Aarti Drugs Ltd.

NSE: AARTIDRUGS | BSE: 524348 | ISIN: INE767A01016 | Industry: Pharmaceuticals
| Expensive Performer

Rapid Results Alerts
Aarti Drugs Ltd.    
27 Jul 2022
461.35
-1.77%

Pharmaceuticals firm Aarti Drugs Announced Q1FY23 Result :

  • Revenue stood at Rs 622.3 crores as against Rs 581.6 crores, a growth of 7% YoY.
  • EBITDA stood at Rs 67.4 crores as against Rs 81.3 crores YoY. EBITDA Margin (%) came in at 10.8%.
  • PAT stood at Rs 34.8 crores as against Rs 48.8 crores YoY. PAT Margin (%) stood at 5.6%.
  • Standalone Q1FY23 revenue stood at Rs 551.4 crores as against Rs 507.4 crores, a growth of 9% YoY.
  • The standalone business contributed ~86% to the consolidated revenue for the quarter.
  • ~64% of the revenues came from the domestic market and 36% from the exports market for Q1FY23 for a standalone business.
  • Domestic revenue grew approximately by 3% while exports grew by around 23% year-on-year for Q1FY23.
  • Within the API business, the antibiotic therapeutic category contributed ~46%, anti-diabetic ~13%, anti-protozoal ~19%, anti-inflammatory ~10%, antifungal ~9% and the rest contributed ~4% to total API sales for Q1FY23.

Commenting on the results Mr. Adhish Patil, Chief Financial Officer – Aarti Drugs Limited said, “The company’s performance specifically for this quarter was marred by geopolitical uncertainties, sharp downward currency movement and sustained inflationary environment. The company posted revenue growth of ~7% YoY in Q1FY23, which was primarily driven by higher realizations in Antibiotics, Antiprotozoals and Specialty Chemicals, Intermediates & Others. Growth in API business remained below expectation primarily due to inventory recalibration at the customer’s level owing to high API prices. Margins and profitability continued to remain affected as inflationary pressure weighed on raw materials, power and fuel costs, coupled with sharp depreciation in the currency. The company has undertaken multiple price hikes in the recent past to mitigate this impact. As a result, the company witnessed the highest ever realisations for most of its API products in Q1FY23. The company expects normalised margin levels once the input price volatility stabilises, which is expected from H2FY23.

Formulation segment revenue stood at Rs 85.0 crores for the quarter, a marginal de-growth of 2% YoY. The formulation segment contributed ~14% to the consolidated revenue for the quarter. Exports continued to remain a key focus area for the formulation segment. ~56% of the revenue came from exports during the quarter.

The capex for Q1FY23 stood at Rs 35 crores and is expected to be in the range of Rs 250-350 crores for the entire FY23. The civil construction activity for Gujarat capex remains well on track, however heavy monsoons have slowed Civil work temporarily. Tarapur specialty chemicals brownfield capacity which had taken scale-up batches in the last quarter has now been ramped up and optimization of the process is ongoing. It might take little more than a couple of months to contribute meaningfully. For Tarapur greenfield API facility, Boiler and ZLD treatment plants have been operationalized from May 2022 and commissioning of plant is expected by the end of FY23.

Looking beyond the short-term challenges, we remain sanguine about the opportunities both in API and non-API business. The growth trajectory is expected to be healthy for all the segments in the upcoming years driven by the projects and higher utilization of existing capacities. The pace of growth in exports is expected to continue in the formulation business.”

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