Aarti Industries Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript Aarti Industries Ltd filed with BSE on 11 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 Industries reported Q4 FY26 revenue of Rs 2,422 crore, up 9% year-on-year, with EBITDA of Rs 342 crore, up 29%, and PAT of Rs 137 crore, up 43%. Management cited geopolitical disruption in the Middle East, sharply higher raw material and freight costs, and a delay in Zone IV project commissioning due to contract labour shortages. For FY26, revenue was Rs 9,018 crore, EBITDA Rs 1,172 crore, and PAT Rs 419 crore, with capex of Rs 1,125 crore for the year.
Numbers mentioned
Revenue: INR2,422 crore (Q4 FY26)
p. 3
“For the Q4 FY26, the company reported revenue of INR2,422 crore, representing a growth of 9% Y-o-Y, driven by stable domestic demand and increase in export volumes.”
Suyog Kotecha, page 3 of the filed PDF · View the filing
EBITDA: INR342 crore (Q4 FY26)
p. 3
“EBITDA stood at INR342 crore, growing 29% Y-o-Y and profit after tax was INR137 crore, registering a growth of 43% Y-o-Y.”
Suyog Kotecha, page 3 of the filed PDF · View the filing
Revenue: INR9,018 crore (FY26)
p. 3
“For the full year FY26, revenue stood at INR9,018 crore, up 12% on a Y-o-Y basis.”
Suyog Kotecha, page 3 of the filed PDF · View the filing
EBITDA: INR1,172 crore (FY26)
p. 3
“EBITDA grew by over 15% to close at INR1,172 crore, while PAT recorded a growth of about 27% to close the year at INR419 crore.”
Suyog Kotecha, page 3 of the filed PDF · View the filing
Capex: INR1,125 crore (FY26)
p. 3
“In line with the guidance given, the capex for the year was at about INR1,125 crore.”
Suyog Kotecha, page 3 of the filed PDF · View the filing
FX revaluation loss on foreign currency loan: INR39 crore (Q4 FY26)
p. 3
“Interest costs also include an amount of INR39 crore being the revaluation loss in respect of our long-term foreign currency loan.”
Suyog Kotecha, page 3 of the filed PDF · View the filing
Net debt: INR4,300 crore (FY26 year-end)
p. 9
“So, on a net debt basis, we are still at around INR4,300 crore.”
Chetan Gandhi, page 9 of the filed PDF · View the filing
Net debt to EBITDA: 3.6x (FY26 year-end)
p. 16
“We are roughly at a 3.6x level, just to get that perspective right.”
Suyog Kotecha, page 16 of the filed PDF · View the filing
Unhedged FX loan exposure: $87 million
p. 12
“So, we have roughly around $87 million of an FX loan, which is unhedged and is open.”
Chetan Gandhi, page 12 of the filed PDF · View the filing
Share of revenue from Middle East: 9% to 10% (yearly average)
p. 5
“So, on an yearly average basis, roughly 9% to 10% of our revenue came from Middle East, which is dominantly in energy application.”
Suyog Kotecha, page 5 of the filed PDF · View the filing
Share of revenue from exports: 57% (Q4 FY26)
p. 12
“I think the on an overall basis, almost 57% of total revenue came from exports.”
Suyog Kotecha, page 12 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.
Capex — INR700 crore to INR800 crore · FY27
stated firmly by Suyog Kotecha
p. 4
“Our capex for FY27 is expected to be in the range of INR700 crore to INR800 crore as we continue our journey to optimize capex and maximize the returns.”
Suyog Kotecha, page 4 of the filed PDF · View the filing
Net debt — FY27
stated conditionally by Suyog Kotecha
p. 4
“However, given the capex intensity is lower, we still anticipate the net debt to decline in the current year.”
Suyog Kotecha, page 4 of the filed PDF · View the filing
Zone IV commissioning — FY27
stated firmly by Suyog Kotecha
p. 6
“I think the entire capex will get commissioned during FY27.”
