Aarti Industries Limited submitted its Q2 FY27 Results Presentation to BSE Limited and National Stock Exchange of India Limited under Regulation 30 of the SEBI (LODR) Regulations, 2015. The document was signed by Raj Kumar Sarraf, Company Secretary (ICSI M. No. A15526).

Business Highlights Q2 FY27

  • The company was awarded the Sword of Honor by British Safety Council for its R&D Unit.
  • Existing Long-Term contracts remain stable, and the Augene JV is under commissioning trial with ramp-up expected from H2 FY27.
  • Fuel Additives Capacity expansion from 290 to 360 kTPA was completed in July 2026, driving overall volume growth across product portfolios.
  • Cost savings initiatives are being implemented using digital and advanced analytics focused on yield improvement, energy efficiency, and reliability.
  • The company is building in-house digital and analytics capabilities with 50+ GenAI use cases executed over the last quarter.

Zone IV Manufacturing Facility

  • Phase I of Zone IV has been commissioned, including Calcium Chloride, PEDA, and part of the Multipurpose Plant (MPP).
  • This enables deeper downstream integration and flexible manufacturing capabilities for value-added products.
  • Several products from Zone IV are expected to be manufactured in India for the first time.
  • Progressive commercialization of all Zone IV manufacturing blocks is targeted during FY27.

Strategic Manufacturing Partnership

  • The company entered into a 10+ year strategic manufacturing and supply agreement with a global speciality chemical company.
  • Estimated cumulative revenue of approximately ₹1,500 crore (~US$150 million) over the contract period.
  • AIL will set up, commission, and operate a manufacturing facility in India using the customer's proprietary process technology.
  • Customer-led financing for CAPEX of less than US$25 million.
  • Operations expected to commence in FY29.

Financial Performance (Consolidated)

  • Revenue increased due to overall volume growth and passing-on of elevated input prices to customers.
  • Volume Growth: Energy volumes increased 57% YoY and 51% QoQ; Non-Energy volumes increased 19% YoY and 7% QoQ.
  • Energy volumes increased across USA, EU, MENA, and India.
  • Consolidated EBITDA stood at ₹418 crore versus Standalone EBITDA of ₹459 crore. The gap is due to an incremental provision for stock reserve created at consolidated levels for in-transit inventories yet to be delivered to end customers.
  • Working capital and debt increased due to higher input prices, resulting in increased finance costs.

Capacity Utilization

  • Fuel Additives capacity expanded from 290 to 360 kTPA (completed July 2026).
  • DCB debottlenecking to 140 kTPA is underway.
  • NT and Ethylation capacity utilization driven by MEA and DEA demand; expected to improve with DEA downstream integration investment (PEDA).
  • PDA capacity utilization impacted by subdued US demand and competition from China.

Revenue by End Use

  • Agrochemicals & Fertilizers (12%): Demand steady but weak monsoon might impact H2.
  • Dyes, Pigments & Printing Inks (12%): Steady growth driven by robust domestic demand.
  • Energy Application (50%): Strong global demand driven by high refining margins and gasoline-naphtha cracks; revenue share increase also due to price increases from higher RM costs.
  • Pharma Applications (13%): Revenue growth driven by price and volume increase in PNCB.
  • Polymer & Additives (10%): Impacted by PDA chain softness; expected to improve in Q3 FY27 driven by DCB demand.

Joint Ventures

  • DCA downstream JV with Superform Chemical for recycling of plastics is under commissioning trials; commercial volumes to begin soon.
  • Critical equipment delivered; on-ground execution underway; project expected to be commissioned in H2 FY27.

Growth Outlook

  • The company outlined key EBITDA growth drivers in its 3-year plan (FY25-FY28) with projects on track to commission in FY27.
  • Long-term growth focus areas include MPP and Zone 4 commercialization, entry into adjacent markets (advanced materials, semiconductors, battery chemicals), and strategic alliances/CDMO services.