Aarti Pharmalabs reports Q2 FY26 results, growth initiatives

Aarti Pharmalabs reported operational revenue of INR 4,183 million for Q2 FY26, an 8.3% increase quarter-on-quarter but an 8.7% decrease year-on-year compared to Q2 FY25. EBITDA stood at INR 747 million with an EBITDA Margin of 17.86% for Q2 FY26, reflecting a decline from Q1 FY26 and Q2 FY25 margins. Profit After Tax (PAT) for Q2 FY26 was INR 279 million, with a PAT Margin of 6.67%. The company noted a negative impact on PAT due to a forex loss of Rs. 7.4 crores in Q2 FY26.

Key operational highlights include incremental capacity operation in the Xanthine derivatives segment, leading to better margins from beverage customers. The API & Intermediates segment experienced margin pressure and a sales mix skewed towards lower-margin APIs. The CDMO/CMO business dispatched orders as scheduled, on track to meet growth expectations for FY26, and the Atali Greenfield site was operationalized in Q2 FY26.

The company's strategic outlook includes a Greenfield Capex of INR 400 crores for the Atali Project, aiming for 450 KL capacity for intermediates and CDMO/CMO, expected to ramp up by Q4 FY26. A Brownfield Capex of INR 150 crores for Tarapur will enhance Xanthine derivatives capacity to 9,000 MTPA, with commissioning expected in Q4 FY26. Aarti Pharmalabs targets expanding its global market share in Xanthine derivatives from 15-20% to 20-25% post-capacity increase.