Aarti Drugs Q2 FY27 results: net profit up 83.3% to ₹82.77 crore, revenue up 26.6%

How did Aarti Drugs perform in Q2 FY27?

Aarti Drugs reported consolidated revenue of ₹826.24 crore for Q2 FY27, the July–September 2026 quarter, against ₹652.79 crore in Q2 FY26 and ₹702.78 crore in Q1 FY27. Total income was ₹828.79 crore, up from ₹652.88 crore and ₹703.59 crore in the two comparison periods. On a standalone basis, revenue was ₹706.28 crore and profit before tax was ₹41.78 crore.

EBITDA was ₹135.36 crore and the EBITDA margin was 16.4% in Q2 FY27, compared with ₹84.28 crore and 12.9% in Q2 FY26 and ₹98.20 crore and 14.0% in Q1 FY27. Profit before tax was ₹109.28 crore, up from ₹60.41 crore a year earlier and ₹69.24 crore in the previous quarter.

Net profit for the quarter was ₹82.77 crore, against ₹45.16 crore in Q2 FY26 and ₹50.13 crore in Q1 FY27. The profit attributable to owners was ₹82.94 crore. Basic EPS was ₹9.07, against ₹4.95 a year earlier and ₹5.49 in the previous quarter.

What changed in Aarti Drugs' costs and profit?

Total expenses were ₹719.51 crore in Q2 FY27, up ₹127.04 crore or 21.4% from ₹592.47 crore in Q2 FY26. Cost of materials consumed was the largest line, at ₹477.33 crore against ₹385.06 crore, a rise of ₹92.27 crore or 24.0%. Other expenses were ₹154.70 crore against ₹127.15 crore, employee cost was ₹37.13 crore against ₹33.07 crore, depreciation was ₹19 crore against ₹16.26 crore and finance costs were ₹9.63 crore against ₹7.70 crore.

Other income was ₹2.55 crore against ₹0.09 crore in the year-ago quarter, an increase of ₹2.46 crore. There was no exceptional item in Q2 FY27. Tax expense was ₹26.51 crore, up ₹11.26 crore or 73.8% from ₹15.25 crore, and profit before tax rose ₹48.87 crore or 80.9% to ₹109.28 crore.

The investor presentation stated that the quarter reflected volume growth, realisations across the API, formulations and Specialty Chemicals portfolio, and progress in building a more integrated manufacturing platform. It also said all facilities operated without disruption. The presentation noted that the Specialty Chemicals business nearly doubled as the Sayakha facility scaled up, and that the Formulations business grew 58%.

How did the first half of FY27 go?

In the first half of FY27, consolidated revenue was ₹1,529.03 crore, up ₹285.73 crore or 23.0% from ₹1,243.3 crore in H1 FY26. Total income was ₹1,532.38 crore against ₹1,243.7 crore, an increase of ₹288.68 crore or 23.2%.

Profit before tax for the half year was ₹178.52 crore, up ₹67.0 crore or 60.1% from ₹111.52 crore. Net profit was ₹132.9 crore against ₹99.13 crore, an increase of ₹33.77 crore or 34.1%, and EPS was ₹14.56 against ₹10.86. Tax expense for the period was ₹45.6 crore against ₹12.4 crore in H1 FY26.

What do the balance sheet and cash flow show?

Total assets were ₹3,053.72 crore at 30 September 2026, against ₹2,815.26 crore at 31 March 2026. Total equity was ₹1,681.71 crore against ₹1,549.23 crore, while borrowings were ₹618.61 crore against ₹574.83 crore. Cash and bank balances were ₹8.48 crore against ₹7.27 crore. Inventories were ₹603.12 crore against ₹490.78 crore, trade receivables ₹905.05 crore against ₹829.87 crore, and trade payables ₹498.46 crore against ₹477.88 crore.

Net cash from operating activities in H1 FY27 was ₹65.72 crore, against ₹152.36 crore in H1 FY26. Net cash used in investing activities was ₹90.18 crore against ₹94.06 crore, and net cash from financing activities was ₹25.67 crore against a negative ₹56.22 crore. Capital expenditure was ₹90.22 crore against ₹94.31 crore.

How has Aarti Drugs done over the last 8 quarters?

