Aarti Pharmalabs Limited hosted its Q4 FY26 earnings call on May 26, 2026, discussing robust growth across segments, particularly in CDMO and Xanthine derivatives. The company outlined significant expansion plans and a strategic focus on enhancing manufacturing capabilities. Key discussions included revenue growth projections, operational efficiency improvements, and an outlook on EBITDA performance driven by strategic investments and market opportunities.
Financial Performance and Outlook
Aarti Pharmalabs Limited reported strong performance for the fourth quarter and full financial year ending March 2026. Revenue for Q4 FY26 stood at Rs.580 Crores, a 9% increase year-on-year from Rs.530 Crores in the previous year. For the full year FY26, revenue reached Rs.1798 Crores, slightly up from Rs.1771 Crores in FY25. EBITDA for Q4 FY26 was Rs.134 Crores, compared to Rs.141 Crores in the corresponding period last year. Full-year EBITDA was Rs.406 Crores versus Rs.428 Crores in FY25. Profit after tax for Q4 FY26 was Rs.62 Crores, down from Rs.89 Crores last year, and full-year profit after tax was Rs.176 Crores compared to Rs.257 Crores in FY25. The company noted a net foreign exchange loss of Rs.33 Crores for FY26. The board declared a final dividend of Rs.2 per share, bringing the total dividend for FY26 to Rs.3.50 per share.
Segmental Performance and Expansion
The Xanthine derivative segment recorded its highest-ever quarterly revenue, contributing 43% to Q4 FY26 turnover, with export sales at 63%. The API and intermediate business accounted for 28% of turnover, with a 53% regulated market share. The company anticipates YoY growth for this business in FY27, despite competitive pressures. The CDMO, CMO segment contributed 29% of Q4 FY26 revenue, with Rs.155 Crores in quarterly revenue, a 32% YoY growth for the full year FY26. This segment is focused on phase 3 and commercial molecule projects.
Aarti Pharmalabs invested approximately Rs.400 Crores in capital expenditure during FY26 and plans a similar level of spending for FY27. This includes Xanthine expansion, debottlenecking at Tarapur Unit-4, and a new production block at Atali. The Atali plant is nearing full operational capacity for phase 1, supporting CDMO and intermediate production. The company is also considering a dedicated manufacturing block at Atali with an estimated 12-month completion timeline from construction commencement.
Future Growth and Strategic Focus
The Xanthine derivatives expansion is on track, with capacity expected to reach 9,000 metric tons per annum. Steroid block debottlenecking at Tarapur Unit-4 has increased capacity by about one-third. The company plans to invest in R&D for peptides and oligonucleotides. Aarti Pharmalabs targets 15% to 18% growth in revenue and EBITDA for the next three to four years. For FY27, the CDMO/CMO business is expected to lead growth with a projected sales increase of 40% to 50% per annum.
Q&A Highlights
During the Q&A session, management discussed the dedicated CDMO block at Atali, with a potential revenue of Rs.250 Crores to Rs.300 Crores. The company aims to reach USD 100 million in the CDMO segment. Regarding the API segment, the company expects to surpass FY25 numbers in FY27, with growth driven by new product launches in oncology. The EBITDA guidance of 15% to 18% remains, with a focus on long-term growth, acknowledging potential shifts in project timelines. Management also addressed raw material cost impacts, emphasizing efforts to pass on price increases, particularly for API and intermediates, and noted that foreign exchange losses are excluded from EBITDA calculations.
Source: BSE
