SYNOPSIS:
Prabhudas Lilladher forecasts Aarti Industries’ Q2 FY26 PAT rising 69 percent QoQ to Rs. 72.5 crore, supported by 20 percent revenue growth, though MMA realisations decline may pressure margins.
Shares of one of the world’s leading speciality chemical companies, combining process chemistry with scale-up engineering competence, are in focus on the stock exchanges, as investment brokerage firm Prabhudas Lilladher expects the company’s net profit to rise by 69 percent QoQ and 42 percent YoY in Q2 FY26.
With a market cap of Rs. 13,800 crores, at 09:44 a.m., the shares of Aarti Industries Limited were trading in the green at Rs. 381.15 during Friday’s trading session, up by around 0.2 percent on BSE, as against its previous closing price of Rs. 380.3. The stock has delivered negative returns of over 27 percent in one year, but has gained by around 2 percent in the last one month.
What’s the News
Prabhudas Lilladher projects Aarti Industries Limited to report Revenue from Operations of Rs. 2,011.2 crore in Q2 FY26, reflecting a 20.1 percent quarter‑on‑quarter (QoQ) and 23.5 percent year‑on‑year (YoY) growth. The brokerage further expects the company’s Adjusted Net Profit to reach Rs. 72.5 crore, up approximately 69 percent QoQ and 42 percent YoY.
EBITDA is forecasted at Rs. 245 crore, marking a 16 percent QoQ and 25 percent YoY increase. Meanwhile, EBITDA margins are projected at 12.2 percent, improving by 14 basis points (bps) YoY but contracting by 42 bps QoQ.
Prabhudas Lilladher noted that export volumes are rising, supported by delayed Mono-Methyl Aniline (MMA) shipments from the previous quarter. However, average realisations for MMA have declined from $2.5/kg to $1.6/kg, which may impact profitability. Overall, topline growth is expected both YoY and sequentially, though margins are likely to see a modest sequential contraction of ~42 bps.
Financials & More
Aarti Industries reported a marginal decline in its revenue from operations, showing a year-on-year decrease of over 9 percent from Rs. 1,851 crores in Q1 FY25 to Rs. 1,675 crores in Q1 FY26. Likewise, its net profit decreased during the same period from Rs. 137 crores to Rs. 43 crores, representing a huge fall of nearly 69 percent YoY.
For FY26, the company’s capex is projected at around Rs. 1,000 crore. Over the next three years, it aims for an EBITDA range of Rs. 1,800-2,200 crore, targeting a Debt/EBITDA ratio below 2.5x and a Return on Capital Employed (ROCE) exceeding 15 percent.
Aarti Industries Limited is engaged in the business of manufacturing and dealing in speciality chemicals and intermediates, with key value chains including Nitro Chloro Benzenes, Di-Chlorobenzenes, Phenylenediamines, Nitro Toluene Value Chain and Sulphuric Acid & downstream.
The company operates 16 manufacturing facilities, 2 advanced R&D centres, 8 zero‑liquid discharge plants, and 5 cogeneration power plants, serving over 1,100 domestic and international customers across 60 exporting nations.
Written by Shivani Singh
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