Aarti Drugs Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript Aarti Drugs Ltd filed with BSE on 23 May 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Aarti Drugs reported Q4 FY26 consolidated revenue of Rs 721.1 crore, up 6% year-on-year and 20% quarter-on-quarter, with EBITDA of Rs 96.6 crore and an EBITDA margin of 13.4%. Management said pricing began stabilizing from September 2025 and strengthened further in Q4, aided by rising crude prices, while the new methylamine facility at Sayakha ramped up to nearly 1,000 tonnes per month in March 2026. Formulation revenue grew 41% year-on-year in Q4 to Rs 91.3 crore, with exports contributing 69% of that revenue.
2 statements from this call are not shown because their supporting quotes could not be reproduced within our quoting limits. Nothing shown here is affected: every statement on this page carries its verified quote.
Numbers mentioned
Revenue: INR721.1 crores (Q4 FY26)
p. 3
“Q4 FY '26 revenue stood at INR721.1 crores as compared to INR678.6 crores in Q4 FY '25 and INR602.9 crores in Q3 FY '26, reflecting a growth of 6% year-on-year and 20% quarter-on-quarter, respectively.”
Adhish Patil, page 3 of the filed PDF · View the filing
EBITDA: INR96.6 crores (Q4 FY26)
p. 4
“EBITDA stood at INR96.6 crores versus INR95.2 crores in Q4 FY '25 and INR56.3 crores in Q3 FY '25, indicating flattish year-on-year growth and a growth of around 72% on quarter-on-quarter basis.”
Adhish Patil, page 4 of the filed PDF · View the filing
EBITDA margin: 13.4% (Q4 FY26)
p. 4
“EBITDA margin stood at 13.4%.”
Adhish Patil, page 4 of the filed PDF · View the filing
PAT: INR55.3 crores (Q4 FY26)
p. 4
“PAT stood at INR55.3 crores as compared to INR62.8 crores in Q4 FY '25 and INR40.5 crores in Q3 FY '26, a de-growth of 12% year-on-year and up to 36% quarter-on-quarter increase.”
Adhish Patil, page 4 of the filed PDF · View the filing
PAT margin: 7.7% (Q4 FY26)
p. 4
“PAT margin translated to 7.7% for Q4 FY '26.”
Adhish Patil, page 4 of the filed PDF · View the filing
Stand-alone revenue: INR631.7 crores (Q4 FY26)
p. 4
“With respect to the stand-alone business highlights for Q4 FY '26, revenue stood at INR631.7 crores versus INR623.0 crores in Q4 FY '25.”
Adhish Patil, page 4 of the filed PDF · View the filing
Formulation revenue: INR91.3 crores (Q4 FY26)
p. 4
“Revenue from formulations stood at INR91.3 crores compared to INR64.8 crores in Q4 FY '25, up by 41% on year-on-year basis.”
Adhish Patil, page 4 of the filed PDF · View the filing
Formulation revenue: INR330.5 crores (FY26)
p. 4
“For FY '26, formulation revenue was INR330.5 crores compared to INR284.9 crores in FY '25, up by 16%, with exports accounting for 65% of total formulation sales.”
Adhish Patil, page 4 of the filed PDF · View the filing
Exports contribution: 38% (FY26)
p. 5
“Exports contribution increased from 35% in FY 2025 to 38% in FY 2026, from which regulated market contribution also grew to 73% compared to 66%.”
Adhish Patil, page 5 of the filed PDF · View the filing
Sayakha methylamine plant production rate: nearly 1,000 tonnes per month (March 2026)
p. 4
“the facility achieved a production rate of nearly 1,000 tonnes per month during the month of March 2026, and we expect to make further progress on utilization ramp-up during FY 2027.”
Adhish Patil, page 4 of the filed PDF · View the filing
Consolidated long-term debt: INR328 crores
p. 14
“As of today also, our consolidated long-term debt is around INR328 crores and short term would be around INR248 crores.”
Adhish Patil, page 14 of the filed PDF · View the filing
CWIP: INR214 crores
p. 15
“Yes. So, part of that was related to the cogen boiler and some brownfield expansions what we are doing.”
Adhish Patil, page 15 of the filed PDF · View the filing
EBITDA loss from new projects: INR18 crores to INR20 crores (FY26)
p. 15
“A very rough estimate, if you ask me, only the EBITDA loss would be somewhere in the range of INR18 crores to INR20 crores for the entire year?”
