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Revenue
₹432 Cr
verified against source
Revenue YoY
15.1%
reported change
EBITDA
₹103 Cr
latest reported figure
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record provenance
Actual signal trajectory
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What the record says.
Aarti Pharmalabs reported Q3 FY26 revenue of ₹5,425 crore, up 15% YoY, but EBITDA fell to ₹103 crore (down 10% YoY) and PAT dropped to ₹44 crore (down 41% YoY), reflecting margin compression. The decline was driven by startup hiccups at the Atali plant, softness in API/intermediate business, and delayed CDMO project deliveries. Management revised FY26 EBITDA guidance to flat/marginal growth, citing these headwinds. Positives include a strong CDMO pipeline (40 commercial projects), Zanthin capacity expansion (targeting 9,600 MT by Q1 FY27), and potential pricing tailwinds from China's rebate withdrawal. However, near-term risks remain: Atali stabilization may slip, API pricing pressure persists, and CDMO revenue concentration on a few molecules. The stock may remain range-bound until execution improves.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects FY26 EBITDA to be largely in line with last year with only marginal growth, revised down from earlier expectations due to Atali delays and API softness.
- Management is confident of meeting the CDMO revenue guidance for FY26, though exceeding the target is now difficult due to project delays.
- The Zanthin expansion is on track for mechanical completion by end of March 2026, with incremental capacity available from Q1 FY27.
- Startup hiccups at Atali are expected to be resolved by end of Q4 FY26, with corrective actions in place.
Risks flagged
- Startup hiccups at Atali have impacted production plans; resolution expected by Q4 but may slip further, delaying revenue ramp-up.
- API revenue declined YoY due to pricing pressure and slower customer off-take; recovery may take several quarters.
- 80% of CDMO sales come from 7-8 projects; failure of any key project could materially impact revenue.
- While China's rebate withdrawal could boost pricing, locked-in contracts may limit near-term realization.
Key quotes
- We are confident of meeting our CDMO revenue guidance for FI26. However, exceeding that target which was earlier possibility now looks difficult due to certain project deliveries getting pushed by a few months.
- API business continues to see some margin pressure while early indication of recovery are emerging.
- We are not commenting on specific molecule because of the CDA that we have with various customers.
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