Aarti Drugs
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
Aarti Drugs is currently positioned for stable growth, driven by management's focus on operational efficiency and strategic capacity expansions. The ramp-up of the Sayakha facility is enhancing backward integration, particularly for the anti-diabetic portfolio, which is expected to support revenue growth and margin expansion. Management's optimism is underpinned by a strong pipeline of products gaining approvals in regulated markets, with a target of achieving 10-15% volume growth and 13.5-14% EBITDA margins for FY27. However, the company faces challenges from global economic uncertainties and raw material cost volatility, which could impact pricing and demand dynamics. Vista's financial outlook reflects these developments, anticipating stable revenue growth and margins, with a target price of INR 393.67 over the next 12 months. The favorable regulatory environment for Indian CDMOs and the shift towards higher-value markets provide a supportive backdrop for Aarti's growth trajectory. Key opportunities include the successful commercialization of oncology products and increased export contributions, while watchpoints include the performance of the salicylic acid business and potential macroeconomic headwinds
Why We Like This Stock
- Successful ramp-up of the Sayakha facility enhances backward integration and margin resilience
- Strategic focus on regulated markets and exports is expected to drive revenue growth and improve margin quality
- Management targets 10-15% volume growth and 13.5-14% EBITDA margins for FY27, indicating strong operational momentum
Things To Watch Out For
- Global economic uncertainties and raw material cost volatility pose risks to pricing and demand
- The salicylic acid business remains a laggard, with production currently halted due to variable losses
- Potential impacts from geopolitical tensions could affect API prices and domestic demand for antibiotics
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 2,529 | 2,387 | 2,565 | 2,849 | 3,013 |
| Profit Before Tax (Cr.) | 236 | 212 | 211 | 270 | 281 |
| PBT Margin | 9.3% | 8.9% | 822.6% | 9.5% | 9.3% |
| Net Profit (Cr.) | 177 | 160 | 204 | 202 | 211 |
| Earnings Per Share | 19.3 | 17.5 | 22.4 | 22.2 | 23.1 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Axis Securities | ▲ Buy | 515 | 06-Aug-2026 |
Company Overview
Show Company Profile
Aarti Drugs Limited, through its subsidiaries, manufactures and markets active pharmaceutical ingredients (APIs), pharmaceutical intermediates, specialty chemicals, and formulations in India and internationally. The company offers aceclofenac, celecoxib, diclofenac sodium, diclodenac potassium, diclofenac diethylamine, diclofenac resinate, diclofenac epolamine, nimesulide, ciprofloxacin HCL, enrofloxacin base, gatifloxacin sesquihydrate, levofloxacin base, norfloxacin, ofloxacin, metronidazole, metronidazole benzoate, ornidazole, secnidazole, tinidazole, clopidogrel bisulphate, ticlopidine HCL, metformin HCL, pioglitazone HCL, teneligliptin, vildagliptin, fluconazole, ketoconazole, tolnaftate, zolpidem tartrate, niacin, raloxifene HCL, and acamprosate. It also provides benzene sulphonyl chloride, benzene sulphonic acid, methyl benzenesulfonate, sodium benzene sulfinate, para toluene sulphonyl chloride, methyl para toluenesulfonate, sodium para toluenesulfinate, para chlorobenzenesulfonyl chloride, formamide, calcium fluoride, potasium formate, benzenesulfonamide, ethyl p- toluenesulfonate, N,N',N'-tris-(4-toluene sulfonyl)-diethylenetriamine, ortho para toluene sulfonamides, ortho para toluene sulfonamides acid methyl ester, para chlorobenznesulfonamide, para toluenesulfonyl hydrazide, para toluenesulfonamide, and sodium benzenesulfonate. In addition, it offers pharma intermediate products, which includes Celecoxib, Ciprofloxacin, Clopidogrel, Diclofenac, Ketoconazole, Nimesulide, Raloxifene, Tinidazole, and Zolpidem. Further, the company develops drugs for antifungal, cardiovascular, and antidiabetic therapeutic areas, as well as non-steroidal anti-inflammatory drugs. The company was incorporated in 1984 and is headquartered in Mumbai, India.