What is your view on the quarterly numbers of Aarti Drugs?

For the Q4FY22 ending in March 2022, Aarti Drugs reported a robust 38.4% growth in sales revenues at Rs694.27 crore on a consolidated basis. FY22 revenues for the 12 months were higher by 15.5% at Rs2,489 crore. The big top line driver was the growth in active pharma ingredients (APIs), which grew 46% with volumes growing 23% yoy. Formulations revenues grew more subdued at 7.8% while specialty chemicals were up 17%. Exports contributed 39% of the formulation revenues, although overall growth was tepid.

For the fourth quarter, Q4FY22, net profits were higher by 7.14% at Rs55.34 crore. The fall in profits can be largely attributed to the sharp spike in raw material costs. Q4FY22 EBITDA was up 9.1% at Rs89 crore while but the real villain of the piece was the EBITDA margins tapering to 351 basis points to 12.8% yoy. Net margins at 7.97% in Q4FY22 quarter was lower than the 10.29% in Q4FY21. The net cash flows got impacted by spike in trade receivables during the quarter.