Aarti Industries Q2 Revenue Surges 73% Amid Expansion Push

Revenue grew to Rs 3,887 crore (+73% YoY) while PAT rose to Rs 169 crore (+60% YoY).

Reader Takeaway: Strong operational growth is countered by elevated debt, making the upcoming Rs 1,000 crore capital raise critical.

What just happened

Aarti Industries delivered a strong second quarter for FY27, marked by a 73% jump in revenue to Rs 3,887 crore. EBITDA also saw a healthy 44% increase to Rs 418 crore. The company officially commissioned Phase I of its Zone IV expansion on September 7, 2026, and secured a 10-year manufacturing agreement with a global major estimated to generate Rs 1,500 crore in revenue potential.

Why this matters

The company is balancing rapid capacity expansion with the need for financial stability. With net debt exceeding Rs 4,650 crore due to working capital requirements, the board has approved a Rs 1,000 crore capital raise. This move is designed to strengthen the balance sheet and support operations through FY29. Shareholders have already greenlit this proposal.

The backstory

The recent quarters have seen the company leverage its energy-linked portfolio to offset volatility in other segments. While the Dyes & Pigments and Agrochemicals segments provided stability, the PDA chain experienced temporary pressure from global overcapacity and dumping, which management expects to recover by Q3 FY27.

Risks to watch

Investors should monitor the impact of global crude oil price fluctuations on inventory costs. Furthermore, while the Zone IV project is a key growth driver, its successful ramp-up and stabilization remain vital. The margin pressure in Fluoro products and the PDA chain is a short-term headwind to track.

What to track next

The primary focus for the market will be the execution of the capital raise and the ramp-up schedule for the new Zone IV products. Management plans to introduce up to 10 new products in the current fiscal year, scaling to 25 products by FY28 across five chemistry blocks.