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Revenue
₹602 Cr
verified against source
Revenue YoY
8.2%
reported change
EBITDA
₹56.3 Cr
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Aarti Drugs reported a mixed Q3 FY26 with consolidated revenue of ₹602.9 crore (+8% YoY) but EBITDA margin contracting to 9.3% (-180bps YoY) due to low capacity utilization, Chinese dumping, and a plant shutdown. PAT surged 58% YoY to ₹40.5 crore, aided by a low base and formulation export growth (+58% YoY). Management cited an inflection point with stabilizing realizations and January sales showing positive momentum. Guidance includes 12-15% volume growth in FY27, EBITDA margin recovery to 12-13% near-term, and 14-15% steady-state. Key risks: continued Chinese dumping in salicylic acid and slower-than-expected ramp-up of greenfield facilities.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects 12-15% volume growth in FY27, driven by new products (salicylic acid, methylamines) and single-digit growth in existing basket.
- Management targets EBITDA margin of 12-13% in the near term and 14-15% at steady state, driven by backward integration, export mix, and formulation ramp-up.
- Sikar facility expected to ramp to 50% utilization in Q4 FY26 and 75% in the subsequent quarter, with full utilization within 12 months.
- Management guided for annual capex of ₹150-200 crore over the next two years, including oncology product development, brownfield expansions, and energy improvements.
Risks flagged
- Chinese dumping persists, pressuring realizations. Management plans to file anti-dumping application by April 2026, but relief may take 6-8 months.
- Salicylic acid plant ramp-up slower than expected due to technology changes and quality parameter adjustments, delaying profitability.
- Weaker antibiotic demand reduced overall market pool, leading to lower capacity utilization and margin pressure. Management noted this as a key headwind.
- Analyst raised concern about continued high capex (₹150-200 Cr/year) while new plants are still scaling up. Management defended citing smooth Sikar ramp-up and need for oncology investment.
Key quotes
- After several quarters of pricing pressure, we believe the business has reached an inflection point supported by stabilizing realization and improving volume momentum.
- The main growth driver for the volumes would be the new products both salicylic acid and the cycles the methylamines.
- We will still maintain the stance that the prices have stabilized from September onwards. Just product specific variations are there little bit but more or less the prices have already stabilized.
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