Revenue rose year on year in each of the last seven quarters. In the series provided, revenue reached its lowest point at ₹556.6 crore in Q3 FY25 and its highest at ₹826.24 crore in Q2 FY27, after ₹720.3 crore in Q4 FY26 and ₹702.78 crore in Q1 FY27. The direction of revenue is now upward on both the sequential and year-on-year comparisons.

Net profit ranged from ₹37.09 crore in Q3 FY25 to ₹82.77 crore in Q2 FY27, having been ₹45.16 crore in Q2 FY26 and ₹50.13 crore in Q1 FY27. The EBITDA margin bottomed at 9.1% in Q3 FY26 and reached 16.4% in Q2 FY27, against 12.9% a year earlier and 14.0% in the previous quarter.

What else did the company announce?

The board met on 3 November 2026 and approved the audited standalone and consolidated financial results for the quarter and half year ended 30 September 2026, together with the statement of assets and liabilities, the cash flow statement and the auditor's report. The meeting began at 2:30 PM and concluded at 4:20 PM. The statutory auditors expressed an unmodified audit opinion on the results for the quarter.

The company also filed its Q2 and H1 FY27 investor presentation on 3 November 2026. No dividend, fund raise or appointment was announced in the same-day filings reviewed for this result. The trading window had been kept closed until 48 hours after the declaration of the financial results, following the board meeting intimation dated 27 October 2026.

What did Aarti Drugs' management say?

Management said it held approximately 15% consolidated EBITDA margin as sustainable, even after Q2 FY27's 16.6% peak. It assumed API volume growth of 5–10% in H2 FY27, compared with the roughly 10% company-level target discussed at the start of the year, and expected API pricing to remain stable for now. Formulations revenue was expected to sustain the current quarterly level through the rest of FY27, with about four months of export-order visibility.

On capacity, management said Sarigam metformin capacity would rise from 1,300 tons per month to 1,700 tons per month with commercialisation planned in early FY28. It also set out a 500 tpm USFDA block by end-FY28, nearly doubled Baddi OSD capacity by mid-FY28, and Tarapur commercial production toward end-FY29, where more than double capacity is planned through an adjacent block with three multi-purpose plants and 18–20 months to commercial production.

Management said the ₹1,000 crore formulations target may be reached earlier as oncology, exports and Baddi capacity scale. Adesh Patel, Managing Director, said: "These gains in product mix, backward integration, and cost efficiency are structural, and they will stay with us even as the pricing environment normalizes over time." Risks cited on the call included API pricing normalising as geopolitical supply conditions ease, customer destocking at higher prices, formulation margins falling from Q2's level, a pending anti-dumping data submission and review for a specific asset, and API and CDMO capex allocation and the product roadmap not being finalised.

How did Aarti Drugs shares react?

The results were filed after market hours on 3 November 2026. From the price when the filing appeared, the stock fell 2.6% within five minutes, 4.9% within 15 minutes and 5.5% within 30 minutes. On the reaction day, the stock closed 2.6% below its previous close of ₹466.55, against a base price of ₹492.0.

By the next day's close, the stock was down 4.8% from its pre-results close. The median move for other Pharmaceuticals stocks was 0.8% on the reaction day and 1.6% by the next day's close, so Aarti Drugs trailed the industry median by 3.4 percentage points and 6.4 percentage points respectively. The Nifty Microcap 250 rose 2.2% on the reaction day.

On earlier results days, the reaction-day move was -3.6% on 31 July 2026, -0.3% on 15 May 2026 and -6.0% on 3 February 2026. Earlier moves were 0.9% on 7 November 2025, 4.0% on 18 July 2025, 19.7% on 6 May 2025, 2.0% on 29 January 2025 and -1.5% on 24 October 2024.

How did other Pharmaceuticals companies do?

Among 71 Pharmaceuticals companies compared for the quarter, the median revenue growth was 18.9%. Of the peers whose revenue growth was compared with Aarti Drugs, 45 grew slower than the company and 26 grew faster. Of 66 peers with profit compared, 48 reported higher profit.

Aarti Drugs' Q2 FY27 revenue growth of 26.6% was above the 18.9% median growth recorded across the 71 Pharmaceuticals companies compared for the quarter.