Q4 & FY26 Earning Call Transcript
AARTIDRUGS · price
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Aarti Drugs reported Q4 FY26 revenue of INR721.1 crore (up 6% YoY) with EBITDA at INR96.6 crore and margin of 13.4%. The company highlighted a sharp sequential recovery driven by pricing stabilization from September 2025, supported by higher crude prices. Key developments include the methylamine plant at Sayakha ramping to 40%+ utilization in Q4 with target of 55-60% in Q1 FY27 and 70%+ within a year. The salicylic acid plant faced headwinds due to equipment delays and ammonia shortages tied to the West Asia conflict. Formulation exports grew 41% YoY to INR91.3 crore, contributing to overall margin improvement. Regulated market share increased from 35% to 38% of exports, with further expansion expected as new US FDA-approved facilities scale up. Management guided for EBITDA margin of 13.5-14% in FY27 versus 13.4% in Q4, with volume growth target of 8-10%. Capex of INR300-400 crore is planned over 2-3 years for brownfield expansions and formulation capacity scaling to INR1,000 crore.
The company is transitioning from investment phase to operational scale-up with improving momentum. Backward integration in metformin and methylamines should drive margin gains as utilization increases, though raw material cost volatility from geopolitical factors remains a key monitorable. Shareholders can expect gradual profitability improvement as new facilities reach optimal utilization and regulated market contribution rises.