Aarti Industries Ltd. has reported net profit of Rs. 137 crore in Q1 FY25 as compared to Rs. 70 crore in Q1 FY24, reflecting a YoY growth of 96 per cent. THe company posted PAT of Rs. 132 crore in Q4 FY24.

Aarti's Q1 FY25 YoY revenues registered a jump of 28 per cent at 2,012 crore as compared to revenues of Rs.1, 571 crore. The company has posted revenues of Rs. 1,955 crore in Q4 FY24. Aarti's revenue growth in Q1 FY25 is driven by volume-led recovery in both core and contracted products.  The company witnessed healthy rebound in exports for select products, along with stable domestic volumes. EBITDA increased despite severe pricing pressures. Performance was anchored by volume-led operating leverage with better product mix.

Commenting on the performance for Q1 FY25, Rajendra Gogri, Chairman, Aarti Industries Limited said: “We continue to deliver yet another quarter of sequential growth. This performances came despite pricing headwinds as well as supply chain pressures. Additionally, continued global challenges from overcapacity in China affected demand supply dynamics. Nonetheless, we remained focused on execution and anticipate a volume-led recovery in this year.

“Recognizing the evolving market landscape, we have undertaken a strategic transformation. In addition to strengthening our senior leadership team, we have forged strategic partnerships to offer customized solutions from concept-to-commissioning stage. Our goal is to deliver sustainable growth while maximizing our potential. Today, we are a future-ready organization committed to exceptional customer value.

“As we embark on our 40th year in Specialty Chemicals, Aarti Industries is stronger than ever with renewed vigor on excellence, innovation, passion, and determination. As a global partner of choice, we will continue to serve and expand our robust client base, while ensuring sustained value creation for our shareholders by optimising our assets and venturing into newer business opportunities.”

According to the company, dumping from China into global market continues, resulting in ongoing pressure on margins. Moreover, Red Sea crisis has impacted the global supply chain, which is resulting into higher TaT, thereby impacting volumes in certain instances.

The company attributes the Y-o-Y increase in interest costs to ongoing CAPEX initiatives and rising interest rates. Also, capitalisation of new projects commissioned in FY24 led to higher depreciation.

Key Project Updates

● Phase 2 Acid revamp cum expansion completed in Q1 FY25.

● Other Projects such as NT & Ethylation expansion, debottlenecking and expansion of few specialty chemicals units, greenfield Chloro Toluene project, MPP, etc. are progressing well as planned.

● Q1 FY25 Capex is about Rs. 270 crore.

Outlook

FY25

● Recovery of Volumes across the sector, ramp-up of capacities and higher operating leverages shall lead to EBITDA growth

● Commissioning of expanded capacities of NT, Ethylation and other specialty Chemicals capacities.

● Zone 4 to start gradually going onstream 

FY26 and beyond

● EBITDA growth driven by:

o Zone 4 ramping up

o New Strategic opportunities

o Higher utilisation for existing capacities at Zone 1, 2 and 3