Raw material cost inflation from West Asia tensions
Geopolitical tensions have caused significant increases in raw material and logistics costs, impacting margins, especially in the API segment where cost pass-through is difficult.
AARTIPHARM / Q4-FY26 / risks
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Aarti Pharmalabs · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
high
Inability to pass on cost increases in API/intermediates
Management noted that existing orders in the API segment cannot be repriced, and future price increases depend on competitive dynamics.
Lumpy CDMO revenue and working capital strain
CDMO revenue is lumpy due to project-based deliveries, and large customer orders require significant inventory financing without advances.
Forex volatility impact on profitability
A ₹33 crore forex loss in FY26 (including on foreign currency loans) highlights exposure to currency fluctuations, with potential for further hits.