Aarti Industries Limited – Investor Presentation Summary

Key Operational Highlights

  • Business volumes: Energy segment YoY +57%, QoQ -17%; Non-Energy segment YoY +12%, QoQ -7%
  • Fuel additives capacity expansion from 290 to 360 kTPA completed in July 2026
  • West Asia conflict impacted supply chain, reducing Middle East revenues from ~15% to 2% of total
  • Volume recovery expected in Q2 FY27 with underlying stable demand
  • 70% of cost savings ideas implemented across value chains
  • 40+ GenAI use cases executed over last quarter

Segment-wise Performance

Revenue by End Use (Q1 FY27):

  • Agrochemicals & Fertilizers: 18% share (₹2,627 Cr)
  • Dyes, Pigments and Printing Inks: 15% share
  • Energy Application: 38% share
  • Pharma Applications: 14% share
  • Polymer & Additives: 11% share
  • Others: 4% share

Financial Highlights

  • Revenue: Increased 18% YoY (driven by higher input prices passed to customers)
  • Working capital increased due to higher input prices and exports
  • Higher debt and finance costs due to working capital requirements
  • EBITDA improved due to product mix optimization and FX gains

Geographical Revenue Split

  • Domestic: 58%
  • Export: 42%
  • Significant geographical shift: Volumes redirected from GCC markets to other international regions due to West Asia conflict

Strategic & R&D Initiatives

  • JV with Superform: Under execution, on track for commissioning and ramp-up in Q2 FY27
  • Re Aarti (Chemical recycling of plastics): Execution under progress, expected commissioning in H2 FY27 (delayed by 3 months due to labor constraints)
  • Building inhouse Digital and Analytics capability
  • MPP commissioning and ramp up planned
  • Zone 4 commissioning planned
  • Augene JV commissioning and ramp up planned
  • Focus on adjacent markets: advanced materials, battery materials, defense and coatings segments
  • Developing newer growth platforms in sustainability/circularity

Industry Trends & Business Environment

  • West Asia crisis created significant volatility in RM prices
  • China removed export VAT rebate for major NCB chain products from April 2026
  • Soft demand in US and China downstream markets in Q1
  • Demand recovery expected in Q2 FY27
  • Competitors scaling up driven by higher demand outlook across geographies

Management Commentary & Growth Outlook

  • Target EBITDA range of ₹1,800-2,200 Cr over 3-year plan (FY25-FY28)
  • Target Debt/EBITDA of <2.5x
  • Cost optimization initiatives expected to contribute ₹150-200 crore
  • Volume growth initiatives expected to contribute ₹350-550 crore
  • New product development expected to contribute ₹300-450 crore
  • All major projects to commission in FY27

Sustainability

  • Ecovadis Platinum rating secured with score of 87/100 (top 1% of companies)