Adhish Patil, page 15 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Sayakha plant utilization — 55%-60% · June quarter
stated conditionally by Adhish Patil
p. 5
“But going forward, we are expecting that in June quarter, we should easily cross around 55%, 60% of utilization for that plant.”
Adhish Patil, page 5 of the filed PDF · View the filing
Sayakha plant utilization — upwards of 70% · within a year
stated as an aspiration by Adhish Patil
p. 5
“And within a year's time, we believe that we should be operating upwards of 70% utilization of the methylamine plants.”
Adhish Patil, page 5 of the filed PDF · View the filing
Volume growth — 8% to 10%
stated firmly by Adhish Patil
p. 6
“Nevertheless, we will always strive for achieving a volume growth of 8% to 10%.”
Adhish Patil, page 6 of the filed PDF · View the filing
Internal volume growth target — 10% to 15%
stated as an aspiration by Adhish Patil
p. 6
“Yes. So, the internal target would always be in the range of 10% to 15% growth.”
Adhish Patil, page 6 of the filed PDF · View the filing
Gross margin
stated conditionally by Adhish Patil
p. 7
“So, we don't expect much movement in gross margins as such. Definitely in Q4, we did fairly good in terms of gross margins. So, we would like to maintain this kind of gross margins.”
Adhish Patil, page 7 of the filed PDF · View the filing
EBITDA margin improvement from gross contribution — at least 100 basis points · FY27
stated conditionally by Adhish Patil
p. 10
“Yes, we can expect that in terms of gross contribution. At least 100 basis points, we can definitely target.”
Adhish Patil, page 10 of the filed PDF · View the filing
EBITDA margin — 13.5% to 14% · FY27
stated conditionally by Adhish Patil
p. 13
“So, there is slight uncertainty, but hoping for the best, we would still like to target EBITDA margins anywhere between 13.5% to 14% for this FY 2027.”
Adhish Patil, page 13 of the filed PDF · View the filing
EBITDA margin (pre-war target) — 14% to 14.5% · FY27
stated as an aspiration by Adhish Patil
p. 13
“Had this war not been there, our earlier targets were definitely 14% to 14.5% EBITDA margin for FY 2027.”
Adhish Patil, page 13 of the filed PDF · View the filing
Capex — INR300 crores to INR400 crores · next two to three years
stated firmly by Adhish Patil
p. 11
“So, all put together, we feel that at least in the next two to three years, definitely around INR300 crores to INR400 crores of capex might go in.”
Adhish Patil, page 11 of the filed PDF · View the filing
Formulation business revenue — INR1,000 crores · next three to five years
stated as an aspiration by Adhish Patil
p. 11
“And we are expecting to grow our formulation business at least till INR1,000 crores in the next three to five years.”
Adhish Patil, page 11 of the filed PDF · View the filing
API price increases
stated conditionally by Harit Shah
p. 14
“No, no. Prices are now stable. We don't -- we are not expecting any further increase in the price.”
Harit Shah, page 14 of the filed PDF · View the filing
Formulation EBITDA margin — 16% to 17%
stated firmly by Adhish Patil
p. 11
“the EBITDA margins in the formulation business is now upwards of 16% to 17%, which is very good for us, and it was consistent for the last two quarters.”
Adhish Patil, page 11 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said utilization improved from around 29% to a little over 40% and expects further gains in coming quarters.
Answered by Adhish Patil
Asked by Shashank Goyal: How is the methylamine plant ramping up and what is expected over the next two years?
p. 5
“December quarter was the first quarter where we showed a utilization of around 29% roughly. And then in the March quarter, we were able to achieve a little upwards of 40%.”
Adhish Patil, page 5 of the filed PDF · View the filing
Management said production was shut due to lack of equipment causing variable losses and will restart once new equipment is installed and validated.
Answered by Adhish Patil
Asked by Shashank Goyal: What is the profitability outlook for salicylic acid?
p. 6
“we took a call to shut that production.”
Adhish Patil, page 6 of the filed PDF · View the filing
Management said API prices remain elevated due to the West Asia war and volume growth targets are more modest.
Answered by Adhish Patil
Asked by Dhwanil Desai: Should investors expect 10-12% volume growth and 4-5% positive rate variance given capacity and pricing?
p. 6
“So, the current situation is such that the API prices remain elevated because of West Asia war.”
Adhish Patil, page 6 of the filed PDF · View the filing
Management explained that high API prices can dampen domestic antibiotic demand, capping volume growth expectations.
