Aarti Drugs Limited (AARTIDRUGS)
Micro CapPharma stocks · Micro cap · NSE
Aarti Drugs Limited is a leading Indian API manufacturer with 50+ molecules across therapeutic categories, including antibiotics, antiprotozoals, and anti-inflammatories. The company has diversified into formulations via Pinnacle Life Science and specialty chemicals, with a global presence in over 100 countries.
One read, four checks
75+ is strong, 60-74 is usable, 45-59 is mixed, and below 45 needs caution. These are research lenses, not buy/sell instructions.
Weak fundamentals, while price trend supports entry. This looks more like momentum/speculation than a clean fundamental investment setup.
Fundamental lens: valuation, quality, growth, balance sheet, and cash flow.
low confidence · 0/0 claims checked
Timing lens: price trend and sector relative strength.
Rolling lens: recent quarterly delivery, not the latest single-result score.
Quarter ended 30 Jun 2026
Bad · 15/100PAT -7% YoY · Rev +19% YoY · margin expansion
| Metric | This quarter | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹703 Cr | +18.9% | -2.4% |
| EBITDA | ₹98 Cr | +32.4% | +2.1% |
| Operating margin | 14.0% | +100 bps | +100 bps |
| PAT | ₹50 Cr | -7.4% | -9.1% |
| PAT margin | 7.1% | -203 bps | -53 bps |
NDF means not disclosed in the current structured filing feed. It is intentionally not treated as zero.
Business & thesis
Growth engines, tailwinds/headwinds, and risk radar from management commentary
Business & thesis
Growth engines, tailwinds/headwinds, and risk radar from management commentary
Where growth can come from, and what can break the case
Q4 FY26 revenue grew 6% YoY to Rs. 721.1 Cr, with EBITDA flat at Rs. 96.6 Cr (-60 bps margin) and PAT declining 12% YoY. Sequentially, Q4 saw strong recovery: revenue +20%, EBITDA +72%, and margins +410 bps, driven by Sayakha scale-up. FY26 revenue +7%, PAT +16%.
While Q4 FY26 showed strong sequential recovery, YoY performance remains weak with flat EBITDA and declining PAT. Management attributes this to start-up losses and persistent API pricing pressure. The shift to regulated markets and export growth is positive, but sustained margin expansion from new capacities needs to be proven.
FY26 Segmental Revenue
Latest issuer-disclosed distribution across 4 reported categories.
Regulated Market Expansion
Regulated market contribution increased to 73% in FY26, with exports rising to 38%, supporting margin quality and earnings stability.
Formulations & Specialty Chemicals Growth
Diversification initiatives gained momentum, with Formulations and Specialty Chemicals segments growing 33% and 37% YoY respectively in FY26.
Sayakha Facility Scale-up
Strong execution progress in Sayakha facility, achieving ~1,000 TPM run-rate in March 2026, expected to enhance margin resilience.
Backward Integration
Sayakha facility manufactures key inputs (DMA, MMA, TMA) for APIs like Metformin, strategically aimed at backward integration.
Sayakha Amines Greenfield Facility
Operationalized greenfield facility at Sayakha for Di-, Mono-, and Tri-methylamines and derivatives, achieving ~1,000 TPM run-rate in March 2026.
Tarapur Salicylic Acid Greenfield Facility
Operationalized greenfield facility at Tarapur for Salicylic acid, with scale-up in progress.
Anti-diabetic (Metformin) Capacity Expansion
Current capacity ~1,400 TPM, scaling to 2,000–2,200 TPM. Additional 800 TPM brownfield expansion underway, ~500 TPM targeted for USFDA markets, expected completion in 6-8 months.
Antiprotozoals Capacity Increase
Enhancing position in the Indian market, aimed to increase production capacity by ~40%. Secured approval to market products in China.
Stabilizing API Pricing Trends
API pricing trends began stabilizing from September 2025 onwards, with recovery strengthening further during Q4 FY26.
Improving Business Mix
Continued improvement in business mix with increased regulated market and export contribution supports margin quality and earnings stability.
