Aarti Pharmalabs Ltd

Dividend record date

• Purpose: Record date for payment of final dividend for FY 2025-26.
• Security: Equity shares of ₹5 each.
• Record date: Tuesday, 15 September 2026.
• Dividend: Final dividend at 40% (₹2.00 per share).
• Approval: Subject to shareholder approval at AGM on 22 September 2026.
• Payment: By 20 October 2026, subject to approval.

Financial Performance

• Q1 FY27 standalone revenue: INR 535 crores; up 42% YoY from INR 375 crores.
• EBITDA: INR 133 crores; up 40% YoY from INR 95 crores.
• PAT: INR 71 crores; up 49% YoY from INR 48 crores.

Operating Update

• Xanthine derivatives: 57% of turnover; 74% beverages, 26% other.
• Exports 79% of Xanthine turnover; local 21%.
• API and Intermediates: 30% turnover; 58% regulated, 14% RoW, 28% non-regulated.
• CDMO/CMO: 7% of revenue; 22 customers; 57 active projects (37 commercial, 20 developmental).
• Other turnover 6% includes trading, export incentives, and other sales.
• Debottlenecking steroid block at Tarapur Unit 4 completed; 33% capacity added.
• Xanthine capacity expansion: ramp-up; target 80%+ utilization by FY28.
• Atali Block 1 440 kL capacity; fully operational in Q2 FY27.
• Capex INR 149 crores for Atali Block 2; 400+ kL; Groundbreaking Q3 FY27; 12-15 months.
• CDMO revenue target: INR 1,000 crores.

Capex and Projects

• Atali Block 1 Phase 1 & 2 440 kL; fully operational by Q2 FY27.
• Atali Block 2 capex: INR 149 crores; 400+ kL capacity; dedicated projects.
• Block 2 groundbreaking in Q3 FY27; completion 12-15 months.
• Capex total: supports target of INR 1,000 crores CDMO revenue.

Outlook and Guidance

• CDMO/CMO growth guidance: 40-50% for the current year.
• Standalone EBITDA margin guidance: 22-25% for FY27.
• Company-wide gross margin around 50% (+/- a few points).
• Xanthine revenue guidance: INR 900-1,100 crores; could land around 900-1,000 crores.

Q&A Highlights

• Xanthine domestic/export split: 21% local, 79% export; exports to grow with capacity ramp.
• Global Xanthine market share target: 20-25% within next 2 years.
• Xanthine pricing volatility; raw materials; pass-through; margins largely maintained.
• CDMO pipeline: 37 commercial projects; 57 active; 22 customers; H2 driven growth.

Risks and Watchpoints

• Xanthine pricing volatility and raw-material cost fluctuations; pass-through mitigates impact.
• China policy changes: rebates removed; potential volatility in Xanthine pricing.
• CDMO project timing risk; reliance on multi-project, dedicated blocks for scale.

Meeting Details

• Date: August 3, 2026; Earnings Conference Call for Q1 FY27 results.
• Type/Mode: group earnings call; virtual audio discussion.
• Event/Organizer: Investors/Analyst earnings conference call by Aarti Pharmalabs.
• Purpose: discuss unaudited Q1 FY27 results.
• Availability: audio recording uploaded on company website.

Business Overview

• APL focuses on generic APIs and Xanthine derivatives with leading CDMO/CMO services.
• Backwards integrated, non-Chinese dependent across the supply chain.
• World’s third-largest Xanthine derivatives capacity; accreditations include USFDA, EU GMP, EDQM, KFDA, COFEPRIS.
• Pharma business demerged from Aarti Industries; now a standalone entity.
• Western India presence with Tarapur, Dombivli, Vapi, and Atali near ports.

Operational Highlights

• Q1FY27 debottlenecking at Unit 4 steroid block unlocked one-third capacity.
• Xanthine capacity expanded to 9,600 MTPA.
• Tarapur Unit 5 commissioned, adding 3,600 TPA.
• CDMO/CMO pipeline: 22 customers on 57 active projects; 37 commercial.
• Atali Block 2 capex planned; ~405 KL; commercialization expected H2 FY28.

Financial Performance

• Standalone revenue Q1 FY27: INR 5,346 mn; YoY +42.4%.
• Standalone EBITDA: INR 1,327 mn; margin 24.82%.
• Standalone PAT: INR 713 mn; margin 13.34%.
• Consolidated revenue Q1 FY27: INR 5,358 mn; YoY +38.7%.
• Consolidated EBITDA: INR 1,326 mn; margin 24.75%.

Financial Performance (cont.)

• Consolidated PAT: INR 761 mn; margin 14.20%.
• QoQ: revenue down ~8%; EBITDA up ~2%.
• Current period numbers restated due to equity method JV with Ganesh Polychem.

Capital Structure & Liquidity

• Equity share capital: INR 453 mn; total equity FY26: INR 21,246 mn.
• Borrowings: current INR 4,998 mn; non-current INR 1,858 mn.
• Cash & equivalents: INR 85 mn at FY26 end.
• CAPEX: FY26 ~INR 400 cr; Atali Block 2 capex ~INR 149 cr.

Strategic Priorities & Outlook

• Target 15–18% revenue and EBITDA CAGR over next 3–4 years.
• FY27 capex expected at similar levels to FY26 (~INR 400 cr).
• R&D focus for FY27 on TIDES (peptides & oligonucleotides).
• Expand CDMO footprint in USA/EU; diversify global supply chain.
• Groundbreaking for Atali Block 2 in Q3FY27; commercialization H2FY28.

Risks & Mitigation

• Raw material prices elevated due to geopolitical tensions; early signs of easing.
• Regulatory approvals remain critical; ongoing US/EU/Japan audits support operations.
• Foreign exchange movements; profitability impacted by USD forward fair value.

Governance & Leadership

• Pharma business demerged; Aarti Pharmalabs operates as a separate entity.
• Ganesh Polychem Limited: joint venture effective Apr 1, 2025; equity method accounting.
• Regulatory certifications across units (USFDA, EU GMP, EDQM, KFDA, COFEPRIS) maintained.

Director change

• Rajendra Vallabhaji Gogri, Non-Executive Director, to retire by rotation; not seeking re-appointment; tenure ends at ensuing AGM.

Financial results approved

• Unaudited standalone and consolidated quarterly results for quarter ended 30 June 2026 approved with Limited Review Report.

Leadership changes

• Rashesh C. Gogri to become Managing Director from Oct 1, 2026, subject to shareholders' approval.
• Hetal Gogri Gala to become Executive Director from Oct 1, 2026, subject to shareholders' approval.

Capex and capacity expansion

• Approved capacity addition for Development of Intermediate Block with estimated capex Rs 149 Crores.

Governance and committee changes

• Audit Committee reconstituted; Oct 1, 2026 effective date.
• CSR Committee reconstituted; Hetal Gogri Gala appointed Chairperson from Oct 1, 2026.
• Stakeholders Relationship Committee reconstituted; effective immediately.

Meeting Details

• Date: August 07, 2026.
• Time and venue not disclosed.

Key Agenda Items

• Consider and approve unaudited standalone and consolidated financial results for quarter ended June 30, 2026.
• Review Limited Review Reports of auditors for the same period.

Other Notes

• Trading window closed from July 01, 2026 to August 09, 2026 for results announcement.

Dematerialisation processing and listing

• Dematerialisation requests were processed and confirmed to depositories.
• Securities dematerialised have been listed on the stock exchanges where earlier securities are listed.
• Physical certificates for dematerialisation were mutilated and cancelled; depository's name substituted as registered owner within timelines.