Aarti Drugs Ltd Share Price – NSE  /  BSE

Pharmaceuticals, Small Cap

Aarti Drugs announced that on 17 June 2024, at around 2:30 pm IST, fire occurred at N-198 unit located at Tarapur, Maharashtra. Particular unit manufactures certain Active Pharmaceutical Ingredients (API) products for external customers.

The fire was brought under control immediately, however production operation of the said unit has been temporarily disrupted. There is no loss of life or injuries reported. Adequate steps are being undertaken to restore the operation of the unit.

The unit has adequate insurance coverage and intimation to Insurance Company has already been made.

The Company projects no material impact on the financials and operations of business.

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Revenue from operations dropped 16.48% to Rs 619.99 crore in Q4 FY24 as compared with Rs 742.41 crore posted same period a year ago.

Profit before tax increased 3.76% to Rs 64.18 crore in the fourth quarter of FY24 as against Rs 73.28 crore recorded in the fourth quarter of FY23.

EBITDA stood at Rs 86.9 crore in Q4 FY24, down 8% as compared with Rs 94.4 crore in Q4 FY23. EBITDA Margin improved by 130 bps to 14% in Q4 FY24 as against with 12.7% posted in Q4 FY23.

During the quarter, revenue from API segment declined 20.6% YoY to Rs 501.3 crore, specialty chemicals fell 16.5% YoY to Rs 33 crore while formulation business increased 19% YoY to Rs 67.6 crore and intermediaries & others climbed 21.8% YoY to Rs 18.2 crore while in Q4 FY24.

On standalone basis, the company’s net profit declined 32.02% to Rs 36.14 crore in Q4 FY24 as compared with Rs 53.17 crore in Q4 FY23. Revenue stood at Rs 559.53 crore as against Rs 696.41 crore, a decline of 19.65% YoY. The standalone business contributed approximately 89% to the consolidated revenue for the quarter.

Around 65% of the revenues came from the domestic market and 35% from the exports market for Q4 FY24 for a standalone business.

Within the API business, the antibiotic therapeutic category contributed around 45%, anti-diabetic approximately 15%, anti-protozoal around 17%, anti-inflammatory approximately 11%, antifungal around 9% and the rest contributed approximately 3% to total API sales for Q4 FY24.

Meanwhile, the company’s board has declared an interim dividend of Rs 1 per equity share for the financial year 2023-24. The record date has been fixed for the purpose of payment of interim dividend is 6 February 2024.

Adhish Patil, CFO & COO, Aarti Drugs, said, “We are pleased with our financial and operational performance in FY24 amid geopolitical uncertainties and macroeconomic factors and price volatilities. The company demonstrated resilient performance in FY24, where topline declined by 7% YoY during full year FY24, attributed to lower realizations stemming from negative rate variance and subdued export market demand in APIs business. However, there has been a notable improvement in gross margins, credited to the stabilization of input costs in latter half of FY24 and operational efficiencies across the majority of our product lines.

Furthermore, we anticipate a further enhancement in gross margins in future, mostly driven by upturn in selling price levels and an anticipated growth in export sales. EBITDA Margin for FY24 improved by 140 basis points and PAT margins improved by 70 basis points due to improved gross contributions in standalone as well as formulation business along with efficient working capital management.

For Q4 FY24, the company’s performance improved considerably on a sequential basis due to ease in the input costs and better product mix. On a sequential basis, the EBITDA margins improved by 220 bps due to operating leverage driven by improved capacity utilization.

Amidst heightened interest rates, dollar shortages, destocking, supply chain hurdles, and conservative ordering, export demand encountered challenges in select regions during Q4 and FY24. Nonetheless, we anticipate a positive shift in the export landscape in the near future, on back of interest rate reductions, low stock levels and an upswing in demand. Despite these hurdles, our outlook remains optimistic, on attaining our growth and margin targets.

Formulation segment’s revenue stood at Rs. 67.6 crore in Q4 FY24, a growth of 19% YoY with exports contribution of 62%. In FY24 revenues stood at Rs 324.6 crore, with growth of 18.5% YoY.

In the Specialty Chemical industry, although India's domestic chemicals demand is projected to remain robust in 2024, with low expectations in price increase. The market faces various challenges of finding equilibrium amidst the introduction of new production capacities within the country, shifting trade dynamics, subdued global demand, and fluctuating upstream prices.

The company has incurred a capex of Rs 543 crore in the last 3 years, mainly towards capacity expansion, backward integration and new product launches across API & Formulation segment. The majority of the company’s Rs 600 crore capex has been completed and balance is expected to be completed soon. These initiatives are expected to reduce the costs along with expansion in the profit margins and the topline growth.”

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.

The scrip rose 0.26% to settle at Rs 501.35 on Friday, 3 May 2024.

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Net profit of Aarti Drugs declined 15.55% to Rs 47.37 crore in the quarter ended March 2024 as against Rs 56.09 crore during the previous quarter ended March 2023. Sales declined 16.49% to Rs 619.99 crore in the quarter ended March 2024 as against Rs 742.41 crore during the previous quarter ended March 2023.

For the full year,net profit rose 3.07% to Rs 171.42 crore in the year ended March 2024 as against Rs 166.31 crore during the previous year ended March 2023. Sales declined 6.90% to Rs 2528.58 crore in the year ended March 2024 as against Rs 2716.05 crore during the previous year ended March 2023.

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Net profit of Aarti Drugs declined 32.03% to Rs 36.14 crore in the quarter ended March 2024 as against Rs 53.17 crore during the previous quarter ended March 2023. Sales declined 19.66% to Rs 559.53 crore in the quarter ended March 2024 as against Rs 696.41 crore during the previous quarter ended March 2023.

For the full year,net profit declined 7.15% to Rs 141.88 crore in the year ended March 2024 as against Rs 152.81 crore during the previous year ended March 2023. Sales declined 9.25% to Rs 2266.91 crore in the year ended March 2024 as against Rs 2497.97 crore during the previous year ended March 2023.

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