Aarti Industries reported a strong Q2 FY27 performance with revenue at Rs 3,887 crore, a 73% YoY jump. Net profit rose to Rs 169 crore, marking a 60% growth. The company also announced a new 10-year supply agreement worth Rs 1,500 crore, signaling long-term revenue visibility despite current pressure from rising input costs.
Aarti Industries Q2 FY27 Profit Climbs 60% to Rs 169 Crore
Revenue grew 73% YoY to Rs 3,887 crore, while EBITDA improved 44% to Rs 418 crore.
Reader Takeaway: Strong revenue growth and a long-term supply contract are balanced against rising debt and input costs.
What just happened
Aarti Industries posted its Q2 FY27 results, showing significant expansion in both top and bottom lines. Revenue hit Rs 3,887 crore compared to Rs 2,250 crore in the same quarter last year. Net profit stood at Rs 169 crore, up from Rs 106 crore in Q2 FY26. The company also confirmed the commissioning of Phase I of its Zone IV project, which includes facilities for Calcium Chloride and PEDA.
Why this matters
The company signed a 10-year strategic manufacturing agreement with a global specialty chemicals player, estimated to generate Rs 1,500 crore in revenue. Operations for this contract are slated to begin in FY29 with customer-funded CAPEX. This provides long-term earnings visibility, while the recent capacity expansion in fuel additives (now 360 KTPA) is expected to support immediate production volumes.
Risks to watch
Management highlighted that rising input prices have increased working capital requirements, leading to higher finance costs. There is also caution regarding market volatility caused by weather patterns like El-Nino and weak monsoons. Additionally, margins in the Fluorochemicals segment remain under pressure, and the Polymer & Additives segment saw softness in the PDA chain.
Management Outlook
The company is targeting an EBITDA range of Rs 1,800-2,200 crore and maintains a long-term goal of keeping its Debt/EBITDA ratio below 2.5x. Strategic focus remains on cost optimization and ramping up newly commissioned units.
What to track next
Investors should monitor the integration of the Zone IV facility and how management balances increased debt levels with operational leverage in the coming quarters.