Aarti Industries Q2 revenue rises 73% on energy volumes

Aarti Industries reported consolidated revenue of Rs 3,887 crore in the second quarter of financial year 2027 (Q2 FY27), up 73% year on year and 48% sequentially. AIL attributed the increase to volume growth and elevated input-price pass-through, while energy volumes rose 57% year on year and energy applications accounted for 50% of revenue.

How much did AIL’s revenue increase in Q2 FY27?

AIL’s consolidated revenue increased to Rs 3,887 crore in Q2 FY27 from Rs 2,250 crore in Q2 FY26, a 73% year-on-year rise. Revenue was also 48% above Rs 2,627 crore in Q1 FY27, showing a higher sales level than in the immediately preceding quarter.

For the first half (H1) of FY27, AIL recorded revenue of Rs 6,513 crore, compared with Rs 4,118 crore in H1 FY26, an increase of 58%. Earnings before interest, tax, depreciation and amortisation (EBITDA) also increased 58% to Rs 802 crore, while profit after tax (PAT) rose 117% to Rs 324 crore.

What drove AIL’s Q2 FY27 revenue growth?

AIL said Q2 FY27 revenue growth came from overall volume growth together with passing elevated input prices on to customers. The reported Rs 1,637 crore year-on-year increase therefore reflected both higher volumes and pricing linked to input-cost conditions.

Energy was the largest end-use category, generating Rs 1,928 crore in Q2 FY27, compared with Rs 961 crore in Q2 FY26 and Rs 998 crore in Q1 FY27. AIL linked global demand to high refining margins and robust gasoline-naphtha cracks, while saying that higher raw-material costs also increased energy’s revenue share.

How did AIL’s energy volumes compare with non-energy volumes?

AIL’s energy volumes increased 57% year on year and 51% quarter on quarter in Q2 FY27, exceeding non-energy volume growth of 19% and 7%, respectively. The company reported energy-volume increases across the United States, European Union, Middle East and North Africa, and India.

Energy represented 50% of Q2 FY27 revenue, while pharma accounted for 13%, agrochemicals and fertilizers 12%, dyes, pigments and printing inks 12%, and polymer and additives 10%. Pharma revenue rose to Rs 505 crore from Rs 225 crore a year earlier, driven mostly by price and volume increases in PNCB, while polymer and additives revenue reached Rs 389 crore amid softness in the PDA chain.

What changed in AIL’s profitability and financing needs?

AIL’s Q2 FY27 EBITDA was Rs 418 crore, up 44% from Rs 291 crore in Q2 FY26 and 9% from Rs 385 crore in Q1 FY27. PAT increased 60% year on year to Rs 169 crore and 9% sequentially from Rs 155 crore, so reported revenue growth exceeded the percentage increases in both EBITDA and PAT.

Consolidated EBITDA of Rs 418 crore was below standalone EBITDA of Rs 459 crore because AIL created an incremental stock-reserve provision for in-transit inventories that had not been delivered to end customers. The company also said higher input prices increased working capital and debt, resulting in higher finance costs during Q2 FY27.

Which capacity developments could affect AIL’s next quarters?

AIL completed fuel-additives capacity expansion to 360 kilotonnes per annum (KTPA) from 290 KTPA in July 2026. Methylation, the fuel-additives product group, moved from 65-85% capacity utilisation in Q1 FY27 to above 85% in Q2 FY27.

Ethylation utilisation also rose from 65-85% in Q1 FY27 to above 85% in Q2 FY27, while NCB, DCB and hydrogenation were each above 85%. PDA remained below 65%, which AIL attributed to subdued United States demand and competition from China, while DCB debottlenecking towards 140 KTPA from 120 KTPA was under way.

What commercialisation and contract milestones has AIL disclosed?

AIL commissioned Phase I of Zone IV, including calcium chloride, PEDA and part of a multipurpose plant. It is targeting progressive commercialisation of all Zone IV manufacturing blocks during FY27, following commercial qualification, customer approvals and disciplined ramp-up.

Separately, AIL entered a manufacturing and supply agreement lasting more than 10 years with a global speciality chemical company, with estimated cumulative revenue of about Rs 1,500 crore over the contract period. AIL plans to set up, commission and operate an Indian facility using the customer’s proprietary process technology, with operations expected to commence in FY29.

Conclusion

AIL’s Q2 FY27 performance combined a 73% increase in revenue with 57% year-on-year growth in energy volumes, higher input-price pass-through and energy revenue of Rs 1,928 crore. EBITDA rose 44% and PAT increased 60%, while the company also reported that elevated input prices increased working-capital requirements, debt and finance costs.

The next disclosed milestones are commercial qualification and progressive FY27 ramp-up of Zone IV blocks, including PEDA and the multipurpose plant, as well as utilisation of the 360 KTPA fuel-additives capacity expanded in July 2026. AIL is also progressing DCB debottlenecking towards 140 KTPA, while the new long-term manufacturing agreement is scheduled to begin operations in FY29.