Aarti Drugs Posts Strong Q1 FY26 Results with Significant YoY Growth

Aarti Drugs Limited (NSE: AARTIDRUGS), a well-diversified and fully integrated pharmaceutical company, has recently released its financial results for the quarter ended June 30, 2025. The continued growth in both domestic and international markets during the period has put the limelight on Aarti Drugs share price, which rose ~2% on July 21, 2025.

Aarti Drug Q1FY26 Earnings - Consolidated

For the first quarter of FY26, Aarti Drugs reported a consolidated revenue of ₹590.8 crores, reflecting a 6% year-on-year (YoY) growth over ₹556.5 crores in the same quarter last year. Gross profit rose to ₹217.4 crores, an 11% increase from ₹196.6 crores in Q1 FY25, driven by improved cost management and operational efficiencies.

EBITDA for the quarter stood at ₹74.4 crores, up 12% YoY from ₹66.1 crores. The EBITDA margin improved to 12.6%, a rise of 70 basis points compared to the previous year. Profit before tax (PBT) came in at ₹51.1 crores, reflecting a 16% increase from ₹44.0 crores.

The company delivered a substantial 62% increase in profit after tax (PAT), which stood at ₹54.0 crores compared to ₹33.3 crores in Q1 FY25. The PAT margin also saw a healthy expansion to 9.1%, up from 6.0% in the same period last year. Earnings per share (EPS) grew correspondingly to ₹5.91, up from ₹3.62.

Aarti Drug Q1FY26 Earnings - Standalone

On a standalone basis, the company reported a revenue of ₹521.3 crores for Q1 FY26, representing a 6% increase from ₹493.1 crores in Q1 FY25. The standalone business contributed approximately 86% to the company’s consolidated revenue for the quarter.

Geographically, the domestic market contributed 65% of the standalone revenue, while the remaining 35% came from export markets. Notably, export revenue grew by 18% YoY, driven by higher demand in select therapeutic categories, while domestic sales remained flat during the quarter. This shift highlights the growing contribution of international markets to Aarti Drugs’ revenue mix.

Also Read: HDFC Bank Share Price in Focus; Posted ₹181.6 Billion Profit in Q1 FY26 Results

Aarti Drugs Management Take on Q1FY26 Earnings

Commenting on the same, Mr. Adhish Patil, CFO & COO, of Aarti Drugs Limited said, "In Q1 FY26, Revenues grew by 6% YoY to Rs. 591 crores with Gross Profit Margins improving by 130 basis points YoY to 36.8%. EBITDA has increased by 12% YoY to Rs. 74 crores, and EBITDA Margins have improved to 12.6%. The quarter witnessed improved demand for active pharmaceutical ingredients (APIs), leading to a recovery and growth in volumes as compared to Q1FY25.

During Q1FY26, the Company incurred Capex of ~Rs. 48.5 crores mainly towards capacity expansion, backwards integration and finished formulation R&D. For FY26, we expect Capex at ~Rs. 150-200 crores. The Company has started trial productions at its new greenfield manufacturing facility in Sayakha, Gujarat. This plant has been set up mainly for backward integration into anti-diabetic products and their intermediates and is expected to largely serve internal requirements.

This backward integration is a key strategic step that should help improve profit margins over time and reduce the risk of input costs volatility. This project will support internal requirements for our anti-diabetic product and choline chloride, contributing to backward integration, margin improvement, and supply chain de-risking.

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