Aarti Drugs Ltd - Q2 & H1 FY26 Business & Financial Performance

Aarti Drugs Limited (Aarti Drugs) (NSE: AARTIDRUGS; BSE:524348), a Mumbai based diversified and fully integrated pharmaceutical company, with interests in Active Pharmaceutical Ingredients (API), Formulation, Specialty Chemicals and Intermediates announced its unaudited financial results for the quarter and half year ended 30th September 2025.

Consolidated Financial Highlights - Q2 FY26

- Revenue stood at Rs. 652.9 crore as compared to Rs. 599.8 crore in Q2 FY25, reflecting a growth of 9% YoY, driven by favourable export volumes

- EBITDA stood at Rs. 84.4 crore versus Rs. 68.5 crore in Q2 FY25, up 23% YoY, with EBITDA margin at 12.9% versus 11.4% in Q2 FY25, an expansion of 150 basis points

- PAT stood at Rs. 45.2 crore as compared to Rs. 35.0 crore in Q2 FY25, up 29% YoY, translating to a PAT margin of 6.9% versus 5.8% last year, an improvement of 110 basis points

Consolidated Financial Highlights - H1 FY26

- Revenue stood at Rs. 1,243.7 crore as compared to Rs. 1,156.3 crore in H1 FY25, reflecting a growth of 8% YoY

- EBITDA stood at Rs. 158.8 crore versus Rs. 134.6 crore in H1 FY25, up 18% YoY, with EBITDA margin at 12.8% versus 11.6% in H1 FY25, an expansion of 120 basis points

- PAT stood at Rs. 99.1 crore as compared to Rs. 68.3 crore in Q2 FY25, up 45% YoY, translating to a PAT margin of 8.0% versus 5.9% last year, an improvement of 210 basis points

Standalone Business Highlights - Q2 FY26

- Revenue stood at Rs. 578.9 crores vs. Rs. 543.1 crores in Q2 FY25, growth by 7% YoY
- Standalone business contributed 89% to the consolidated revenue
- 58% of the standalone revenue came from the domestic market and 42% from the exports market
- Domestic revenue was down 7% YoY and export revenue increased by 33% YoY
- Within the API business, the anti-biotic therapeutic category contributed 36.1%, anti-diabetic 15.3%, anti-protozoal 18.8%, anti-inflammatory 11.8%, antifungal 11.7% and the rest contributed 6.4% to total API sales

Formulation Segment Highlights

- Revenue from formulations stood at Rs. 82.4 crore in Q2 FY26, compared to Rs. 65.6 crore in Q2 FY25, up 26% YoY. Exports contributed 68% to this revenue

- For H1 FY26, formulation revenue was Rs. 162.8 crore compared to Rs. 136.6 crore in H1 FY25, up 19%, with exports accounting for 63% of total formulation sales

Commenting on the same, Mr. Adhish Patil, CFO & COO, Aarti Drugs Limited said, "We are pleased with the operational progress achieved during the quarter. Aarti Drugs posted revenue of Rs. 652.9 crore in Q2 FY26, growing 9% year-on-year, with EBITDA of Rs. 84.4 crore, up 23%, with margin at 12.9%. For H1 FY26, revenue was Rs. 1,243.7 crore, up 8% year-on-year, with EBITDA of Rs. 158.8 crore, up 18% with margin at 12.8%. The capex incurred during Q2 FY26 was Rs. ~45.6 crore. Overall, our Q2 results reflect the benefit of favorable export mix and disciplined execution.

Q2 FY26 marked continued progress on our strategic priorities of backward integration, capacity expansion, and strengthening cost competitiveness, even as the broader industry witnessed soti domestic demand trends-particularly in the antibiotics category. Export demand, however, remained robust, offseting the weakness in the domestic market and contributing to improvement in our overall margins.

The commissioning of our Sayakha amines facility in September 2025 marks a pivotal step in backward integration, enhancing raw material security and margin resilience. Around 40-50% of captive requirements of Metiormin are now being met internally from this plant and is expected to scale up to fullfill the entire captive demand over the next 6-12 months.

Our salicylic acid operations at Tarapur are stabilizing well with near-term output of around 300 tonnes per month and targeting 500 tonnes per month for Q4 FY26. This vertical will feed another 400 tonnes per month salicylates line, delivering downstream integration, beter overhead absorption and improved margin stability. These capacity additions aim to convert import dependence into domestic supply, and with the downstream salicylates line under implementation, this segment will become a key value driver in the coming years.

Aarti Drugs also continues to deepen its global presence with several EU and USFDA certifications obtained and some under-implementation for key products from large-scale plants. These approvals will enable export of higher-value APIs and formulations to regulated markets and from our lower-cost facilities.

With operating cash flows strengthening and capex largely behind us, the focus now shitis toward scaling utilization and converting our new assets into steady earnings contributors. Over FY27-FY29, we expect the combined contribution to drive sustainable margin expansion and value creation."

Shares of Aarti Drugs Limited was last trading in BSE at Rs. 491.15 as compared to the previous close of Rs. 489.15. The total number of shares traded during the day was 16139 in over 948 trades.

The stock hit an intraday high of Rs. 500.90 and intraday low of 480.00. The net turnover during the day was Rs. 7905327.00.

Source : Equity Bulls

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AartiDrugs INE767A01016 Pharmaceuticals Q2FY26 H1FY26 ResultUpdate