Aarti Drugs Q4 FY26: ₹721 Cr revenue, EBITDA +72%

Q4 FY26 ends with a sharper sequential recovery

Aarti Drugs Limited reported its financial results for the quarter and year ended March 31, 2026, with a notable sequential improvement in the March quarter. Consolidated revenue in Q4 FY26 rose to INR 721.1 crore, up 6% year-on-year and 20% quarter-on-quarter. The company described FY26 as a transition year, with new capacities moving from commissioning to scale-up. Management also flagged geopolitical challenges that affected raw material availability and costs, including disruptions linked to the West Asia war. Despite these constraints, the quarter reflected a recovery in operating performance, helped by higher volumes and mix.

Key quarterly numbers: revenue up, profits stabilise sequentially

For Q4 FY26, EBITDA came in at INR 96.6 crore, a 72% quarter-on-quarter increase. EBITDA margin for the quarter stood at 13.4%, indicating improved operating leverage compared with the preceding quarter. Profit after tax (PAT) was INR 55.3 crore, down 12% year-on-year, but up 36% sequentially. PAT margin for Q4 FY26 was 7.7%, which the company positioned as a sign of stabilising operations after a volatile period for inputs. While year-on-year comparisons remained pressured at the profit line, the sequential move suggested that the worst impact of temporary disruptions may have eased during the quarter.

Formulations drive growth, with exports supporting momentum

A key contributor to Q4 FY26 growth was the formulation business. Revenue from formulations in Q4 FY26 stood at INR 91.3 crore versus INR 64.8 crore in Q4 FY25, a 41% year-on-year increase. The company said exports contributed 69% to this formulations growth, underlining improving traction outside India. For the full year, formulation revenue reached INR 330.5 crore in FY26, up from INR 284.9 crore in FY25. The company also highlighted a broader push towards high-value products and regulated export markets, where quality and compliance capabilities can shape long-term competitiveness.

Export mix improves in FY26

Export contribution to overall business increased from 35% in FY25 to 38% in FY26. The company linked this improvement to expanding presence in regulated markets and higher-value offerings. A rising export share is also relevant for investors tracking demand diversification and currency-linked revenue streams. However, the quarter also illustrated that external conditions, including geopolitical disruptions, can affect sourcing and operating costs. Management commentary suggested that the company is attempting to manage these cross-currents through a combination of product mix and backward integration.

Sayakha methylamine plant: operational ramp-up becomes central

A major operational milestone in FY26 was the ramp-up of Aarti Drugs’ methylamine backward integration plant at Sayakha. The facility reached a production rate of nearly 1,000 tonnes per month by March 2026. Management indicated the plant started in September, reached around 29% utilisation by December, and moved slightly over 40% utilisation in March. It also cited ammonia-based raw material challenges during the ramp-up phase, linked to the West Asia war, as a temporary headwind. The plant is expected to improve self-sufficiency and margins for the company’s metformin portfolio, since methylamines are key inputs for APIs such as metformin.

Utilisation guidance: near-term and one-year visibility

The company expects utilisation at the Sayakha methylamine facility to cross 55% to 60% in the June quarter and reach upwards of 70% within a year. If achieved, this would mark a clear progression from early ramp-up to steady-state operations. The trajectory also matters because backward integration benefits tend to scale with utilisation levels. Management framed the plant’s ramp-up as an operational lever supporting the broader scale-up phase that started in FY26. The performance during higher utilisation testing was described as encouraging.

FY26 snapshot: steady topline and profit growth

On a full-year basis, Aarti Drugs reported revenue of INR 2,567.7 crore in FY26, up 7% from INR 2,403.4 crore in FY25. EBITDA increased 3% to INR 311.6 crore. PAT rose 16% year-on-year to INR 194.9 crore, and PAT margin improved to 7.6% from 7.0%. The annual numbers suggest that while margins faced volatility within the year, profitability improved overall. The company’s commentary tied FY26 performance to operational transition and execution on new capacity ramps.

Capex and FY27 operating targets

Aarti Drugs said it completed capex of around INR 600 crore, with two greenfield facilities operationalised: Sayakha Amines and the Tarapur salicylic acid facility. Looking ahead, the company indicated planned capex of INR 300 crore to INR 400 crore. It also stated a target EBITDA margin of 13.5% to 14% for FY27, implying confidence in operating improvements as new assets move towards higher utilisation. These targets will likely be monitored closely, given the link between ramp-up efficiency, input cost stability, and export-led product mix.

Key financial and operating data (as reported)

What investors may track next

The company has scheduled a meeting with analysts and institutional investors for May 27, 2026, at the Grand Hyatt in Mumbai. That interaction is likely to focus on the methylamine plant ramp-up curve, the pace of improvement in input availability, and progress in regulated export markets. Investors may also watch whether EBITDA margins sustain near the Q4 FY26 level and how quickly management moves towards its FY27 margin target. Execution on planned capex, alongside steady utilisation improvements, will remain closely linked to operating outcomes.

Conclusion

Aarti Drugs closed FY26 with a stronger sequential Q4, supported by formulations growth and improved operating performance. The Sayakha methylamine plant ramp-up, which reached nearly 1,000 tonnes per month run-rate in March 2026, is positioned as a key driver for future self-sufficiency and metformin portfolio margins. Near-term attention will centre on the June quarter utilisation milestone and the company’s FY27 margin target of 13.5% to 14%, alongside updates at the May 27, 2026 investor meeting.