Aarti Drugs (524348) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 revenue grew 6% year-on-year to INR 591 crore, with API business volumes up 5% and formulation business up 14% year-on-year to INR 80 crore.

• Gross profit margin improved by 130–140 bps to 36.8%, and EBITDA rose 12% year-on-year to INR 74 crore, with EBITDA margin at 12.6%.

• PAT increased 62% year-on-year to INR 54 crore, with PAT margin up 310 bps to 9.1%.

• Backward integration, capacity expansions, and new regulatory approvals are expected to drive future margin and volume growth.

• Strategic focus on execution, cost optimization, and product mix enhancement for sustainable growth.

Financial highlights

• Q1 FY26 total revenue: INR 591 crore, up 6% year-on-year.

• Gross profit: INR 217 crore (+11% YoY); gross margin: 36.8% (+130–140 bps YoY).

• EBITDA: INR 74 crore (+12% YoY); EBITDA margin: 12.6% (+70 bps YoY).

• PAT: INR 54 crore (+62% YoY); PAT margin: 9.1% (+310 bps YoY).

• EPS for Q1 FY26: INR 5.91 vs. INR 3.62 in Q1 FY25.

Outlook and guidance

• Targeting 15% CAGR in volume and value growth for FY26 and FY27, with H2 FY26 expected to see double-digit revenue growth as negative price variance subsides.

• EBITDA margin guidance of 15–16% achievable by FY27, with improvement expected from H2 FY26 as capacity utilization rises and new assets stabilize.

• CapEx for FY26 guided at INR 150–200 crore, focused on growth, R&D, and expansion in regulated markets.