export markets.

Outlook and guidance

• Targeting 8%-10% volume growth, with internal targets up to 15% depending on market conditions and crude prices.

• EBITDA margin guidance for FY27 is 13.5%-14%, with potential upside if input costs stabilize.

• Sayakha facility expected to enhance margin resilience and backward integration benefits.

• Formulation segment expected to maintain current run rate, with further growth as new approvals and oncology ramp up.

• Foundations in backward integration, regulatory approvals, and specialty product development position the company for improved profitability and return ratios in FY27 and beyond.