Capitaline

Results 11-Aug-22

Analysis

Aarti Industries

OP up 18%

Aarti Industries consolidated net sales increased 49.76% to Rs 1972.02 crore in Q1FY23 compared to Q1FY22. Sales of Speciality Chemicals segment has gone up 43.81% to Rs 1,765.59 crore (accounting for 81.26% of total sales). Sales of Pharmaceuticals segment has gone up 47.76% to Rs 407.30 crore (accounting for 18.74% of total sales). Inter-segment sales rose Rs 186.59 crore to Rs 200.87 crore.

Profit before interest, tax and other unallocable items (PBIT) has jumped 14.71% to Rs 326.68 crore. PBIT of Speciality Chemicals segment rose 7.73% to Rs 250.45 crore (accounting for 76.67% of total PBIT). PBIT of Pharmaceuticals segment rose 45.67% to Rs 76.23 crore (accounting for 23.33% of total PBIT).

PBIT margin of Speciality Chemicals segment fell from 18.94% to 14.19%. PBIT margin of Pharmaceuticals segment fell from 18.98% to 18.72%. Overall PBIT margin fell from 18.94% to 15.03%.

Operating profit margin has declined from 23.83% to 18.73%, leading to 17.69% rise in operating profit to Rs 369.31 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 46.52% to 54.16%. Purchase of finished goods cost fell from 4.06% to 3.27%. Employee cost decreased from 6.96% to 5.91%. Other expenses fell from 20.52% to 18.67%.

Other income rose 660% to Rs 0.38 crore. PBIDT rose 17.79% to Rs 369.69 crore. Provision for interest rose 30.09% to Rs 49.81 crore.

PBDT rose 16.08% to Rs 319.88 crore. Provision for depreciation rose 26.13% to Rs 86.51 crore.

Profit before tax grew 12.75% to Rs 233.37 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 44.3 crore, compared to Rs 41.9 crore. Effective tax rate was 18.98% compared to 20.24%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 14.69% to Rs 189.07 crore.

Promoters’ stake was 44.19% as of 30 June 2022 compared to 44.90% as of 30 June 2021.

Full year results analysis

Net sales (including other operating income) of Aarti Industries has increased 55.34% to Rs 6999.96 crore. Sales of Speciality Chemicals segment has gone up 62.60% to Rs 6,619.38 crore (accounting for 83.59% of total sales). Sales of Pharmaceuticals segment has gone up 36.50% to Rs 1,299.93 crore (accounting for 16.41% of total sales). Inter-segment sales rose Rs 517.18 crore to Rs 919.35 crore.

Operating profit margin has jumped from 21.78% to 27.55%, leading to 96.51% rise in operating profit to Rs 1,928.81 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 42.50% to 45.01%. Purchase of finished goods cost fell from 5.36% to 3.95%. Employee cost decreased from 8.15% to 6.09%. Other expenses fell from 22.47% to 18.39%.

Other income rose 14.29% to Rs 0.8 crore. PBIDT rose 96.45% to Rs 1929.61 crore. Profit before interest, tax and other unallocable items (PBIT) has jumped 91.60% to Rs 1,834.26 crore. PBIT of Speciality Chemicals segment rose 116.24% to Rs 1,613.93 crore (accounting for 87.99% of total PBIT). PBIT of Pharmaceuticals segment rose 4.44% to Rs 220.33 crore (accounting for 12.01% of total PBIT).

PBIT margin of Speciality Chemicals segment rose from 18.33% to 24.38%. PBIT margin of Pharmaceuticals segment fell from 22.15% to 16.95%. Overall PBIT margin rose from 19.06% to 23.16%.

Provision for interest rose 32.33% to Rs 114.29 crore. Loan funds declined from Rs 2,492.12 crore as of 31 March 2021 to Rs 2,217.62 crore as of 31 March 2022. Inventories rose to Rs 1,411.33 crore as of 31 March 2022 from Rs 935.68 crore as of 31 March 2021. Sundry debtors were higher at Rs 1,390.50 crore as of 31 March 2022 compared to Rs 793.73 crore as of 31 March 2021. Cash and bank balance declined from Rs 412.32 crore as of 31 March 2021 to Rs 256.84 crore as of 31 March 2022. Investments rose to Rs 73.13 crore as of 31 March 2022 from Rs 63.52 crore as of 31 March 2021 .

