Aarti Surfactants profit rises nearly eightfold in September

Aarti Surfactants Limited reported standalone net profit of Rs 12.5883 crore for the three months ended 30 September 2026, against Rs 1.6288 crore a year earlier, as revenue rose to Rs 291.2352 crore and operating margin widened to 10.23% from 5.24%. The quarter included a Rs 4.3003 crore exceptional provision.

How much did Aarti Surfactants earn in the September quarter?

Aarti Surfactants earned standalone profit after tax of Rs 12.5883 crore in the three months ended 30 September 2026, compared with Rs 1.6288 crore in the three months ended 30 September 2025. Profit was also above Rs 9.0770 crore reported for the three months ended 30 June 2026. Basic earnings per share rose to Rs 14.86 from Rs 1.93 a year earlier and Rs 10.72 in the preceding quarter.

Revenue from operations was Rs 291.2352 crore, compared with Rs 179.1661 crore a year earlier and Rs 272.8701 crore in the June 2026 quarter. Other income was Rs 0.1498 crore, taking total income to Rs 291.3850 crore. The company reports one operating segment, home and personal care ingredients, rather than providing a product-level revenue split.

Aarti Surfactants recorded total comprehensive income of Rs 12.4256 crore in the September 2026 quarter after other comprehensive loss of Rs 0.1627 crore. Paid-up equity share capital stood at Rs 8.4782 crore at 30 September 2026, compared with Rs 8.4658 crore a year earlier. Consolidated profit after tax was Rs 12.5026 crore, marginally below the standalone result of Rs 12.5883 crore.

What changed in Aarti Surfactants’ operating margin?

Aarti Surfactants reported a standalone operating margin of 10.23% in the September 2026 quarter, up 4.99 percentage points from 5.24% a year earlier and 2.74 percentage points from 7.49% in the June 2026 quarter. The company defines operating margin as earnings before interest, tax, depreciation and amortisation, excluding other income, divided by revenue from operations.

Total expenses rose to Rs 269.8364 crore from Rs 176.9563 crore in the year-earlier quarter, while revenue increased by Rs 112.0691 crore to Rs 291.2352 crore. Consequently, profit before exceptional items and tax increased to Rs 21.5486 crore from Rs 2.2688 crore. In the June 2026 quarter, profit before exceptional items and tax was Rs 12.2670 crore.

Material consumption was Rs 246.6805 crore, compared with Rs 173.9339 crore a year earlier. Employee-benefit expense rose to Rs 7.2984 crore from Rs 5.8499 crore, finance costs increased to Rs 3.7471 crore from Rs 2.8013 crore, and other expenses were Rs 23.5286 crore against Rs 16.3372 crore.

Changes in inventories reduced expenses by Rs 16.1885 crore in the September 2026 quarter, compared with a reduction of Rs 26.3151 crore a year earlier. Depreciation and amortisation rose to Rs 4.7703 crore from Rs 4.3491 crore. The reported net profit margin rose to 4.32% from 0.91% a year earlier and from 3.33% in the preceding quarter.

How did the exceptional provision affect Aarti Surfactants’ profit?

Aarti Surfactants recognised a Rs 4.3003 crore exceptional provision in the quarter ended 30 September 2026, reducing profit before tax from Rs 21.5486 crore before exceptional items to Rs 17.2483 crore. The company reported no exceptional item in the September 2025 or June 2026 quarters.

The provision includes Rs 2.8279 crore for customs duty, interest and penalty under an Order-in-Original dated 24 September 2026, relating to a Directorate of Revenue Intelligence show-cause notice dated 28 October 2016. It also includes Rs 1.4724 crore for stamp duty connected with the scheme of demerger. Both amounts had been disclosed as contingent liabilities at 31 March 2026.

Aarti Surfactants said it recognised the provision based on the order received and the current status of the matters, without prejudice to its rights. It is evaluating legal remedies, including an appeal. Amounts of Rs 3.7256 crore paid under protest in earlier years remain recorded as recoverable pending the final outcome.

A separate Directorate of Revenue Intelligence matter concerns duty of Rs 6.7086 crore, unchanged from 31 March 2026. The company said the 14 March 2017 notice had been remanded for fresh adjudication, the hearing had concluded and an order was awaited. It has not made a provision for that matter and continues to classify the amount as a contingent liability.

What do the six-month results and balance sheet show?

Aarti Surfactants reported standalone revenue from operations of Rs 564.1053 crore for the six months ended 30 September 2026, against Rs 395.0653 crore in the corresponding prior-year period. Net profit after tax increased to Rs 21.6653 crore from Rs 4.6867 crore, while operating margin rose to 8.90% from 5.33%.

Standalone total assets rose to Rs 573.5764 crore at 30 September 2026 from Rs 518.4807 crore at 31 March 2026. Property, plant and equipment increased to Rs 201.0234 crore from Rs 195.5653 crore, capital work-in-progress rose to Rs 53.1444 crore from Rs 39.6173 crore, and inventories increased to Rs 142.5718 crore from Rs 118.6449 crore.

Total equity was Rs 267.5166 crore at 30 September 2026, up from Rs 246.8445 crore at 31 March 2026, while total liabilities rose to Rs 306.0598 crore from Rs 271.6362 crore. Non-current borrowings were Rs 50.9255 crore and current borrowings were Rs 61.5045 crore at the September balance-sheet date.

On 5 August 2026, Aarti Surfactants redeemed 10,82,387 4% non-convertible redeemable preference shares. It paid Rs 23.2341 crore comprising face value, premium and the return payable on redemption, and transferred the nominal value of Rs 1.0824 crore to the capital redemption reserve.

What international expansion step did Aarti Surfactants disclose?

Aarti Surfactants incorporated Precision Ingredients USA Inc. as a wholly owned subsidiary in the United States on 27 August 2026 as part of its international expansion strategy. The subsidiary had not commenced operations and had no assets, liabilities or transactions up to 30 September 2026.

The company’s consolidated September-quarter profit of Rs 12.5026 crore was therefore close to the standalone Rs 12.5883 crore result. The auditor stated that no consolidation adjustment was required for the new subsidiary for the period because it had no transactions up to 30 September 2026. On 3 September 2026, CRISIL Ratings assigned CRISIL A-/Stable to Aarti Surfactants’ long-term bank facilities, previously rated CARE BBB+/Stable by CARE Ratings.

Conclusion

Aarti Surfactants’ September-quarter revenue increase to Rs 291.2352 crore was accompanied by a rise in operating margin to 10.23% and net profit to Rs 12.5883 crore. The result absorbed a Rs 4.3003 crore exceptional provision, with profit before exceptional items and tax reaching Rs 21.5486 crore compared with Rs 2.2688 crore a year earlier.

The next disclosed matters to watch are Aarti Surfactants’ evaluation of an appeal on the Rs 2.8279 crore customs provision and the awaited order in the separate Rs 6.7086 crore duty matter. Precision Ingredients USA Inc., incorporated on 27 August 2026 for international expansion, had not begun operations by 30 September 2026.