Aarti Industries jumps as Q2 profit doubles

Aarti Industries (AIL) surged 5% to Rs 410.20 after delivering a robust Q2 FY26 performance marked by sharp improvements in profitability and operational efficiency.

Revenue rose 26% year-on-year and 21% sequentially to Rs 2,250 crore, supported by higher volumes?especially in the energy segment, which jumped 118% YoY and 48% QoQ. Non-energy volumes also rose 17% YoY and 15% QoQ, benefiting from improved demand and realisation of deferred bulk shipments from Q1.

EBITDA climbed 44% YoY and 36% QoQ to Rs 291 crore, reflecting improved capacity utilisation, better cost optimisation, and the benefits of scale. Profit after tax (PAT) more than doubled, surging 102% YoY and 150% sequentially to Rs 106 crore, driven by stronger operating leverage, lower costs, and exceptional income of Rs 29 crore related to favourable tax orders.

Margins, however, remain under pressure due to elevated input prices and U.S. trade restrictions affecting select product lines such as dyes and polymers. The company reported CAPEX of Rs 267 crore during the quarter, with FY26 spending expected to remain below Rs 1,000 crore, underscoring AIL?s focus on disciplined capital deployment.

With raw material prices stabilising and logistics costs easing, AIL expects a steady improvement in operating margins through FY27. The company anticipates growth to be driven by new capacity ramp-ups, product diversification, and expanding global partnerships.

AIL reaffirmed its growth outlook, targeting EBITDA between Rs 1,800 crore and Rs 2,200 crore by FY28, driven by consistent volume growth supported by capacity expansion, operating leverage, and cost optimisation initiatives. The company expects capex of around Rs 1,000 crore in FY26 and aims to maintain a Debt/EBITDA ratio below 2.5x with a return on capital employed (ROCE) above 15%, underscoring its focus on sustainable and efficient growth over the next three years.

AIL is one of the world's leading speciality chemical companies.

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