Aarti Drugs shares jump 7% as Q2 net profit surges 83%

Shares of Aarti Drugs Ltd rose 7% in Wednesday's trade after the pharmaceutical company reported an 83% year-on-year (YoY) jump in consolidated net profit to Rs 82.8 crore for the September quarter of FY27. Consolidated revenue increased 27% to Rs 828.8 crore, compared with Rs 652.9 crore in the year-ago period.

The company reported a sharp improvement in operating performance, with Ebitda climbing 63% to Rs 137.9 crore from Rs 84.4 crore a year earlier. Ebitda margin expanded 370 basis points to 16.6%, against 12.9% in the corresponding quarter last year. Profit after tax (PAT) margin also improved by 310 basis points to 10%, compared with 6.9% in Q2 FY26.

The shares touched a high of Rs 500, up 7.39% from their previous close of Rs 465.60. The stock opened at Rs 493 and touched a low of Rs 486.55 during the session.

Aarti Drugs' performance was supported by growth across its business segments. Revenue from the active pharmaceutical ingredients (API) business rose 17% YoY to Rs 604.5 crore. Formulation revenue increased 58% to Rs 130 crore, while specialty chemicals revenue nearly doubled, rising 92% to Rs 71.8 crore. Revenue from intermediates and others grew 16% to Rs 19.9 crore.

The company also reported a 35% increase in gross profit to Rs 329.7 crore. Gross margin improved to 39.9% from 37.5% in the year-ago quarter, an expansion of 240 basis points.

For the first half of FY27, consolidated revenue grew 23% to Rs 1,532.4 crore, while Ebitda increased 48% to Rs 234.8 crore. PAT rose 34% to Rs 132.9 crore. The company's Ebitda margin for the six-month period expanded 250 basis points to 15.3%.

Commenting on the performance, Managing Director Adhish Patil said, "The company recorded its highest-ever quarterly Ebitda of Rs 138 crore, with margins reaching their highest level in nearly six years". He attributed the performance to volume growth, stronger realisations across its API, formulations and specialty chemicals businesses, and progress in building an integrated manufacturing platform.