Answered by Adhish Patil
Asked by Dhwanil Desai: Why is company-level volume growth guided at only 8-10% despite large new capacity?
p. 7
“So, when the API become very expensive, typically, the demand of those products goes down.”
Adhish Patil, page 7 of the filed PDF · View the filing
Management attributed growth to direct exports in the non-oncology portfolio and expanding regulatory approvals.
Answered by Vishwa Savla
Asked by Dhwanil Desai: What is driving strong formulation growth and is the run-rate sustainable?
p. 7
“the current growth is coming from our direct exports in the non-oncology portfolio.”
Vishwa Savla, page 7 of the filed PDF · View the filing
Management said Latin American markets and, going forward, Europe and the US are key targets.
Answered by Adhish Patil
Asked by Jay Jain: Which geographies are driving the regulated market contribution increase?
p. 8
“I would like to highlight that this would be mainly Latin American markets.”
Adhish Patil, page 8 of the filed PDF · View the filing
Management said the company is now the only player with domestic backward integration for the indigenous metformin intermediate, improving cost competitiveness.
Answered by Adhish Patil
Asked by Sajal Kapoor: How much of the metformin value chain does Aarti Drugs now control given backward integration?
p. 10
“there I believe now we are the only ones as of today with a backward integration facility.”
Adhish Patil, page 10 of the filed PDF · View the filing
Management described a multi-pronged approach including phenol recovery equipment, effluent cost reduction, antidumping duty application, and a derivatives plant.
Answered by Adhish Patil
Asked by Meghna Agarwal: What is happening with the salicylic acid restart?
p. 13
“So there are two, three challenges. We are tackling all of them together.”
Adhish Patil, page 13 of the filed PDF · View the filing
Management said prices are now stable and further increases depend on crude oil levels.
Answered by Harit Shah
Asked by Rishabh Jain: Which API products saw price hikes and are they sustainable?
p. 14
“This will definitely depend on the raw material and crude oil level prices basically.”
Harit Shah, page 14 of the filed PDF · View the filing
Management said the budget could be revisited if cash flow from current projects improves significantly.
Answered by Adhish Patil
Asked by Resham Jain: Is there additional capex planned beyond the INR300-400 crore guidance given healthy cash generation?
p. 14
“So based on today's financials, this much is quite easily doable.”
Adhish Patil, page 14 of the filed PDF · View the filing
Management estimated the EBITDA loss for the full year from new projects.
Answered by Adhish Patil
Asked by Resham Jain: What is the total EBITDA loss this year from new project ramp-up?
p. 15
“A very rough estimate, if you ask me, only the EBITDA loss would be somewhere in the range of INR18 crores to INR20 crores for the entire year?”
Adhish Patil, page 15 of the filed PDF · View the filing
Risks flagged
Elevated crude and input costs from the West Asia war affecting raw material supply and pricing
p. 3
“including global trade disruptions, trade tariffs and GST changes and pricing volatility towards the end of the FY '26 by elevated input cost, crude and gas-based raw material supply chain constraints due to the West Asia war.”
Adhish Patil, page 3 of the filed PDF · View the filing
Elevated freight, packaging, utility and energy costs and inconsistent raw material availability
p. 3
“During the quarter, freight, packaging, utility and energy-related costs also remained elevated, while availability of certain key raw materials remained inconsistent at various points.”
Adhish Patil, page 3 of the filed PDF · View the filing
High API prices could reduce domestic antibiotic demand
p. 7
“So, when the API become very expensive, typically, the demand of those products goes down.”
Adhish Patil, page 7 of the filed PDF · View the filing
Salicylic acid production halted due to variable losses from lack of equipment
p. 6
“because we were making variable losses in salicylic acid, because we were not able to recover and reduce the raw material cost because of lack of that equipment.”
Adhish Patil, page 6 of the filed PDF · View the filing
Ammonia-based raw material shortage due to West Asia war affecting Sayakha plant utilization
p. 5
“We fell slightly short of our target of 45%, 50%, mainly because of ammonia-based raw materials in that plant because of the West Asia war.”
Adhish Patil, page 5 of the filed PDF · View the filing
Labor shortage delaying salicylic acid derivatives plant
p. 13
“There is a severe fabrication labor shortage what we observed in the summer season, partly also because of lack of cooking gas and all.”
Adhish Patil, page 13 of the filed PDF · View the filing
Very high crude prices could hurt antibiotic domestic demand
p. 13
“if the crude remains too high, like more than $110, $120, then probably in short run, it might affect the domestic demand of antibiotics.”
Adhish Patil, page 13 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.