PBDT rose 102.63% to Rs 1815.32 crore. Provision for depreciation rose 24.73% to Rs 288.52 crore. Fixed assets increased to Rs 5,908.12 crore as of 31 March 2022 from Rs 4,890.39 crore as of 31 March 2021. Intangible assets increased from Rs 0.10 crore to Rs 0.19 crore.

Profit before tax grew 129.75% to Rs 1,526.80 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 219.38 crore, compared to Rs 129.33 crore. Effective tax rate was 14.37% compared to 19.46%.

Minority interest decreased 98.04% to Rs 0.23 crore. Net profit attributable to owners of the company increased 149.72% to Rs 1,307.19 crore.

Equity capital increased from Rs 87.12 crore as of 31 March 2021 to Rs 181.25 crore as of 31 March 2022. Per share face Value remained same at Rs 5.00.

Promoters’ stake was 44.19% as of 31 March 2022 ,compared to 46.82% as of 31 March 2021 .

Cash flow from operating activities decreased to Rs 470.76 crore for year ended March 2022 from Rs 872.71 crore for year ended March 2021. Cash flow used in acquiring fixed assets during the year ended March 2022 stood at Rs 1,306.57 crore, compared to Rs 1,314.82 crore during the year ended March 2021.

The scrip trades at Rs 817

Aarti Industries : Consolidated Results
Particulars	2206 (03)	2106 (03)	Var.(%)	2203 (12)	2103 (12)	Var.(%)
Net Sales	1,972.02	1,316.76	50	6,999.96	4,506.10	55
OPM (%)	18.7	23.8		27.55	21.8
OP	369.31	313.81	18	1,928.81	981.53	97
Other Inc.	0.38	0.05	660	0.8	0.7	14
PBIDT	369.69	313.86	18	1,929.61	982.23	96
Interest	49.81	38.29	30	114.29	86.37	32
PBDT	319.88	275.57	16	1,815.32	895.86	103
Depreciation	86.51	68.59	26	288.52	231.31	25
PBT	233.37	206.98	13	1526.8	664.55	130
Share of Profit/(Loss) from Associates	0	0	-	0	0	-
PBT before EO	233.37	206.98	13	1526.8	664.55	130
EO Income	0	0	-	0	0	-
PBT after EO	233.37	206.98	13	1526.8	664.55	130
Taxation	44.3	41.9	6	219.38	129.33	70
PAT	189.07	165.08	15	1307.42	535.22	144
Minority Interest (MI)	0	0.22	-	0.23	11.75	-98
Net profit	189.07	164.86	15	1307.19	523.47	150
EPS (Rs)*	#	#		36.1	14.4
Notes
* EPS is on current equity of Rs 181.25 crore, Face value of Rs 5, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
EO : Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database

Aarti Industries : Consolidated Segment Results
	% of (Total)	2206 (03)	2106 (03)	Var.(%)	% of (Total)	2203 (12)	2103 (12)	Var.(%)
Sales
Speciality Chemicals	81	1,765.59	1,227.70	44	84	6,619.38	4,070.98	63
Pharmaceuticals	19	407.3	275.65	48	16	1,299.93	952.3	37
Total Reported Sales	100	2,172.89	1,503.35	45	100	7,919.31	5,023.28	58
Less: Inter segment revenues		200.87	186.59	8		919.35	517.18	78
Net Sales		1,972.02	1,316.76	50		6,999.96	4,506.10	55
PBIT
Speciality Chemicals	77	250.45	232.47	8	88	1,613.93	746.37	116
Pharmaceuticals	23	76.23	52.33	46	12	220.33	210.96	4
Total PBIT	100	326.68	284.8	15	100	1,834.26	957.33	92
Less : Interest		49.81	38.29	30		114.29	86.37	32
Add: Other un-allcoable		-43.5	-39.53	-10		-193.17	-206.41	6
PBT		233.37	206.98	13		1,526.80	664.55	130

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