Aarti Industries (AARTIIND) Q1 24/25 earnings summary

Executive summary

• Achieved sequential and year-over-year growth in revenue and EBITDA despite supply chain and raw material cost pressures, global overcapacity, and pricing headwinds, with a focus on execution and volume-led recovery.

• Strategic transformation underway, including a 50/50 JV with UPL for downstream amines, leadership strengthening, and new partnerships to drive sustainable growth.

• Celebrated 40 years in specialty chemicals, with renewed focus on innovation, value creation, and long-term growth through expansion projects and R&D investments.

• Consolidated net profit for the quarter ended 30th June 2024 was ₹137 Cr, up from ₹70 Cr last year and ₹132 Cr in the previous quarter.

• The Board of Directors approved the results on August 9, 2024.

Financial highlights

• Q1 FY25 revenue at ₹2,012 crore, up 3% QoQ and 28% YoY; volume growth of 6% QoQ and over 30% YoY.

• EBITDA grew 10% QoQ to ₹311 crore, up 55% YoY; EBITDA margin improved to 15.5%.

• PAT at ₹137 crore, up 96% YoY and 4% QoQ; EPS at ₹3.77, up 95% YoY.

• Export sales grew 66% YoY, now comprising 55.5%-60% of total revenue, driven by energy segment growth.

• Gross margin and operating margin improved, but fluctuated due to raw material volatility, product/geography mix, and external market factors.

Outlook and guidance

• Targeting 20%-25% CAGR EBITDA growth over five years, aiming for 2.5-3x EBITDA growth.

• Confident of 20%-30% volume growth for FY25, but margin pressure from Chinese competition and energy market volatility makes full-year EBITDA guidance uncertain.

• CapEx for FY25 projected at ₹1,500-1,800 crore, peaking this year and expected to decline next year.

• Commissioning of expanded capacities and new projects to drive future growth; long-term credit ratings of AA/Stable retained.