Conference Call with Aarti Industries Management and Analysts on Q3FY22 Performance and Outlook. Listen to the full earnings transcript.
Specialty Chemicals company Aarti Industries declares Q3FY22 result: Revenue expansion during the quarter includes cost escalations passed on to the customers due to substantial increase in raw material prices as well as fuel and logistics costs. Accrual of termination fees in respect of the long-term contract of Rs 631 crores resulting higher revenues. As a result, EBIDTA includes Rs 611 crs (net of expenses/currency m2m in relation to the termination fees) during the quarter. Absolute YoY growth of 25% in EBITDA (excluding the impact of accrual of termination fees) reflects the ability to substantially pass-on input price increase to the customer. EBIDTA and profitability (excluding termination fees) at all time highs. Key projects such as Project for the second long-term supply contract and pharma API/intermediate expansion projects nearing final stages and expected to commercialised in Q4 FY22. Macro factors indicate positive traction to continue in the near to mid-term Commenting on the performance for Q3 FY22, Mr. Rajendra Gogri – Chairman & MD at Aarti Industries Limited said: “During Q3, our core EBITDA of Rs. 356 crore is once again the highest in our operating history, demonstrating the ability of the business to maintain margins by passing on to customers the substantial input cost inflation experienced during the reported period. Our current operating trajectory also suggests resumption of growth momentum in FY22 following a period of slower expansion in the previous two years due to the impact of a tough macro environment. We remain focused on addressing the large opportunity arising from import substitution and supply chain diversification by global majors. Our established position as a partner of choice across an ever-increasing number of engagements is driving scale. We are also investing in product diversification, capacity expansion/upgradation in both speciality chemicals and pharmaceuticals as well as building out internal capabilities on quality, safety, health and environment and an expanded R&D; pipeline. We believe this augmented organizational framework positions us strongly to capture strategic growth opportunities. This will be supported by the expanded pipeline of operationalized projects that are currently underway, providing clear visibility to the business over the next several years. As India emerges as an increasingly significant global chemicals supply destination, backed by a supportive regulatory framework instituted by the government, our capex commitments driven by a wellcapitalized balance sheet, will allow the pursuit of aggressive growth in line with our business blueprint. Our plan to create individually focused businesses in our two core verticals will further enhance value for all our stakeholders.” Result PDF