Aarti Industries, a prominent player in India’s specialty chemicals market, posted a tough Q1 set of results for FY 2025, highlighting headwinds in worldwide demand and increased competitive intensity. Consolidated net profit of the company for the quarter dropped 68.6% year on year at ₹43 crore, a drastic fall from ₹137 crore for the same period last year. Revenue from operations also fell 9.5% at ₹1,676 crore versus ₹1,851 crore a year ago.
Numbers decline, followed by shares
This decline in financial numbers was also reflected in operating performance. The EBITDA declined sharply by 30.5% to ₹212 crore from ₹305 crore earlier. Consequently, the EBITDA margin contracted to 12.65% from 16.44%. The company assigned this margin squeeze to chronic global oversupply, poor demand in the key markets, and cutthroat competition from overseas, particularly Chinese players.
- The company’s Sales are down by 9.45% YoY, 14% QoQ
- Net Profit is down by 68.61% YoY, 55% QoQ
On a standalone basis too, the figures told the same story: net revenue was ₹1,845 crore (compared to ₹1,991 crore year-on-year), and net profit was ₹44 crore (compared to ₹138 crore last year). Earnings per share fell to ₹1.20 from ₹3.80 last year, and the operating margin was 11.6%, compared to 15.3%.
33,000 shares to Employees
Operationally, Aarti Industries continued to invest in growth and people, issuing over 33,000 equity shares under its employee stock option plan in the quarter. The credit profile of the company remained steady, with leading agencies reaffirming current ratings in spite of the deteriorated profitability.
Management hopeful in future
In spite of the difficult quarter, management highlighted their continued initiatives to expand strategic capacity, diversify their product portfolio, and enhance cost efficiencies to ride out volatile market conditions. Aarti Industries is set for future revival, with observers keenly waiting to see how it will ride out these headwinds and revert to growth.
As a whole, Q1 FY25 results reflect a volatile situation for Aarti Industries, with profits and revenues falling in all the major financial parameters, but also reflecting the resilience and strategic intent of the company for a possible turnaround in future quarters.
