Aarti Drugs Limited, a Mumbai based diversified and fully integrated pharmaceutical company, with interests in Active Pharmaceutical Ingredients (API), Formulation, Specialty Chemicals, and Intermediates has announced Q3 FY23 revenue stood at Rs. 665 crore, a growth of 4% YoY.

EBITDA stood at Rs. 71.7 crore as against Rs. 96.7 crore YoY. PAT stood at Rs. 36.7 crore as against Rs. 58.3 crores YoY. PAT Margin (%) stood at 5.5%.

Standalone Q3 FY23 revenue stood at Rs. 626.5 crore as against Rs.  594.8 crore, a growth of 5% YoY.

Around 61% of the revenues came from the domestic market and 39% from the exports market for Q3 FY23 for a standalone business.

Domestic revenue grew approximately by 8% while exports grew by around 2% year-on-year for Q3 FY23.

Within the API business, the antibiotic therapeutic category contributed 45%, anti-diabetic 16%, anti-protozoal 16%, anti-inflammatory 12%, antifungal 8% and the rest contributed 3% to total API sales for Q3 FY23.

Q3 FY23 revenue for formulation stood at Rs. 49.9 crore as against Rs. 54.9 crore. Around 39% of the revenue came from exports during the quarter.

Commenting on the results, Adhish Patil, Chief Financial Officer, Aarti Drugs Limited said, “The company’s overall API revenue for the quarter grew by 9% YoY. However, due to a correction in raw material prices, the company made some price adjustments in order to defend its market share. Owing to API price correction, the company undertook inventory loss of approx. Rs. 6 crore as a prudent practice. All of this weighed on the gross margins by almost ~100 bps during the quarter. The company has increased the inventory levels of imported KSMs and other raw materials due to a sudden spike of Covid-19 cases and holidays related to a new year in China. API sales volume in exports were affected to some extent due to shortage of US Dollar in many countries. The finance cost also increased due to higher working capital requirements and rising interest rates."

"The company has already received commitments from the customers for the brownfield expansion products as well as has received a committed line of order for a campaign based product. As a result, the company is eyeing to double the revenue from the Specialty Chemicals business within the next 12 months through the ongoing brownfield expansion," commented Patil. 

"Formulation segment revenue stood at Rs. 49.9 crore for the quarter. The formulation segment contributed 8% to the consolidated revenue for the quarter. The company’s core focus remains on growing the exports revenue," said Patil.

"The Capex for 9M FY23 stood at Rs. 115 crore and is expected to be in the range of Rs. 200-250 crore for the entire FY23. Tarapur greenfield facility is expected to be completed well within the timeline which will enable the company to foray into new API therapy of Dermatology. The construction activity for the Gujarat Capex has also been ramped up. Tarapur specialty chemicals facility will be fully ramped up post the installation of equipment which are being imported. These equipments are expected to arrive by April 2023. The company’s various capex initiatives are expected to be completed and fully scaled up over the period of next two years in a phased manner and are expected to bolster the topline and profitability growth,” added Patil.