Diversified Product Basket & Customer Base
Company's broad product basket and diversified customer base mitigate concentration risks and improve business resilience.
Persistent Macroeconomic Headwinds
The company navigated a challenging industry environment with persistent macroeconomic headwinds.
Pricing Pressure in Select API Segments
Continued weakness in the domestic antibiotics market and sustained pressure on API realizations, especially in H1 FY26.
Elevated Raw Material & Logistics Costs
Sharp increase in key raw material prices and logistics costs, exacerbated by geopolitical tensions in West Asia, created additional cost pressures.
Start-up Losses from New Facilities
Year's profitability remained impacted by start-up losses associated with the new facilities.
Raw Material Price Volatility
Elevated raw material volatility and logistics costs, exacerbated by supply chain disruptions, created cost pressures.
API Pricing Pressure
Persistent pricing pressure in select API segments and continued weakness in the domestic antibiotics market impact profitability.
New Capacity Ramp-up & Utilization
Scale-up trajectory of new facilities like Sayakha could be impacted by factors like temporary ammonia shortages, affecting profitability.
Regulatory Filings & Approvals
Regulatory filings and approvals across EU and US markets are a strategic priority, implying dependence on timely clearances.
Management accountability
What management said, and what results must prove
Management accountability
What management said, and what results must prove
What management said, and what results must prove
Issuer guidance and extracted claims are tracked against later reported outcomes. Treat these as management statements, not IndiaPulse forecasts.
QoQ comparison is crucial due to management highlighting sequential recovery from new facility scale-up and stabilizing API prices. YoY is important for overall business health and comparison against previous year's performance, especially given the stated 'transition year' and 'challenging industry environment'.
Formulations Segment Growth
Formulations segment grew 33% YoY in FY26.
Specialty Chemicals Segment Growth
Specialty Chemicals segment grew 37% YoY in FY26.
Export Contribution
Exports contribution rose from 35% in FY25 to 38% in FY26.
Regulated Market Contribution
Regulated market contribution increased from 66% in FY25 to 73% in FY26.
Sayakha Facility Outlook
The Sayakha project has entered a more stable operating phase and is expected to progressively enhance margin resilience and backward integration benefits.
Strategic Priority for Regulated Markets
Regulatory filings and approvals across the EU and US markets remain a strategic priority, offering significant realization and margin upside.
Future Profitability & Return Ratios
Foundations built position the Company favorably for a meaningful improvement in profitability and return ratios over FY27 and beyond.
Numbers and claims to verify in the next filings
| Checkpoint | Current evidence | What to verify next |
|---|---|---|
| Sayakha Facility Utilization & Profitability | ~1,000 tonnes per month run-rate in March 2026. | Sustained ramp-up, margin contribution, and realization of backward integration benefits. |
| API Pricing Trends | Stabilizing from September 2025, strengthening in Q4 FY26. | Continued stabilization and recovery in realizations across key API segments. |
| Regulated Market Contribution | 73% in FY26. | Further increase in contribution and its positive impact on overall margins. |
| Anti-diabetic Capacity Expansion | 800 TPM brownfield expansion underway, 6-8 months completion. | Timely commissioning and ramp-up of USFDA-targeted capacity. |
Verification checkpoints are IndiaPulse research interpretation, not investment advice.
Trend score and candlestick chart
70Bullishfull bull SMA stack · SMA20 +1.8% / mo · MACD + · sector +2.2pp vs Nifty (3M)
Technical chart
AARTIDRUGSdaily · 1Y · AUTO+19.6%Daily technical trend read
Bullish setupTrend is constructive — long-term uptrend intact. RSI 59.
- Price > SMA20 > SMA50 > SMA200 — full bullish stack.
- SMA20 rising (~1.8% over last month) — short-term momentum positive.
- RSI(14) at 59 — rising, no extreme reading.
- MACD above signal but histogram contracting — bullish momentum cooling.
- 19% off 52W high · 35% above 52W low.
Mechanical read from the price + indicator series above. Not a recommendation — technical setups can reverse without warning, especially around earnings and macro events.
