Pharmaceuticals company Aarti Drugs announced consolidated Q4FY24 & FY24 results: Q4FY24 Financial Highlights: Revenue stood at Rs 621.1 crore as against Rs 743.3 crore, a decline of 16.4% YoY EBITDA stood at Rs 86.9 crore as against Rs 94.4 crore YoY. EBITDA Margin (%) came in at 14.0% PAT stood at Rs 47.3 crore as against Rs 56.2 crore YoY. PAT Margin (%) stood at 7.6% FY24 Financial Highlights: Revenue stood at Rs 2,532.6 crore as against Rs 2,718.2 crore, a decline of 6.8% YoY EBITDA stood at Rs 320.5 crore as against Rs 307.8 crore YoY. EBITDA Margin (%) came in at 12.7% PAT stood at Rs 171.6 crore as against Rs 166.4 crore YoY. PAT Margin (%) stood at 6.8% Commenting on the same, Adhish Patil, CFO & COO, Aarti Drugs said, “We are pleased with our financial and operational performance in FY24 amid geopolitical uncertainties and macroeconomic factors and price volatilities. The company demonstrated resilient performance in FY24, where topline declined by 7% YoY during full year FY24, attributed to lower realizations stemming from negative rate variance and subdued export market demand in APIs business. However, there has been a notable improvement in gross margins, credited to the stabilization of input costs in latter half of FY24 and operational efficiencies across the majority of our product lines. Furthermore, we anticipate a further enhancement in gross margins in future, mostly driven by upturn in selling price levels and an anticipated growth in export sales. EBITDA Margin for FY24 improved by ~140 basis points and PAT margins improved by ~70 basis points due to improved gross contributions in standalone as well as formulation business along with efficient working capital management. For Q4FY24, the company’s performance improved considerably on a sequential basis due to ease in the input costs and better product mix. On a sequential basis, the EBITDA margins improved by ~220 bps due to operating leverage driven by improved capacity utilization. Amidst heightened interest rates, dollar shortages, destocking, supply chain hurdles, and conservative ordering, export demand encountered challenges in select regions during Q4 and FY24. Nonetheless, we anticipate a positive shift in the export landscape in the near future, on back of interest rate reductions, low stock levels and an upswing in demand. Despite these hurdles, our outlook remains optimistic, on attaining our growth and margin targets. Formulation segment’s revenue stood at Rs 67.6 crore for the quarter, a growth of 19% YoY with exports contribution of ~62%. In FY24 revenues stood at Rs 324.6 crore, with growth of 18.5% YoY In the Specialty Chemical industry, although India's domestic chemicals demand is projected to remain robust in 2024, with low expectations in price increase. The market faces various challenges of finding equilibrium amidst the introduction of new production capacities within the country, shifting trade dynamics, subdued global demand, and fluctuating upstream prices. The company’s balance sheet continued to remain healthy with leverage remaining comfortably at 0.44x. The capex for FY24 stood at ~Rs. 226 crore. Recently, Greenfield project at Tarapur Facility for dermatology products has been commenced and the ramp up is planned throughout H1 FY25. Greenfield Project at Gujarat Sayakha for Speciality Chemicals is on track which we plan to commence by end of Q1 FY25. With this, the operating leverage is expected to kick in from H2 FY25 with improved capacity utilization. The company has incurred a capex of ~ Rs 543 crore in the last 3 years, mainly towards capacity expansion, backward integration and new product launches across API & Formulation segment. The majority of the company’s ? 600 crore capex has been completed and balance is expected to be completed soon. These initiatives are expected to reduce the costs along with expansion in the profit margins and the topline growth. The Pharma API manufacturing industry is constantly evolving, and we are committed to staying ahead of the curve. In the upcoming year, we plan to continue expanding our capabilities and enhancing our offerings to meet the ever-changing needs of our customers. One of our key goals for the upcoming year is to improve our capacity utilisation, allowing us to better serve our growing customer base. We also plan to invest in new technologies and equipment that will help us streamline our processes, reduce carbon footprint and improve efficiency.” Result PDF
Conference Call with Aarti Drugs Management and Analysts on Q4FY24 Performance and Outlook. Listen to the full earnings transcript.
