Aether Industries reported strong performance for Q2 FY27, with revenue growth fueled by its Contract Exclusive Manufacturing (CEM) and Contract Research and Manufacturing Services (CRAMS) verticals. These high-value segments now contribute significantly to total revenue, underscoring the company’s strategic shift towards growth-oriented business streams. The company also provided updates on capital expenditure and working capital management.
Aether Industries Reports Q2 FY27 Performance
Aether Industries has announced its financial results for the second quarter and first half of FY27, detailing robust growth driven by its high-value business verticals. The company reported that sales growth for the quarter stood at 23.96% year-on-year and 6.33% quarter-on-quarter, primarily supported by healthy performance in Contract Exclusive Manufacturing (CEM) and Contract Research and Manufacturing Services (CRAMS).
Vertical Performance Highlights
The CEM vertical saw an impressive year-on-year growth of approximately 50.03%, while CRAMS expanded by roughly 23.91% year-on-year. Together, these two verticals now contribute 65.97% of total revenue, aligning with the company’s long-term target of a 70% revenue mix from these segments. Large Scale Manufacturing (LSM) contributed 33.35% to sales, with a strategic reallocation of certain production lines to the higher-growth CEM vertical impacting its performance.
The CRAMS business demonstrated solid growth, boosted by new R&D projects across various sectors, with Oil & Gas and Material Science being key contributors. The company has also transitioned its R&D operations to a 24×7 model and commenced work on a silicon project with Dow Chemicals.
The CEM vertical continues its strong momentum, with major contracts progressing through their ramp-up phase. Revenue from the Baker Hughes contract at the Strata site contributed ₹720 million, and an additional ₹150 million came from the commercial sale of new products from the pilot plant. The Strata site is operating at 61% capacity utilisation, with further improvements expected. The Ascend site is witnessing a progressive ramp-up in production for a European customer, with utilization at 70%. The Magnum site is set to become a key growth driver, with production blocks for semiconductor products and an agrochemical major expected to commence commercial production in Q4 FY27.
LSM delivered year-on-year revenue growth of 1.23%, though it declined 8.35% quarterly. This was attributed to strategic reallocations and was supported by pricing strength, with LSM product prices increasing 27.45% year-on-year.
Sectoral Sales Distribution
The Oil and Gas sector led sales with 33.42% of revenue, driven by demand from Baker Hughes and other customers. Pharmaceutical and Agrochemical sectors contributed 26.58% and 7.86%, respectively, with a expected recovery supported by new product launches. Material Science contributed approximately 17.93% of sales, showing robust year-on-year growth of 16.05%.
Capital Expenditure Update
Construction of the new R&D centre is on track for completion by Q2 FY2028, with total capital expenditure of approximately ₹1,000 million. For the Magnum (Site 5), total capital expenditure was approximately ₹833 million in Q1 FY2027, with two further production blocks slated for commercialization by Q3 FY2027. The total capital expenditure for the current financial year is projected to be between ₹3,000 million and ₹3,500 million.
Margins, Working Capital, and Debt
EBITDA margin for 1H FY27 expanded to 31.64%, an improvement from 30.76% in 1H FY26. This was driven by a favorable revenue mix and continued pricing strength. Inventory days increased to 172 days as of September 30, 2026, a strategic decision to stock up on raw materials amidst volatile conditions and increased shipping costs. Net working capital increased to 165 days. Outstanding borrowings as of September 30, 2026, comprised of ₹4,152 million in working capital loans and ₹2,085 million in term loans.
Capacity Utilisation
Capacity utilisation across plants shows an upward trend due to ramp-up of CEM contracts. Genesis plant is at 77%, Ascend at 70%, and Strata at 61% for Q2 FY27.
Source: BSE
