- 30 May 2022
- ICICIdirect Research
Aarti Industries reports poor operational performanceAARTIIND - 518 Change: 7.00 (1.37 %)
News: Total revenues grew by 45% YoY to Rs 1755.6 crore (I-direct estimate: Rs 1803.1 crore) amid 45.1% growth in Speciality chemicals to Rs 1629.4 crore. The pharma business recorded a revenue growth of 73.6% YoY to Rs 388.5 crore. EBITDA margins contracted by 220 bps YoY to 19.3%, leading to EBITDA growth of 30.3% YoY to Rs 339.1 crore against our estimates of Rs 391.8 crore. The poor operational performance is primarily due to higher COGS (+65% YoY). Net profit grew 42.3% YoY to 193.7 crore (I-direct estimate: Rs230.9 crore) mainly due to lower than anticipated operational performance.
Views: The company witnessed pressure in the gross margins due to higher RMAT cost for some materials which we expect to get normalise in the coming quarters. Going ahead, with expectations of more capex underway to improve the specialised portfolio share, one can expect meaningful bottom line growth in the long run.