Aarti Drugs specialty chemicals rise 92% as Sayakha ramps

Aarti Drugs Limited (Aarti Drugs) reported specialty-chemicals revenue of Rs 71.8 crore in Q2 FY27, up 92% year on year, as management said the Sayakha facility had scaled up and, within a year of commissioning, met a significant share of the company’s metformin-intermediate needs internally.

How quickly did Aarti Drugs' specialty-chemicals business grow?

Aarti Drugs' specialty-chemicals revenue nearly doubled year on year in Q2 FY27, reaching Rs 71.8 crore from Rs 37.3 crore in Q2 FY26. The reported 92% increase exceeded the 58% rise in formulation revenue and the 16% growth in intermediates and others shown in the company’s quarterly segment update.

The growth was lower sequentially. Specialty-chemicals revenue of Rs 71.8 crore in Q2 FY27 was 13% below Rs 82.6 crore in Q1 FY27, according to Aarti Drugs’ segment table. Across H1 FY27, the segment generated Rs 154.3 crore, compared with Rs 70.4 crore in H1 FY26, representing a 119% increase across the two reported FY27 quarters.

What did Aarti Drugs say Sayakha changed?

Aarti Drugs said Sayakha’s scale-up was behind the near doubling of its specialty-chemicals business in Q2 FY27. Management said that, within a year of commissioning, the facility was meeting a significant share of the company’s metformin-intermediate requirements in-house, increasing internal production in the anti-diabetic supply chain.

The disclosed mechanism is greater integration rather than a quantified selling-price effect. Management said internal supply enhanced cost competitiveness and supply-chain security in the anti-diabetic segment, while describing Q2 FY27 growth more broadly as supported by volume growth and realisations across active pharmaceutical ingredients (APIs), formulations and specialty chemicals. The release does not state Sayakha’s capacity, utilisation, internal-supply percentage or associated cost saving.

How did Aarti Drugs' wider Q2 FY27 performance compare?

Aarti Drugs reported consolidated revenue of Rs 828.8 crore in Q2 FY27, 27% above Rs 652.9 crore in Q2 FY26, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 63% to Rs 137.9 crore from Rs 84.4 crore. EBITDA margin increased by 370 basis points to 16.6% from 12.9%, with 100 basis points equal to one percentage point.

Profit after tax rose 83% to Rs 82.8 crore from Rs 45.2 crore, and the margin increased to 10.0% from 6.9% in Q2 FY26. Management separately described revenue from operations as a record Rs 826 crore, whereas the consolidated financial table lists total revenue of Rs 828.8 crore and notes that its figures include other income; these are separate disclosed revenue measures.

Standalone revenue was Rs 708.9 crore in Q2 FY27, up 22% from Rs 579.0 crore a year earlier, and represented 86% of consolidated revenue. Domestic sales accounted for 68% of standalone revenue and grew 43% year on year, while exports represented 32% and declined 5%, showing contrasting market trends within the standalone business.

Which other businesses contributed to Aarti Drugs' growth?

Aarti Drugs reported formulation revenue of Rs 130.0 crore in Q2 FY27, compared with Rs 82.5 crore in Q2 FY26, an increase of 58%, with exports contributing 74% of quarterly formulation revenue. For H1 FY27, formulation revenue was Rs 211.7 crore, up 30% from Rs 162.8 crore in H1 FY26, while exports accounted for 63% of sales.

The anti-biotic category accounted for 34.1% of standalone API sales in Q2 FY27, followed by anti-diabetic products at 18.2%, anti-protozoal products at 18.1%, anti-inflammatory products at 14.8% and antifungal products at 9.3%. Sayakha’s metformin-intermediate role therefore sits within a disclosed anti-diabetic category, although Aarti Drugs did not provide metformin-specific sales or volumes.

What should investors watch after Aarti Drugs' Sayakha ramp?

Aarti Drugs said capacity expansions at Tarapur, Sarigam and Baddi, including new United States Food and Drug Administration-compliant capacity, were progressing in Q2 FY27. Management said these projects are intended to deepen the company’s presence in regulated markets, but the release gives no commissioning dates, project costs, capacity volumes or revenue targets.

The company’s leadership transition also took effect on October 1, 2026, when Prakash M. Patil retired as Chairman, Managing Director and Chief Executive Officer. Rajesh Gauri became Chairman and Adhish Patil became Managing Director; management said its priorities include improving capacity utilisation, expanding its regulatory footprint and building a more integrated and diversified pharmaceutical company.

Conclusion

Aarti Drugs’ Q2 FY27 performance combined a 92% year-on-year increase in specialty-chemicals revenue to Rs 71.8 crore with a 58% increase in formulation revenue to Rs 130.0 crore and a 63% increase in consolidated EBITDA to Rs 137.9 crore. Management linked the specialty-chemicals result to Sayakha’s ramp-up and its increased internal supply of a metformin intermediate.

The next disclosures should show whether specialty-chemicals revenue recovers from its 13% sequential decline from Rs 82.6 crore in Q1 FY27 and how the Tarapur, Sarigam and Baddi projects progress. Aarti Drugs has outlined plans to raise capacity utilisation and expand its regulatory footprint, but has not disclosed capacity, timing or financial targets for those initiatives.