Aarti Industries (AARTIIND) Q4 25/26 earnings summary

Executive summary

• Q4 FY26 marked by global supply chain disruptions due to Middle East tensions, but operations remained resilient through product diversification and proactive volume redirection; recognized with the 2026 Gallup Exceptional Workplace Award and ranked in the top 2% of global chemical companies for sustainability.

• Two major long-term contracts signed: a backward integration initiative with a global chemical company (INR 200–250 crore CapEx, 15-year term) and a $150 million multi-year supply agreement with a global agrochemical innovator (till March 2030, no major CapEx); additional contracts support long-term growth.

• Commissioned new capacities and JV projects, with further expansions and downstream integrations underway.

• Revenue from operations (consolidated) for FY26 was ₹8,286 Cr, up from ₹7,269 Cr year-over-year.

• Board recommended a dividend of ₹1 per equity share for FY26.

Financial highlights

• Q4 FY26 revenue: INR 2,422 crore, up 9% YoY; EBITDA: INR 342 crore, up 29–30% YoY; PAT: INR 137 crore, up 43% YoY; full-year FY26 revenue: INR 9,018 crore, up 12% YoY; EBITDA: INR 1,172 crore, up 15% YoY; PAT: INR 419 crore, up 27% YoY.

• Standalone net revenue for FY26 was ₹8,422 Cr, up from ₹7,302 Cr in FY25; standalone net profit after tax for FY26 was ₹422 Cr, up from ₹340 Cr in FY25.

• Consolidated EBITDA margin for FY26 was 12.95%, up from 12.40% in FY25; earnings per share (consolidated, basic) for FY26 was ₹11.56.

• CapEx for FY26 at INR 1,125 crore; working capital and net debt increased due to higher raw material prices and export-driven receivables; FX gain of INR 10 crore in Q4; INR 39 crore revaluation loss on long-term FX loan due to rupee depreciation.

Outlook and guidance

• FY27 CapEx expected at INR 700–800 crore, focused on completing Zone IV and new long-term contracts; targeting FY28 EBITDA of ₹1,800–2,200 crore, Debt/EBITDA below 2.5x, and ROCE above 15%.

• Anticipates net debt reduction in FY27 as CapEx intensity declines and cash flows improve; cost optimization, volume ramp-up, and capex-led growth expected to drive EBITDA growth in FY26–FY28.

• Cautious optimism for FY27, supported by improved capacity utilization, strong order visibility, and ongoing integration initiatives; tax rate expected in the 9–15% range due to Zone IV commercialization and related deductions.

• Long-term issuer and bank facilities credit ratings retained at AA/Negative by CRISIL and India Ratings.