AARTI INDUSTRIES LTD. (NSE: AARTIIND): Q3 FY23 Results Out; Total Income fell 15% YoY

Aarti Industries ltd. (NSE:AARTIIND), a specialty chemical firm, recently announced its Q3FY23 financial results. The company reported a revenue of Rs 1,854 crore, an increase of 12% YoY. The EBITDA for the quarter was Rs 289 crore, which was a 26% increase YoY. The PAT for the quarter was Rs 137 crore.

The company attributed the growth in revenue to higher prices of raw materials, increased utility costs, and increased freight costs. Despite some corrections in prices, the revenue remained stable due to a higher mix of value-added products. The performance was also driven by higher contributions from legacy products that target essential end-user segments, as well as incremental revenue from newly added capacities.

However, product offtake in the textile industry, such as dyes and pigments, remained subdued. This is expected to recover over the next two to three quarters. There was a QoQ decline in some input costs and logistics, while others remained elevated. The company has pricing mechanisms in place to mitigate the impact of these inflationary cost pressures.

The EBITDA improvement was significant due to a dynamic product mix and efforts to mitigate global challenges. The depreciation was in line with the new capacities commissioned, while finance costs had an impact of M2M loss of about Rs 11 crore in respect of the unhedged ECBs.

The company has various growth initiatives underway, including NCB capacity expansion and specialty chemicals plants, which are expected to come online over the next two quarters and start generating revenue in a phased manner from H1FY24. The chairman and MD of the company, Rajendra Gogri, commented that the company has demonstrated sustained performance, with strong gains in both topline and profitability metrics despite softness in demand across some end-user categories. The company remains confident in delivering growth through manufacturing and process enhancements, combined with strength in R&D and innovation.