Aarti Drugs Ltd Share Price – NSE /  BSE

Pharmaceuticals, Small Cap

Aarti Drugs has received reaffirmation in credit rating at ICRA AA-; Stable/ ICRA A1+ for bank facilities aggregating Rs 1452.8 crore.

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Revenue from operations declined 6.44% to Rs 568.50 crore in third quarter of FY25 as compared with Rs 607.61 crore posted same period a year ago.

Profit before tax shed 1.53% to Rs 50.76 crore in the third quarter of FY25 as against Rs 51.55 crore recorded in the same quarter last year.

EBITDA stood at Rs 62.3 crore in Q3 of FY25, down 13% from Rs 71.8 crore posted in the December 2023 quarter. EBITDA Margin to 11.2% in Q3 FY25 as against with 11.8% posted in Q3 FY24.

During the quarter, revenue from API segment declined 5.2% YoY to Rs 460 crore, formulation business dropped 39.4% YoY to Rs 48 crore while specialty chemicals increased 7.6% YoY to Rs 33.8 crore and intermediaries & others jumped 46.3% YoY to Rs 14.8 crore while in Q3 FY25.

On standalone basis, the company’s net profit increased 21.85% to Rs 38.53 crore in Q3 FY25 as compared with Rs 31.62 crore in Q3 FY24. Revenue stood at Rs 525.91 crore in December 2024 quartre, down 2.58% YoY. The standalone business contributed approximately 91% to the consolidated revenue for the quarter.

Around 64% of the revenues came from the domestic market and 36% from the exports market for third quarter of FY25 for a standalone business.

Within the API business, the antibiotic therapeutic category contributed around 38.6%, anti-diabetic approximately 16.1%, anti-protozoal around 16.5%, anti-inflammatory approximately 11.9%, antifungal around 12% and the rest contributed approximately 5% to total API sales for Q3 FY25.

Meanwhile, the company’s board has declared an interim dividend of Re 1 per equity share for the financial year 2023-24. The record date for the purpose of payment of interim dividend has been fixed as 4 February 2025.

Adhish Patil, CFO & COO, Aarti Drugs, said, “This quarter has presented significant challenges for our API segment, with both revenue and profit declining on a year-on-year basis. This is mainly due to reduced market prices and weaker demand. Although prices remained stable during the December quarter, there was a negative price variance when compared to the same period last year.

Formulation segment revenue stood at Rs. 48.6 crores for the quarter, with an export contribution of 47% whereas in 9M FY25 revenue stood at Rs 186.9 crores.

The greenfield project at Sayakha, Gujarat for Speciality Chemicals will commence trial production in this quarter. With this, the operating leverage is expected to kick in from the subsequent quarter with improved capacity utilization. There had been certain teething issues in Tarapur greenfield project, which are sorted now and we expect to ramp up the production to 500+ tonnes per month by the end of March’25. In total we will have sequential ramp up of capacity to 1,600 tonnes per month by end of FY26.

During 9M FY25, the company has incurred capex of approximately Rs 136 crore mainly towards capacity expansion, backward integration and new product launches. We anticipate a total capex of around Rs 200 crore for the full year. This capex would we mainly through internal accruals and partly through term loans.

Despite facing these short-term challenges, we are staying focused on our long-term goals. We are confident about achieving double digit growth in revenues with EBITDA Margins of 13%-14% in FY26 which is a healthy indicator of our financial stability and operational efficiency.

Despite API pricing pressures, driven by fluctuating raw material costs, heightened competition, and regulatory demands in global markets we remain committed to achieving growth and profitability by enhancing operational efficiencies and expanding our market presence. We are dedicated to tackling these challenges and emerging stronger in the future.”

Meanwhile, the board of directors also approved an investment in equity shares of Pinnacle Life Science, wholly owned subsidiary of Aarti Drugs, upto an aggregate value of Rs 25 crore, by way of subscription to the rights issue. The investment proceeds will be used by Pinnacle for financing the cost towards expansion/capex plan and other general corporate purpose.

Aarti Drugs forms part of $6 Billion Aarti Group of Industries with robust R&D Division at Tarapur, Maharashtra Industrial Development Corporation (MIDC) in close vicinity to manufacturing locations. The company is engaged in the manufacturing of Active Pharmaceutical Ingredients (APIs), Pharma Intermediates, Speciality Chemicals and produces Formulations with its whollyowned subsidiary-Pinnacle Life Science Private.

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Aarti Drugs has fixed 04 February 2025 as record date for purpose of interim dividend of Re 1 per equity share of Rs 10 each for FY 2024-25.

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Net profit of Aarti Drugs rose 1.04% to Rs 37.05 crore in the quarter ended December 2024 as against Rs 36.67 crore during the previous quarter ended December 2023. Sales declined 8.14% to Rs 556.60 crore in the quarter ended December 2024 as against Rs 605.94 crore during the previous quarter ended December 2023.

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