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Axis Securities Report
Aarti Drugs Ltd. reported Q2 FY23 results below to expectation despite strong topline growth. Aarti Drugs reported lowest gross margins 30% YoY in last four years due to price correction of high cost inventory that includes raw material like DCDA and Ammonia.
Ebitda margins are 10.8% fell by 190 basis points due to low gross profitability and high fuel and power costs. The overall realisations have increased for top eight active pharma ingredient products along with moderation in inputs cost.
Revenue Rs 688 crore grew by 18.7% YoY majorly driven by commencement of new capacities in the diabetic segment.
Aarti Drugs' reported gross margins, ~30%, lowest in recent times despite fall in base chemical prices fell by 180 bps YoY. Reported profit after tax fell by 9% YoY due to low operating profitability and higher interest costs. Debt levels have increased as the company has increased capacity in diabetic and pain segment.
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