Aarti Drugs Limited (AARTIDRUGS) share price
₹431.65 on NSE as of 2026-09-04. +1.36% on the day. market cap ₹3,940 Cr. P/E 20.6. 52-week range ₹319.75 to ₹525.35. Healthcare.
Aarti Drugs Q1 FY27: Operating Profit Up 33%, PAT Down 7%, and a Tax Refund That Explains Both
At a glance
Aarti Drugs booked ₹702.78 crore of sales in the June 2026 quarter against ₹590.51 crore a year ago — a 19% jump that arrived, per management, mostly on price rather than volume: aggregate volume growth of about 3.5%, aggregate price growth of 16–17% YoY. Operating profit went from ₹74.08 crore to ₹98.20 crore, a 33% move.
Then the bottom line went the other way. PAT came in at ₹50.17 crore versus ₹53.91 crore, down 7%. The arithmetic is sitting in plain sight one row above: last year's June quarter carried a tax line of negative ₹2.86 crore, which management attributes to a principal tax refund of roughly ₹15 crore. This year the tax line is ₹19.11 crore. Same company, same plants, ₹22 crore swing in what the taxman did.
Management also flags an exceptional item — a ₹2.09 crore write-off of capital work-in-progress relating to an administrative building at E1.
Elsewhere in the quarter: the Gujarat Pollution Control Board ordered the Saykha plant shut effective 15 days from July 18, then revoked that direction on July 31 with an interim environmental damage compensation of ₹10.2 lakh. Aarti Drugs also announced that Prakash M. Patil retires as Chairman on September 30, 2026.
An API maker whose profit line is currently being written by a tax department and a pollution board. The plants, meanwhile, did fine.
Introduction
Aarti Drugs Limited was incorporated in 1984 and is part of the Aarti Group of Industries. It manufactures and sells active pharmaceutical ingredients, pharma intermediates, specialty chemicals and formulations, and exports APIs and specialty chemicals to over 100 countries. ICRA notes the company was promoted by four chemical engineering graduates from UDCT Mumbai — the institution now called the Institute of Chemical Technology, whose Professor Bhaskar Thorat now sits on the board as an independent director. The alumni network has been thorough.
The recent corporate history is a construction site. Two greenfield facilities were operationalised — Sayakha amines and Tarapur salicylic acid — with total capex of around ₹600 crore now complete, per the company's own presentation. The Sayakha plant was commercialised on September 4, 2025, at 60 MT per day and a stated ₹220 crore investment. ICRA records that the dimethylamine plant there ran at 30–33% utilisation in Q3 FY2026, providing backward integration for metformin production.
The regulatory file has been busy too. The US FDA lifted Import Alert 66-40 in February 2025. In March 2025 the company received an administrative warning letter from SEBI, and in April 2025 a cautionary letter for regulatory non-compliance. In September 2025 the Maharashtra Pollution Control Board ordered voluntary closure of the chlorosulfonation process at the T-150 Tarapur unit following an HCl leak on September 8; the company stated no injuries and no material impact.
The largest outstanding item is fiscal. A CGST authority order in February 2025 sought ₹230.70 crore. The Bombay High Court granted interim relief in May 2025 and set the order aside on October 6, 2025, with the company stating no financial impact. In March 2026 the GST department filed a Special Leave Petition in the Supreme Court, keeping a potential IGST demand of ₹230.70 crore for FY2017-18 to FY2021-22 alive.
Business model
Aarti Drugs makes the powder that goes inside the pill someone else puts their brand on. Fifty-plus API molecules across antibiotics, antiprotozoals, anti-inflammatories, anti-diabetics and antifungals, plus 80+ finished products. The company is the largest manufacturer worldwide of Fluoroquinolones, Tinidazole, Metronidazole Benzoate, Celecoxib, Nimesulide and Ketoconazole, and among the top global producers of Metformin.
Read that list again. These are not glamorous molecules. Ketoconazole is anti-dandruff shampoo chemistry. Metronidazole treats the consequences of adventurous street food. Metformin is the world's most prescribed diabetes drug and has the pricing power of table salt. Aarti Drugs is world number one at things nobody writes a press release about, which is a real business model and a terrible cocktail party answer.
The segmental split in Q1 FY27: API 72.5%, Formulation 12.3%, Specialty Chemicals 11.7%, Intermediates & Others 3.5%. Within API, antibiotics take 35%, anti-protozoals 18.5%, anti-diabetics 18.2%, anti-inflammatories 11.9%, antifungals 10.2%.
Formulations run through Pinnacle Life Science Private Limited, a wholly owned subsidiary with a plant at Baddi, Himachal Pradesh, plus a USFDA-approved oncology formulation facility. Installed capacity: 3 billion tablets and 300 million capsules a year. Formulations revenue was ₹81.6 crore in the quarter against ₹75.8 crore, up 8%, with about 74% coming from exports.
The third leg — specialty chemicals and intermediates — is the vertically-integrated bit. Management describes Sayakha as strengthening backward integration and giving greater control over key intermediates for the anti-diabetic segment. Roughly 50% of the facility's capacity is captive. So the company is buying its own metformin inputs from itself, which shows up as gross margin rather than revenue, and makes the segment look smaller than it is.
Installed capacity across the group is 82,512 MT; production was 53,139 MT in FY26, of which 13,208 MT was captive. Fourteen manufacturing facilities, 6,876 MT of monthly capacity, 2,200+ employees, and a customer list that includes Cipla, Lupin, Abbott, Sanofi, Sun Pharmaceutical and Torrent — three of whom, awkwardly, also appear in the peer table below.
Quarterly results, balance sheet, cash flow, ratios, shareholding and the filings themselves are on the full page for Aarti Drugs Limited.
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