Aarti Drugs Q2FY26 Concall Decoded: “Margins Get Their Medicine — Growth Tastes Bitter, Profits Sweet”
1. Opening Hook
If there’s one pharma stock that’s learning the art of dosage control, it’s Aarti Drugs. After two years of antibiotic indigestion and price fever, the company’s FY26 prescription finally seems to be working — revenue grew 9% YoY, EBITDA jumped 23%, and PAT shot up 29%. All this while domestic antibiotics stayed sluggish and exports did the heavy lifting. Management sounded optimistic but measured — like a doctor who knows the recovery’s real but doesn’t want to jinx it. Stick around, because this concall wasn’t just about antibiotics. It was about amines, salicylic acid, and some serious chemistry with margins. 💊
2. At a Glance
Revenue up 9%: Export demand saved the day while India hit snooze.
EBITDA up 23%: Margin booster shot from Sayakha’s new amine plant.
PAT up 29%: Profits found their pulse again.
Debt down ₹41 Cr: CFO’s blood pressure also down, reportedly.
EBITDA Margin 12.9%: From 11.4% last year — steady recovery.
CAPEX ₹45.6 Cr this quarter: Expansion fever continues, no vaccine for that.
3. Management’s Key Commentary
“Our Sayakha facility commenced operations and achieved initial benchmarks.” (Translation: The new plant’s alive, it’s running, and thankfully hasn’t exploded yet 😏.)
“40-50% of our methylamine needs are met internally; 100% by FY26-end.” (Translation: One step closer to chemical self-dependence — goodbye suppliers, hello margins.)
“Salicylic acid plant ramping up; EBITDA-positive at 800 tons per month.” (Translation: Still in the loss zone, but optimism per ton is high.)
“EBITDA margin expanded 150 bps YoY.” (Translation: Finally, the spreadsheet looks healthier than the patient.)
“We are targeting 15%-16% consolidated EBITDA margins in the medium term.” (Translation: Post-COVID dreams are still alive — no booster required yet.)
“There was an HCL gas leak at Tarapur; no casualties.” (Translation: Minor chemistry accident, but don’t short the stock — operations normal.)
“Debt-to-equity ratio at 0.39.” (Translation: We’re still geared, but not gasping.)
