Conference Call with Aarti Drugs Management and Analysts on Q1FY25 Performance and Outlook. Listen to the full earnings transcript.
Pharmaceuticals company Aarti Drugs announced Q1FY25 results: Consolidated: Revenue stood at Rs 556.5 crore as against Rs 661.7 crore, a decline of 15.9% YoY EBITDA stood at Rs 66.1 crore as against Rs 84.7 crore, a decline of 22.0% YoY. EBITDA Margin (%) stood at 11.9% PAT stood at Rs 33.3 crore as against Rs 48.0 crore, a decline of 30.6% YoY. PAT Margin (%) stood at 6.0% Standalone: Revenue stood at Rs 493.1 crore as against Rs 592.3 crore, down by 16.8% YoY Standalone business contributed ~87% to the consolidated revenue for the quarter ~69% of the revenues came from the domestic market and ~31% from the exports market Domestic revenue down ~16% while exports down ~18% YoY Within the API business, the antibiotic therapeutic category contributed ~43%, anti-diabetic ~14%, anti-protozoal ~18%, anti-inflammatory ~9%, antifungal ~10% and the rest contributed ~6% to total API sales Commenting on the same, Adhish Patil, CFO & COO, Aarti Drugs Limited said, “During the quarter gone by, there has been a drop in revenues and profitability mainly due to lower realizations stemming from negative rate variance and subdued market demand in APIs business. Relatively lower capacity utilization for the quarter weighed negatively on the EBITDA margins. Going ahead in FY25, we anticipate an improvement in margins, mostly driven by an anticipated growth in export sales and backward integration. Formulation segment’s revenue stood at Rs 70.4 crore for the quarter, a growth of 4.2% Q-o-Q. In the last quarter, we commenced our facility for dermatology products in Tarapur. We faced teething issues on the same which led to increased costs of ~Rs. 6 crore in the quarter. We expect to ramp up the production of this facility in Sep’24 and Dec’24 quarters progressively. The greenfield project at Gujarat Sayakha for Speciality Chemicals is on track which we plan to commence by end of Q2 FY25. With this, the operating leverage is expected to kick in from the second half of the year with improved capacity utilization. During Q1FY25, the Company incurred Capex of Rs 52 crore mainly towards capacity expansion, backward integration and new product launches. We anticipate a total Capex of ~Rs. 200 crore for the full year. This Capex would we mainly through internal accruals and partly through term loans. In June 2024, a fire occurred at N-198 unit which manufactures certain API products for external customers. Production operation of the said unit had been temporarily disrupted which began operationsin July 2024. The unit has adequate insurance coverage for the same. The Pharma API manufacturing industry is constantly evolving, and we are committed to staying ahead of the curve. We continue to expand our capabilities and enhance our offerings to meet the ever-changing needs of our customers. We also plan to invest in new technologies and equipment that will help us streamline our processes and improve efficiency.” Result PDF