On Wednesday, Aarti Industry reported its earnings for the quarter ended June 30, 2022. The revenue from operations (gross) grew by 45% Y-o-Y to INR 2,173 Crores from INR 1,503 Crores during the same period. While the net profit was up by 15% from INR 165 Crores to INR 189 Crores and the EPS rose by 10% during the same period.
Despite shortage of nitric acid, revenues of Aarti’s speciality chemicals business rose by a stunning 43.8% to INR 1765.59 Crores in Q1 compared to INR 1227.70 Crores in the same quarter a year ago. Higher share of value added products (74%) too galvanized product realizations, thus propping revenues. Thanks to its pricing model – absolute margins per kg – speciality chemicals EBIT dropped to 14.2% as against 18.9% in the same quarter a year ago. Higher volume ramp up is expected largely due to higher capacity utilization of assets related to first and second long term contracts.
Its pharmaceuticals business was barely left behind for its revenues grew by a blistering 47.8% not least due to higher of take of generic products and xanthine. Passing of higher input prices too boosted the topline. Its EBIT margin was all but stable for it dropped by some 30 bps to 18.7% as against 19% in the same quarter a year ago. Pharmaceutical business will scarcely stymie not least due to commencement of commercial production of USFDA approved API facility at Tarapur sometime in early Q2.
Commenting on the earnings – Mr Rajendra Gogri, Chairman and MD commented:
” I am pleased to share that we started the new financial year on an encouraging note with healthy topline growth of 45% YoY and EBITDA improvement of 18% YoY in Q1 of FY23. This strong performance has come on the back of challenging operating environment premised on continued inflationary pressure in key raw materials and other utilities combined with logistical disruptions and global uncertainties. The global inflationary trend and recession fears have resulted in modest slowdown in demand from some end user segments. Given this backdrop, our performance has been resilient, and I would like to congratulate our workforce for demonstrating agility and traversing through these pressures to deliver stellar performance in a tough environment. We remain committed to drive over businesses through challenging situations and deliver robust performances.”