Aarey Drugs & Pharmaceuticals Q4 FY26: Other Income ₹6.1 Cr, Net Profit ₹3.97 Cr — the Non-Core Is Now the Core
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1 — At a Glance
Aarey Drugs & Pharmaceuticals turned over ₹472 crore in FY26 and kept ₹3.97 crore of it as net profit — a company that moves half a billion rupees of goods and retains less than one percent. The March quarter was loud: sales of ₹189 crore, up 75% year-on-year, with a net profit of ₹1.56 crore against ₹0.47 crore a year earlier. Underneath the headline sits a quieter fact — other income for the full year was ₹6.10 crore, larger than the ₹3.97 crore that actually reached the bottom line. The operating business, stripped of that other income, contributed less to profit before tax than the non-operating line did.
Around those numbers, the record thickens. In May 2026 the company’s ₹65.94 crore of bank facilities were downgraded to ACUITE BB+ and flagged “Issuer Not Cooperating.” The FY26 secretarial compliance report lists nine separate SEBI non-compliances. Promoter holding has slid from 50% to 37.71% over roughly two years. The audit opinion, for what it’s worth, is unmodified.
A ₹249 crore company whose earnings lean on the income line that isn’t the business, priced at 63x. The rest of this entry lays out the pieces.
2 — Introduction
Incorporated in 1990, Aarey Drugs & Pharmaceuticals is a Mumbai-based manufacturer of active pharmaceutical ingredients, intermediates, and specialty chemicals, with a parallel trade in industrial solvents and chemicals. It runs a single reportable segment — manufacturing and trading of drugs and pharmaceuticals — from a plant at Tarapur, Boisar.
The recent corporate history is mostly capital-raising and compliance. In May 2025 the board allotted 50 lakh convertible warrants on a preferential basis at ₹63.80 each, aggregating ₹31.90 crore, of which ₹7.98 crore (25%) was received at allotment and the balance ₹23.93 crore falls due on conversion. The FY26 audited standalone results were approved on 30 May 2026 with an unmodified audit opinion.
Two threads run alongside the operating story: a credit-rating downgrade in May 2026, and a secretarial compliance report cataloguing a series of disclosure lapses. Both are addressed in their own sections. The financials themselves — flat revenue, thin margins, other income doing heavy lifting — are the spine.
3 — Business Model: WTF Do They Even Do?
Two businesses share one roof. The first makes bulk drugs — N-Methyl Urea, Mefenamic acid, Doxofylline, Lumefantrine, Nimesulide, Albendazole, Carbamazepine, Oxcarbazepine — the unglamorous molecular plumbing that formulation companies buy by the drum. The second trades industrial chemicals and solvents: aromatics, chlor-alkali, glycols, ketones, oleochemicals, and a long tail of intermediates. The company sells to pharmaceutical formulators and merchant exporters, with FY23 revenue split roughly 99% sale of goods and 1% commission.
The model’s tell is in the arithmetic. On ₹472 crore of FY26 sales, cost of materials consumed was ₹450 crore — the raw-material line eats about 95 paise of every sales rupee. That is the signature of a trading-heavy, low-value-add operation: high throughput, wafer-thin spread. The API manufacturing is the value story on paper; the solvent trading is what fills the revenue line.
For a firm founded in 1990, the business has stayed remarkably close to where it started. The About text still lists backward and forward integration into DMA-HCL, ortho chloro benzoic acid, and further APIs like theophylline as intentions rather than accomplishments.
Does a 95%-material-cost structure leave room for a margin, or does it just leave room for volume?
4 — Financials Overview
Figures are consolidated, in ₹ crore.
Metric
Latest Q (Mar 2026)
YoY (Mar 2025)
QoQ (Dec 2025)
Revenue
189.47
108.10
96.43
Operating Profit
4.34
-4.21
-1.51
PAT
1.56
0.47
0.57
EPS (₹)
0.55
0.17
0.20
The March quarter is where this company books its year: ₹189 crore of the ₹472 crore annual total landed in Q4. Operating profit swung from negative ₹4.21 crore a year ago to positive ₹4.34 crore, and from negative ₹1.51 crore the prior quarter. Net profit tripled year-on-year off a small base.
Zoom to the full year and the motion flattens: FY26 sales of ₹472.27 crore against FY25’s ₹473.93 crore, and PAT of ₹3.97 crore against ₹4.02 crore. A
