- 11 Aug 2022
- ICICIdirect Research
Aarti reportts Q1FY23 numbersAARTIIND - 518 Change: 7.00 (1.37 %)
News: Aarti industries reported revenue growth of 49.8% YoY to Rs1972 crore (I-direct estimate: Rs 1822.9 crore) amid 46% growth in Speciality chemicals to Rs1765.6 crore. The pharma business recorded a revenue growth of 30% YoY to Rs407.3 crore. Gross margins contracted by 936 bps YoY to 44.3%. EBITDA margins contracted by 511 bps YoY to 18.7%, leading to EBITDA growth of 17.7% YoY to Rs369.3 crores against our estimates of Rs333.6 crores. The poor operational performance is primarily due to higher COGS (+80% YoY). Net profit grew 14.7% YoY to Rs189 crores (I-direct estimate: Rs167 crores) mainly due to subdued operational performance.
View: Higher crude led increase in the benzene and other intermediate prices. The company has been passing on input inflation since last few quarters, which has led higher topline growth. However lag in passing on entire input inflation impacting operational performance since last few quarters. We expect once there will be stability in the crude, we can see sustainability in the operational performance of the company.