Q1 FY 27 Earnings Call Transcript

August 17, 2026 To, To, Listing/ Compliance Department Listing/ Compliance Department BSE LTD. National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, “Exchange Plaza”, Plot No. C/1, Dalal Street, G Block, Bandra Kurla Complex, Mumbai - 400 001 Bandra (E), Mumbai – 400 051 SCRIP CODE: 543748 SYMBOL: AARTIPHARM Dear Sir/Madam, Sub: Transcript for the Q1 FY27 Earnings Conference Call Ref: Regulation 30 of the SEBI (LODR) Regulations 2015 Please find enclosed the transcript of the Earnings Conference Call held on August 10, 2026, regarding the Company's Unaudited Financial Results (Standalone and Consolidated) of the Company for the first quarter ended June 30, 2026. Kindly take the same on your records. Thanking you, Yours faithfully, For AARTI PHARMALABS LIMITED JEEVAN MONDKAR COMPANY SECRETARY AND LEGAL HEAD ICSI M. NO. A22565 Encl.: a/a. “Aarti Pharmalabs Limited Q1 FY27 Earnings Conference Call” August 10, 2026 MANAGEMENT: MR. RASHESH GOGRI – CHAIRMAN – AARTI PHARMALABS LIMITED MR. PIYUSH LAKHANI – CHIEF FINANCIAL OFFICER – AARTI PHARMALABS LMITED MODERATOR: MS. JULIE MEHTA – 360 ONE CAPITAL MARKETS PRIVATE LIMITED Page 1 of 19 Aarti Pharmalabs Limited August 10, 2026 Moderator: Ladies and gentlemen, good day, and welcome to the Aarti Pharmalabs Limited Q1 FY '27 Earnings Conference Call hosted by 360 ONE Capital Markets Private Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Julie Mehta from 360 ONE Capital Markets Private Limited. Thank you, and over to you. Julie Mehta: Good afternoon, everyone. On behalf of 360 One Capital, we welcome you all to Q1 FY '27 Earnings Conference Call of Aarti Pharmalabs Limited. From the management side, we have with us Mr. Rashesh Gogri, Chairman; and Mr. Piyush Lakhani, Chief Financial Officer. I would now hand over the conference call to Rashesh sir for his opening remarks, post which we will open the session for Q&A. Thank you, and over to you, sir. Rashesh Gogri: Yes. Good evening, everyone, and welcome to Aarti Pharmalabs earnings call for the first quarter of the financial year 2027. I appreciate you taking the time to join us today as I walk you through our performance for Q1 FY '27 and share key business developments. Let me start with the overview of our stand-alone financial Q1 FY '27. The top line was INR535 crores as compared to INR375 crores a year back, showing an increase of 42% Y-o- Y. The EBITDA was INR133 crores as compared to INR95 crores in the corresponding period of the previous year. This is an increase of 40% Y-o-Y. The profit after tax for the Q1 FY '27 was INR71 crores as compared to INR48 crores a year back, which was 49% increase Y-o-Y. Now let me present a few business highlights. Aarti Pharmalabs operates across 3 key verticals: Xanthine derivatives, API and Intermediates and CDMO/CMO services. Xanthine Derivatives segment contributed to 57% of our turnover in this current quarter and it recorded the highest ever quarterly sales of Xanthine derivatives. The volume split was 74% beverages customers and 26% other customers. In terms of geographical split, the sales was skewed towards exports, which contributed to 79% and the local sales was 21%. The API and Intermediate business stood at 30% of the turnover. The sub-segment-wise breakup was 58% regulated market, 14% rest of the world market and 28% non-regulated market. While we are working on the development of new molecules with the medium-term patent expiry, the pricing pressures in existing molecules remain. And to mitigate these headwinds, we are starting a special project towards process intensification and cost reduction of existing products. The third segment, CDMO/CMO, has contributed to 7% of the revenue in this quarter. We are presently working with 22 customers and the number of active projects is now 57, of which 37 projects are in the commercial stages, while 20 are under different developmental stages, Page 2 of 19 Aarti Pharmalabs Limited August 10, 2026 both at customer end. Similar to previous years, the CDMO/CMO revenue is likely to be skewed towards the second half of this financial year. The remaining turnover of 6% is categorized as others that includes trading sales, export incentives and other sales. Now I will share the update on the capex. I'm happy to share that Q1 FY '27 marks the completion of a couple of expansion projects. In Q1 FY '27, we completed debottlenecking of the steroid block at Unit 4, Tarapur, which is our USFDA approved API production site. As a result, now we have an additional 33% of our existing steroidal capacity enhanced for this block. The additional capacity for Xanthine derivatives, started by the end of the Q1, has also been commercialized and the trial production is ongoing for the final product. The incremental capacity will be ramped up through the next few quarters and we can reach 80% plus capacity utilization by FY '28. Both phases of Atali Block 1 with 440 kL reactor capacity will become fully operational in Q2 FY '27. Atali is majorly engaged in manufacturing of CDMO/CMO intermediate steps. Additionally, we have announced a capex of INR 149 crores towards Block 2 at Atali with 400+ kL reactor capacity. Groundbreaking is expected in Q3 FY '27 and the completion time line is around 12 to 15 months. This block, being dedicated towards specific CDMO projects, is more cost-effective vis-a-vis multipurpose production block. This block marks another milestone towards our goal of INR 1,000 crores CDMO/CMO revenue. Conclusively, the business looks promising and offers substantial long-term value creation for all our stakeholders. Our strategic focus and operational excellence position us well to capitalize on emerging opportunities in the pharmaceutical sector and deliver sustained growth in the coming quarters. Now I request moderator to open the forum for Q&A session. Thank you. Moderator: Thank you. The first question is from the line of Dhruv from Vyomara Capital. Please go ahead. Dhruv: Am I audible? Rashesh Gogri: Yes. Dhruv: Congratulations on the good set of numbers. So my first question is on the Xanthine business. Could you please share the current domestic versus the export revenue split in the business? And how is the trend going on like as we have increased the capacity? And where do we stand in terms of the global market share, if you can share? Rashesh Gogri: No. Our current split in the current quarter is 80%, 79% export and 21% local revenue share. And I think going forward also as we ramp up our capacity utilization, the local market Page 3 of 19 Aarti Pharmalabs Limited August 10, 2026 remains relatively smaller. Our share in exports will continue to be higher. Yes. And in terms of utilization, I think we -- as I mentioned, towards the end of next year, we will have more than 80% capacity utilization. Dhruv: Okay, sir. I also ask regarding the global market share, if you can share? Rashesh Gogri: So we are aiming towards 20% to 25% global market share with the enhanced capacity in the next 2 years' time. Dhruv: Okay. So my second question is that within Xanthine, is the primary competition largely China-based or it's like fragmented globally? And roughly, what share of the global capacity would you attribute to Chinese producers? Rashesh Gogri: China is a major competitor for Xanthine. I think the overall capacity of Xanthine chemistry in China is quite significant. And they -- barring few producers in India and Europe, I think largely almost overall competition, 80%, 90% still is in China only. Dhruv: Okay. Last question. What would you consider a normalized through the cycle EBITDA margin range for the Xant [Showing first 8,000 characters — download PDF for full document]