Conference Call with Aarti Drugs Management and Analysts on Q3FY24 Performance and Outlook. Listen to the full earnings transcript.
Conference Call with Aarti Drugs Management and Analysts on Q2FY24 Performance and Outlook. Listen to the full earnings transcript.
Pharmaceuticals company Aarti Drugs announced Q2FY24 & H1FY24 results: Consolidated Q2FY24: Revenue stood at Rs 642.2 crore as against Rs 687.8 crore, a decline of 6.6% YoY EBITDA stood at Rs 77.1 crore as against Rs 74.3 crore YoY. EBITDA Margin (%) came in at 12.0% PAT stood at Rs 39.6 crore as against Rs 38.7 crore YoY. PAT Margin (%) stood at 6.2% Consolidated H1FY24: Revenue stood at Rs 1,303.9 crore as against Rs 1,310.0 crore, a decline of 0.5% YoY EBITDA stood at Rs 161.8 crore as against Rs 141.7 crore YoY. EBITDA Margin (%) came in at 12.4% PAT stood at Rs 87.6 crore as against Rs 73.5 crore YoY. PAT Margin (%) stood at 6.7% Business Highlights: Standalone Q2FY24 revenue stood at Rs 577.5 crore as against Rs 624.8 crore, a decline of 7.6% YoY The standalone business contributed ~87% to the consolidated revenue for the quarter API volumes grew considerably at ~10%, led by secular growth across acute as well as chronic therapies ~67% of the revenues came from the domestic market and 33% from the exports market for Q2FY24 for a standalone business Domestic revenue grew by ~1.0% while exports declined by ~21.0% YoY for Q2FY24 Within the API business, the antibiotic therapeutic category contributed ~47%, anti-diabetic ~16%, anti-protozoal ~17%, anti-inflammatory ~10%, antifungal ~8% and the rest contributed ~2% to total API sales for Q2FY24 Q2FY24 revenue from formulation stood at Rs 86.6 crore as against Rs 82.5 crore, registering a growth of 5% YoY. ~49% of the revenue contribution is from exports during the quarter Commenting on the same, Adhish Patil, CFO & COO, Aarti Drugs said, “Despite the geopolitical uncertainties and macro-economic volatilities, the company was able to achieve ~10% volume growth YoY in APIs amid lower realisations, which impacted revenues in Q2FY24. In H1FY24, APIs revenue grew around ~1.0% YoY. However, we have witnessed improvement in margins, due to operational efficiencies and input cost stabilisation for the majority of our products. Moreover, export demand has been sluggish for some of the geographies for APIs in the H1FY24 on account of USD shortages, increased interest rates, and cautious spending by customers. The company witnessed a marginal increase in OPEX due to one-time buyback costs, Labour rates revision, and other expenses. Nevertheless, we are optimistic about attaining growth and margin goals. Formulation segment revenue stood at Rs 86.6 crore for the quarter, a growth of 5.0% YoY with exports contribution of ~49% whereas in H1FY24 revenue stood at Rs 176.5 crore, with a growth of 5.3% YoY. Specialty Chemical industry, globally, the demand visibility has been weak due to the absence of a couple of campaign-based products in H1FY24 which has impacted this segment. Moreover, there is some spillover of execution of campaign-based Specialty products into the next quarter. The capex for H1FY24 stood at ~Rs 109 crore and is expected to be in the range of Rs 250-300 crore for the full year FY24. We expect the Gujarat Sayakha Project, Tarapur Capex on Dermatology and Specialty Chemical to get completed by mid-H2FY24 which shall lead to improvement in margins once these projects are commissioned and capacity utilization is ramped up. Despite short-term challenges, we remain optimistic about the growth avenues for our API and non-API business. All our growth plans shall enable steady growth over the next few years, basis the completion of ongoing projects and better utilization of current capabilities. The pace of growth in exports is expected to continue in the formulation business.” Result PDF