Aarti Industries Ltd. has posted 43 per cent drop in its net profit at Rs. 52 crore in Q2 FY25 as compared to Rs. 91 crore during Q2 FY24. However, revenue in Q2 FY25 increased by 12 per cent at Rs. 1,786 crore as compared to Rs. 1,597 crore in Q2 FY24. EBITDA dropped by 13 per cent at Rs. 202 crore in Q2 FY25 as compared to Rs. 233 crore in Q2 FY24.

For the H1 FY25, Aarti Industries PAT saw an increase of 18 per cent to Rs. 189 crore as compared to Rs. 160 crore in H1 FY24. Revenue also witnessed a growth of 20 per cent to Rs 3,797 crore as compared to Rs. 3,168 crore in H1 FY24.

Highlights for the quarter

● While YoY volume grew by ~15%, margin pressures across various product / enduses resulted in lower gross profits.

● Fixed costs remained constant.

● Exceptional Income of 2.3 crs constitutes the gain on account of divestment of stake in a step down subsidiary, ie Nascent Chemical Industries Ltd

● Interest costs remained constant. Benefit for interest rates to accrue gradually from next quarter.

● Depreciation increase attributable to commercialisation of expanded capacities/projects.

● Basis H1FY25 numbers, the company’s tax liability is declining and corresponding deferred tax assets are accrued.

Growth Outlook

● Consistent volume growth over 3 years driven by increased capacities

● Operating leverages and cost optimisation initiatives to drive EBITDA growth beyond volume growth

● Capex for FY25 estimated to be Rs. 1,300 – 1,500 crore vs the earlier estimate of Rs. 1,500-1,800 crore

● Capex for FY26 estimated to be around Rs. 1000 crore

● Target EBITDA range of Rs. 1800-2200 crore in 3 years; Debt/EBITDA of <2.5x and ROCE of >15%