Shares of Aarti Drugs, a prominent small-cap player in the active pharmaceutical ingredient (API) space, were locked in the 20% upper circuit at Rs 420 after the company posted strong March quarter results and received favorable legal relief. The market cheered a solid performance, improved financials, and strategic progress across multiple fronts.
In Q4 FY24, Aarti Drugs reported revenue of Rs 624 crore, compared to Rs 560 crore in the same period last year. The company’s net profit rose to Rs 62 crore from Rs 47 crore a year ago, reflecting robust demand and efficient cost management.
Adding to the upbeat sentiment was a legal win. The company had filed a writ petition in the High Court of Judicature at Bombay to challenge an order passed by the CGST & Central Excise Authority. The court granted ad-interim relief, directing the authority not to take coercive recovery action based on the disputed order. This legal clarity further boosted investor confidence.
Aarti Drugs is a market leader in over 50 API molecules, covering therapeutic categories like antibiotics, antiprotozoals, anti-inflammatories, anti-diabetics, and anti-fungals. It is the world’s largest manufacturer of Fluoroquinolones, Tinidazole, Metronidazole Benzoate, Celecoxib, Nimesulide, and Ketoconazole, and ranks among the top producers of Metformin globally.
In Q3 FY25, the therapy-wise revenue mix was:
Antibiotics: 45%
Anti-Diabetic: 16%
Anti-Protozoal: 14%
Anti-Inflammatory: 12%
Anti-Fungal: 12%
The company’s global footprint continues to expand. The continent-wise revenue mix for FY24 was:
Asia: 57% (vs 54% in FY22)
Europe: 14% (vs 12% in FY22)
Africa: 11% (vs 7% in FY22)
Latin America: 10% (vs 15% in FY22)
North America: 8% (vs 13% in FY22)
To fuel its long-term growth, Aarti Drugs has undertaken a Rs 600 crore capex plan from FY22 over 4–5 years, primarily funded through internal accruals. The investments target greenfield specialty chemical projects, brownfield expansions, API debottlenecking, and backward integration. The company aims to reach a revenue range of Rs 4,200–4,500 crore over the next 5–6 years.
In the first nine months of FY25, the company spent Rs 136 crore in capex and expects a total outlay of Rs 200 crore for the year. A major project under this plan is the greenfield facility at Sayakha, Gujarat, which will begin trial production in Q4 FY25. It targets a capacity of 500+ tonnes per month (TPM) by FY25, scaling up to 1,600 TPM by FY26.
Following these strong financial results and the legal order in its favor, Aarti Drugs’ shares hit the upper circuit at Rs 420. However, it’s worth noting that over the past six months, the stock has corrected nearly 15% from its previous highs
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This article is for informational purposes only and should not be considered investment advice. Readers are advised to do their research or consult a qualified financial advisor before making any investment decisions. The author and the publisher are not responsible for any losses incurred based on the information provided in this blog.
