Aarti Drugs (524348) Q2 2026 earnings summary

Executive summary

• Achieved strong year-over-year growth in revenue, EBITDA, and PAT for Q2 and H1 FY26, driven by robust export demand, margin improvement initiatives, and disciplined execution.

• Strategic focus on backward integration, capacity expansion, and cost competitiveness, with new facilities like Sayakha/Saryaka commencing production and enhancing operational efficiency.

• Export demand offset domestic softness, especially in antibiotics, supporting overall margin performance.

• Ongoing regulatory progress and ESG initiatives, including EU/USFDA certifications and renewable energy projects.

• Audited standalone and consolidated financial results for Q2 and H1 FY26 were approved, with no material impact from operational incidents.

Financial highlights

• Q2 FY26 consolidated revenue: ₹652.9 crore, up 9% year-over-year; H1 FY26: ₹1,243.7 crore, up 8%.

• Q2 FY26 EBITDA: ₹84.4 crore, up 23% year-over-year; margin expanded to 12.9%.

• Q2 FY26 PAT: ₹45.2 crore, up 29% year-over-year; H1 FY26 PAT: ₹99.1 crore, up 45%.

• Gross margin for Q2 FY26 at 37.5%, up 310 bps year-over-year; PAT margin at 6.9%.

• CapEx for Q2 FY26: ₹45.6 crore; H1 FY26 CapEx near ₹100 crore; major capex cycle nearing completion.

Outlook and guidance

• Targeting high single-digit value growth for H2 FY26 and mid-teens volume growth in FY27 if ramp-up succeeds.

• EBITDA margin expected to improve sequentially, targeting 15% by end of FY27, contingent on capacity utilization and product ramp-up.

• Focus on scaling utilization and converting new assets into steady earnings contributors.

• Tax rate guidance remains at approximately 25% for FY26 and FY27.