Suyog Kotecha, page 6 of the filed PDF · View the filing
Augene Superform JV commissioning — H1FY27
stated firmly by Suyog Kotecha
p. 4
“Augene, the Superform joint venture is on track for commissioning in H1FY27 with an initial focus on agrochemicals and coating end markets.”
Suyog Kotecha, page 4 of the filed PDF · View the filing
Net working capital days — 55 to 60 days
stated as an aspiration by Suyog Kotecha
p. 14
“Ideally, we would like to remain within 55 to 60 days kind of average levels.”
Suyog Kotecha, page 14 of the filed PDF · View the filing
Tax rate — 9% to 14%, 15% · later years
stated conditionally by Chetan Gandhi
p. 14
“the tax rate will be in the range of around maybe 9% to 14%, 15% kind of stuff lateron.”
Chetan Gandhi, page 14 of the filed PDF · View the filing
Net debt to EBITDA — 2.5x · next 2 years
stated as an aspiration by Suyog Kotecha
p. 16
“Overall, at least the internal target is to reduce the net debt levels from the current levels in the current financial year despite the current pricing scenario and the capex intensity that is planned for the current year.”
Suyog Kotecha, page 16 of the filed PDF · View the filing
Gross block — INR9,500 crore to INR10,000 crore · end of FY27
stated firmly by Chetan Gandhi
p. 18
“End of FY27, we should be in the range of around INR9,500 crore to INR10,000 crore.”
Chetan Gandhi, page 18 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 there was an FX gain of around Rs 10 crore but no significant inventory gain due to offsetting raw material cost increases.
Answered by Suyog Kotecha
Asked by Archit Joshi: Was there an inventory gain boosting gross margin this quarter?
p. 5
“So, on an overall quarter basis, there is an FX gain of roughly around INR10 crore.”
Suyog Kotecha, page 5 of the filed PDF · View the filing
Management said utilization improvement was a deliberate company strategy and that pricing recovery is happening only in select value chains, not broad-based.
Answered by Suyog Kotecha
Asked by Arun Prasath: Is the high utilization level company-specific or industry-wide, and will it lead to pricing recovery?
p. 7
“I think there are definitely pockets of the portfolio where it is happening. And in general, I think given the global dynamic, I think if China continues to act what they are talking about, then there should -- this recovery should become much more broad-based going forward compared to current situation where it is sort of in select pockets.”
Suyog Kotecha, page 7 of the filed PDF · View the filing
CFO explained the elevated gross cash was a timing one-off from a term loan disbursement, and net debt was actually around Rs 4,300 crore, partly due to working capital increases.
Answered by Chetan Gandhi
Asked by Aditya Khetan: Why is debt at a historical high despite lower planned capex and available cash?
p. 9
“So, the cash which you see is more like a one-off kind of a situation. It just happened that one of the term loans got disbursed towards the last days of March and then a couple of holidays, so the monies were not effectively utilized to reduce the debt.”
Chetan Gandhi, page 9 of the filed PDF · View the filing
Management said cost and operating leverage initiatives remain on track, but the capex-related delay will affect the timing of realizing that EBITDA potential.
Answered by Suyog Kotecha
Asked by Nitesh Dhoot: Does the Zone IV delay put the targeted EBITDA guidance at risk?
p. 12
“I think on the capex side, yes, we are behind compared to our original plan and that 3 to 4 months of delay will have an impact in terms of how much we were budgeting over the course of next 2 years, but we are figuring out strategies to mitigate that impact.”
Suyog Kotecha, page 12 of the filed PDF · View the filing
Management said the internal target is to reduce net debt this year as EBITDA improves and capex intensity declines, though higher crude/raw material costs remain a working capital risk.
Answered by Suyog Kotecha
Asked by Sanjesh Jain: What is the path to reaching 2.5x net debt to EBITDA?
p. 16
“the anticipation is that the EBITDA will increase and the net debt will go down.”
Suyog Kotecha, page 16 of the filed PDF · View the filing
Management said their product portfolio differs from the affected Chinese products and that AIL already operates predominantly with safer continuous nitration processes.
