Aarti Drugs Q1: consol revenue +19%, EBITDA margin recovers to ~14%; PAT dips 7% on tax base

Aarti Drugs' Q1 FY27 consolidated revenue rose 19.0% YoY to ₹702.78 Cr, a strong topline print, though it eased 2.4% sequentially off a seasonally stronger Q4. Reported consolidated PAT of ₹50.13 Cr looks soft at first glance — down 7.1% YoY and 9.3% QoQ — but that is a tax-base artefact: the year-ago quarter carried a ~₹14.9 Cr earlier-year deferred-tax write-back that turned its tax line negative and inflated Q1 FY26 net profit. On a like-for-like pre-tax basis, profit surged — consolidated PBT climbed ~35% YoY to ₹69.24 Cr (₹71.32 Cr before a ₹2.09 Cr exceptional CWIP write-off) — and normalising the year-ago tax, adjusted PAT growth is roughly +33%.

The operational story is margin recovery. Operating (EBITDA) margin expanded to ~14.0% from 12.55% a year ago and 13.30% last quarter, lifting the business back to — and above — the 12-13% EBITDA band management targeted for early FY27 on the Q3 FY26 concall, en route to its stated 14-15% long-term goal. Net margin optically compressed to 7.1% (from 9.13%), but that is entirely the tax normalisation, not operating deterioration; a higher depreciation charge (₹18.46 Cr vs ₹14.72 Cr) from new-capacity commissioning also weighed on the net line. Standalone told a cleaner version — revenue +20.4% to ₹627.45 Cr and PAT +4.5% to ₹50.85 Cr — with the standalone/consolidated gap explained by the foreign subsidiaries (Pinnacle/Pharma Go/Tripharma Chile) posting a small ₹0.88 Cr net loss for the quarter.

The stock went into the print at ₹422.75, up 10% over the past month of trading.

Consolidated EPS ₹5.49 (vs ₹5.91 YoY) — audited with unmodified opinion

We found no published brokerage preview or consensus estimate for Aarti Drugs this quarter — the stock is thinly covered — so the print is best judged against the company's own guidance, which it met on both the revenue-growth and margin-recovery axes. Two developments frame next quarter: the ₹2.09 Cr CWIP write-off is a routine, non-recurring item, but the GPCB-directed plant closure (Jul 18, 2026) is a fresh compliance overhang whose duration and output impact are unresolved. No management press release was extracted into our records. With reported tax now normalised near 27-28%, headline PAT growth will stay structurally below PBT and revenue growth going forward — the pre-tax and margin trajectory, not the net figure, is where the recovery shows.