Aarti Pharma Q1 FY27 Results (NSE: AARTIPHARM)
Signal: Margin expansion
The read
The key inflection is the rebound in consolidated EBITDA margin to 25.5% from 19.0% QoQ and PAT to ₹7614.27 lakh (+65.4% YoY), but the trajectory is not yet fully clean because revenue declined 8.0% QoQ, finance cost was up 89.5% YoY, and ₹740.55 lakh of joint-venture profit supplied a material portion of the consolidated-versus-standalone uplift.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹535.8 Cr | +38.7% | -8.0% |
| EBIT | ₹106.53 Cr | N/A | |
| Net profit | ₹76.14 Cr | +65.4% | |
| EPS | ₹8.4 | +65.4% | |
| EBIT margin | 25.5% |
P&L walk
Consolidated revenue was ₹53579.69 lakh, up 38.7% YoY, while EBITDA margin improved to 25.5% from 24.0% in Q1FY26 and 19.0% in Q4FY26; PAT rose 65.4% to ₹7614.27 lakh, with ₹740.55 lakh of joint-venture profit providing a material uplift over standalone earnings.
Segments
The filing reports only one Pharmaceuticals segment, but consolidation materially lifted earnings: the joint venture contributed ₹740.55 lakh of profit versus a ₹179.61 lakh loss YoY, while Aarti USA Inc. reported a ₹24.67 lakh loss.
Key positives
- Consolidated revenue reached ₹53579.69 lakh, up 38.7% YoY, while EBITDA margin expanded to 25.5% from 24.0% YoY and 19.0% QoQ.
- Consolidated PAT increased 65.4% YoY to ₹7614.27 lakh and EPS rose 65.4% to ₹8.40, with no material dilution indicated by the paid-up share capital movement.
- The joint venture turned from a ₹179.61 lakh loss YoY to a ₹740.55 lakh profit, adding ₹920.16 lakh of year-on-year pre-tax earnings support.
- The company approved 405 Kl of new capacity with Rs. 149 Crores of capex over one year to serve intermediate and CDMO customers.
Key concerns
- Revenue declined 8.0% QoQ to ₹53579.69 lakh despite the margin recovery, so the durability of the rebound still requires confirmation.
- Finance costs increased 89.5% YoY to ₹1287.51 lakh, creating a drag as the company plans to fund the Rs. 149 Crores expansion partly through borrowings.
- Standalone gross margin compressed 151bps YoY to 55.7%; although raw-material cost fell to 47.7% of revenue from 51.4%, the filing does not disclose the reason for the gross-margin decline.
- Consolidated PAT of ₹7614.27 lakh exceeded standalone PAT of ₹7130.66 lakh largely because of the ₹740.55 lakh joint-venture contribution, while Aarti USA Inc. reported a ₹24.67 lakh loss.
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