Answered by Suyog Kotecha
Asked by Dhruv Muchhal: Do the nitration-related safety incidents in China have implications for AIL's own operations?
p. 17
“I think especially from an AIL standpoint, bulk of our operations now we have moved to continuous nitration, which is inherently much safer than the batch nitration.”
Suyog Kotecha, page 17 of the filed PDF · View the filing
Management acknowledged this as a potential risk to discretionary demand in both global and Indian markets, though not currently materializing.
Answered by Suyog Kotecha
Asked by Rohit Nagraj: Could domestic demand also weaken if there is a broader inflationary or GDP slowdown?
p. 18
“But that is a scenario which we continue to monitor and sort of mitigate. At this point in time, difficult to comment, but it is a potential risk in case we start seeing impact of the global GDP level, including India.”
Suyog Kotecha, page 18 of the filed PDF · View the filing
Management said the situation is already a serious challenge today given the scale of the raw material cost increase and revenue exposure loss, but they are working to mitigate the impact.
Answered by Suyog Kotecha
Asked by Nitin Agarwal: At what point does the West Asia disruption become a serious threat rather than a temporary hiccup?
p. 21
“I think it is not easy to handle more than 60% increase in raw material pricing in a 2 weeks' time frame. It is not easy when 10% of your revenue, which is going to a market suddenly shuts, right?”
Suyog Kotecha, page 21 of the filed PDF · View the filing
Risks flagged
Middle East geopolitical disruption affecting supply chains, raw material prices and trade flows
p. 2
“The escalation of geopolitical tensions in the Middle East has led to disruptions across global supply chains, impacting trade flows, logistics timelines and input cost structures.”
Suyog Kotecha, page 2 of the filed PDF · View the filing
Sharp raw material price increases
p. 2
“In particular, the prices of key raw materials such as benzene, sulfur, aniline, toluene, methanol went up by over 60%.”
Suyog Kotecha, page 2 of the filed PDF · View the filing
Elevated freight rates increasing cost of trade
p. 2
“Elevated freight rates are also resulting in an increase in cost of global trade.”
Suyog Kotecha, page 2 of the filed PDF · View the filing
Delay in Zone IV capex due to contract labour shortage
p. 12
“There is a 35% reduction in the contract labour availability in the region where we are executing capex.”
Suyog Kotecha, page 12 of the filed PDF · View the filing
MPDA underperformance due to Chinese competition
p. 4
“Within the polymer application, MPDA specifically continues to underperform due to heavy competition from China.”
Suyog Kotecha, page 4 of the filed PDF · View the filing
Volatility in refining margins and gasoline-naphtha cracks affecting energy business
p. 3
“Ongoing volatility in the refining product margin does create uncertainty in terms of gasoline naphtha cracks and the supply chain risk related to the key RMs is adding some near-term risk to this business.”
Suyog Kotecha, page 3 of the filed PDF · View the filing
Working capital strain from higher raw material costs and export mix
p. 4
“Working capital requirements expanded during the quarter, driven primarily by significant elevation in raw material prices, causing an uptick in net debt as well as interest expenses.”
Suyog Kotecha, page 4 of the filed PDF · View the filing
Potential demand destruction in low-margin dye and pigment segments due to high raw material pass-through
p. 9
“There is a part of the portfolio where because of extremely high raw material pricing and corresponding price being passed on through our products, some of the low-margin segments may not be able to afford, and we might see a slight amount of demand destruction.”
Suyog Kotecha, page 9 of the filed PDF · View the filing
Possible further working capital strain if crude prices rise further
p. 16
“If it goes to a scenario where it goes to $140, $150 a barrel, then of course, we are looking at a scenario where the raw material; the working capital requirement will go even further up, and that will put a strain on the balance sheet.”
Suyog Kotecha, page 16 of the filed PDF · View the filing
Unhedged foreign currency loan exposure causing FX revaluation losses
p. 12
“Unfortunately, the accounting treatment requires us to take the impact of this on the day of the balance sheet, whereas if you look at our overall dollar perspective, say, this is relatively an exposure, which will be repaid over a period of next 8 years.”
Chetan Gandhi, page 12 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.