Valuation & score drivers
U-Score 35 · WATCHLIST · pillar breakdown, sector model, fair-value anchor
Valuation & score drivers
U-Score 35 · WATCHLIST · pillar breakdown, sector model, fair-value anchor
Fundamental score breakdown
WATCHLISTWhy this score?
Top U-Score contributors and drags from the latest stored fundamentals.
Positive drivers
- Piotroski is strong at 8/9.
- Cash flow contributes 7/10 to the score.
- Balance sheet contributes 10/15 to the score.
Main drags
- Fair-value margin of safety is negative at -354.8%.
- Quality is weaker at 3/20; verify the latest quarterly trend.
- Growth is weaker at 4/25; verify the latest quarterly trend.
Healthcare valuation: PE/EVEBITDA with regulatory and pipeline checks
Healthcare valuation needs both earnings quality and regulatory/pipeline context.
Stored run vs live recompute
This shows the stored score trend when snapshots exist, and also compares the latest stored nightly score with a live recompute from current fundamentals and price.
Score history
12 stored score snapshots. Latest stored move: +0 points.
Factor attribution
Modelled fair value
Trust score
Does management behaviour match later outcomes? Claim delivery, forensic breakdown, evidence depth
Trust score
Does management behaviour match later outcomes? Claim delivery, forensic breakdown, evidence depth
Trust asks: does management behaviour match later outcomes? Higher is better, but confidence and evidence depth matter as much as the number.
Healthy Trust: Claim history is still being built. It ranks around the 81st percentile of the scored universe and 73rd percentile within Pharma. No major sub-score weakness stands out.
High Trust Lite: Promoter pledge is zero.
Generally investable credibility. Look for weak sub-scores before increasing position size.
overall median 67 · Pharma: 73rd pctile, median 70 · Micro: 66th pctile, median 73
113 documents have extracted text, but claim history is not strong enough yet.
0 claims extracted · No contradicted claim yet
How to read this Trust Score
Healthy Trust · low confidenceRead Trust alongside U-Score, result consistency, and technical trend. A cheap stock with weak Trust needs a larger margin of safety; a high Trust score does not make an expensive stock attractive by itself.
Forensic breakdown
Read low sub-scores as due-diligence warnings, not automatic sell signals.
Trust positives
- ▸Promoter pledge is zero.
- ▸FCF yield is positive at 2.1%.
- ▸8 years of positive FCF.
- ▸4/4 latest quarters had positive YoY revenue growth.
Trust risks
- ▸No major Trust Lite risk flags.
Trust Lite uses financial behaviour only. Prefer claim-tested Trust when enough concall claims have later outcomes.
Financials
Full fundamentals table and 10-year revenue / profit / ROE history
Financials
Full fundamentals table and 10-year revenue / profit / ROE history
Fundamentals
Valuation
- P/E
- 20.40
- P/B
- 2.54
- EV/EBITDA
- 11.18
- Market Cap
- 3940.00Cr
Profitability
- ROE
- 13.40%
- ROCE
- 12.00%
- ROA
- 6.79%
- Dividend Y
- 0.46%
Growth (CAGR)
- Revenue 5Y
- 4.00%
- EPS 5Y
- -7.00%
- Revenue 3Y
- -2.00%
- EPS 3Y
- 5.00%
Balance Sheet
- Debt/Equity
- 0.37
- Interest Coverage
- 9.79×
- Altman Z
- 4.13
- Book Value
- 170.00
Cash Flow
- FCF Yield
- 2.06%
- FCF Positive Y
- 8/5
- OCF
- 254.00 Cr
- EPS TTM
- 20.95
Shareholding
- Promoter Hold
- 54.43%
- Promoter Pledge
- 0.00%
- Momentum 52W
- 52%
Financial History
Updated 5/9/2026
Revenue
₹ CrNet Profit
₹ CrReturn on Equity
%Peers
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Peers
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Peers
Business-comparable peers in Pharma — ranked by industry, sub-sector, theme-tag overlap, market cap, and U-Score similarity. Green cells mark the best available peer metric in this table.