Company Overview

Aarti Pharmalabs Limited (APL) is part of the Aarti group, a diversified chemical conglomerate with group turnover of INR 145+ bn (FY26). The company is a globally recognized manufacturer of generic API, Xanthine derivatives (world's third largest capacity) and a leading player in CDMO/CMO services. The company has received accreditation from several agencies including USFDA, EU GMP, EDQM, KFDA, and COFEPRIS.

Financial Performance - Standalone (Q2 FY27)

  • Operational Revenue: INR 6,126 Mn, up 14.6% QoQ and 46.8% YoY
  • EBITDA: INR 1,358 Mn, up 2.3% QoQ and 83.3% YoY
  • EBITDA Margin: 22.17% (265 bps decrease QoQ, 441 bps increase YoY)
  • PAT: INR 658 Mn, down 7.7% QoQ but up 180.0% YoY
  • PAT Margin: 10.74% (260 bps decrease QoQ, 511 bps increase YoY)
  • Diluted EPS: INR 7.24, down 7.9% QoQ but up 179.5% YoY
  • Exceptional Items: INR (20) Mn gain in Q2-FY27

Financial Performance - Half Yearly Standalone (H1-FY27)

  • Operational Revenue: INR 11,472 Mn, up 44.7% YoY
  • EBITDA: INR 2,685 Mn, up 58.7% YoY
  • EBITDA Margin: 23.40% (205 bps increase YoY)
  • PAT: INR 1,371 Mn, up 92.6% YoY
  • PAT Margin: 11.95% (297 bps increase YoY)
  • Diluted EPS: INR 15.10, up 92.1% YoY

Operational Highlights

  • RM costs remain elevated due to geopolitical tensions, with increases being passed on for majority of products
  • Capacity expansion in Q1FY27 in Steroid Block at API Plant (Tarapur-4) has started contributing to production and sales
  • Headwinds in API segment are subsiding with continuous cost optimization
  • Both phases of Atali Block 1 have been operationalized
  • Xanthine derivatives capacity expanded from 5,000 MTPA to 9,600+ MTPA with phased ramp-up underway till FY27 end
  • Expanded capacity expected to drive global market share from 15-20% to 20-25%

Manufacturing and Regulatory Status

The company has multiple manufacturing units with various certifications:

  • Dombivali Unit I: USFDA (Jun 2022)
  • Vapi Unit II: USFDA (Sep 2009, Aug 2017)
  • Tarapur Unit IV: USFDA (Mar 2008, Sep 2011, Mar 2015, Dec 2016, Feb 2020), EUGMP (Apr 2008, May 2012, Aug 2013, Jan 2015), EDQM (Sep 2019), KFDA (Nov 2017), COFEPRIS (Apr 2017, May 2017)

CDMO/CMO Business Update

  • Working with 23 customers on 59 active projects (39 commercial, 20 under development)
  • Expanding on-ground sales presence to USA and EU
  • Experienced in complex chemistries including cyanation, flow chemistry, nucleotides

Capex Update

  • Brownfield Capex - Atali Block 2: Estimated investment of INR 149 crores, estimated capacity ~405 KL, commercialization targeted by H2FY28, focused on CDMO/CMO
  • FY26 CAPEX: ~INR 400 Cr; FY27 outlook expected at similar levels
  • Initiating R&D investment in FY27 towards TIDES (Peptides & Oligonucleotides)

Future Outlook

  • Targeting 15-18% Revenue & EBITDA CAGR over the next 3-4 years
  • Geographical sales split (H1-FY27): International 52%, Domestic 48%
  • Xanthine derivatives sales split: Beverages 67%, Pharmaceutical 33%

Balance Sheet Position (H1-FY27 Standalone)

  • Total Assets: INR 36,663 Mn
  • Property, plant and equipment: INR 14,092 Mn
  • Capital work-in-progress: INR 3,082 Mn
  • Inventories: INR 7,882 Mn
  • Trade receivables: INR 6,951 Mn
  • Total Equity: INR 21,032 Mn
  • Borrowings (current + non-current): INR 8,364 Mn
  • Trade Payables: INR 3,567 Mn

Consolidated Financial Performance

  • Q2-FY27 Consolidated PAT: INR 715 Mn, up 248.8% YoY
  • H1-FY27 Consolidated PAT: INR 1,476 Mn, up 121.6% YoY
  • The company noted that from April 1, 2025, Ganesh Polychem Limited became a joint venture, making current period numbers not comparable with previous periods

Investor Contact

Mr. Anuj Sonpal of Valorem Advisors is listed as the Investor Relations representative with contact details provided.