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Aarti
Industries consolidated net sales declined 19.68% to Rs 1667.68 crore in Q3FY23
compared to Q3FY22. Operating profit
margin has declined from 42.86% to 17.31%, leading to 67.56% decline in
operating profit to Rs 288.68 crore. Raw
material cost as a % of total sales (net of stock adjustments) increased from
35.18% to 52.80%. Purchase of finished
goods cost rose from 3.67% to 7.30%.
Employee cost increased from 4.60% to 5.34%. Other expenses rose from 13.72% to 17.91%. Revenue from Operation for the previous
period i.e. quarter and nine months ended December 31, 2021, is inclusive of
accrual of termination fees of Rs. 631.25 crore arising on account of the
termination of a long term supply contract by the customer. Hence to that
extend the figure are not comparable.
Other
income rose 250% to Rs 0.28 crore. PBIDT
fell 67.53% to Rs 288.96 crore.
Provision for interest rose 99.28% to Rs 46.97 crore.
PBDT
fell 72.07% to Rs 241.99 crore.
Provision for depreciation rose 43.43% to Rs 82.1 crore.
Profit
before tax down 80.24% to Rs 159.89 crore.
Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 23.36
crore, compared to Rs 83.72 crore.
Effective tax rate was 14.61% compared to 10.35%.
Minority
interest was nil in both the periods.
Net profit attributable to owners of the company decreased 81.18% to Rs
136.53 crore.
Promoters’
stake was 44.16% as of 31 December 2022 compared to 44.21% as of 31 December
2021 .
For year-to-date (YTD)
results analysis
Net
sales (including other operating income) of Aarti Industries has increased
6.76% to Rs 4962.97 crore.
Operating
profit margin has declined from 31.37% to 16.87%, leading to 42.60% decline in
operating profit to Rs 837.19 crore. Raw
material cost as a % of total sales (net of stock adjustments) increased from
42.55% to 52.54%. Purchase of finished
goods cost rose from 3.82% to 5.00%.
Employee cost increased from 5.59% to 5.64%. Other expenses rose from 17.61% to
19.76%.
Other
income rose 6.25% to Rs 0.68 crore.
PBIDT fell 42.58% to Rs 837.87 crore.
Provision for interest rose 77.20% to Rs 135.22 crore.
PBDT
fell 49.19% to Rs 702.65 crore.
Provision for depreciation rose 23.74% to Rs 226.74 crore.
Profit
before tax down 60.33% to Rs 475.91 crore.
Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 79.36
crore, compared to Rs 159.19 crore.
Effective tax rate was 16.68% compared to 13.27%.
Minority
interest was nil in both the periods.
Net profit attributable to owners of the company decreased 61.88% to Rs
396.55 crore.
Promoters’
stake was 44.16% as of 31 December 2022 ,compared to 44.21% as of 31 December
2021 .
Effect of the approval
of Scheme of Arrangement
The
Scheme of Arrangement for the demerger of Pharma Business Undertaking from
Aarti Industries Limited (“the Company” or “the demerged company”) into its
wholly owned subsidiary Aarti Pharmalabs Limited (“the resulting company”), (
“the Scheme”) was approved by Honourable National Company Law Tribunal (NCLT),
Ahmedabad Bench on September 21, 2022 (which came into effect on October 17,
2022). Accordingly, all the assets and liabilities pertaining to the Pharma
Business Undertaking, including supporting manufacturing units, employees, cash
and cash equivalents and investments (including investments in subsidiaries and
joint ventures), as defined in the Scheme, stand transferred and vested into
the resulting company from its Appointed Date i.e. from July 01, 2021.
Pending
receipt of the NCLT approval for scheme of arrangement, financial statements of
the Company (before giving effect to scheme of arrangement) for the quarter and
nine months ended 31st December 2021, year ended 31st March 2022 were approved by the Board of Directors in their
meeting held on February 5, 2022 and May 27, 2022 respectively. Pursuant to the
approval of the said scheme, the company has recasted the historic audited
financials from the Appointed date of 1st July 2021 to carry out the changes
arising due to adoption of the scheme of arrangement. Hence the audited
financials, mentioned above, in respect of the historic periods have been
suitably recasted and thus are not comparable to the ones as announced in past
in respective board meetings.
Pursuant
to the approval of Scheme of Arrangement, Aarti Industries Limtied now has only
one segment, ie specaility chemical segment. Hence segment reporting was not
applicable.
Full year results
analysis
Net
sales of Aarti Industries has increased 35.05% to Rs 6085.51 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.
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%.
Operating
profit margin has jumped from 21.78% to 28.27%, leading to 75.25% rise in
operating profit to Rs 1,720.11 crore.
Raw material cost as a % of total sales (net of stock adjustments)
increased from 42.50% to 44.38%.
Purchase of finished goods cost fell from 5.36% to 4.30%. Employee cost decreased from 8.15% to 5.67%. Other expenses fell from 22.47% to 18.33%.
Other
income rose 10% to Rs 0.77 crore. PBIDT
rose 75.20% to Rs 1720.88 crore.
Provision for interest rose 18.48% to Rs 102.33 crore.
PBDT
rose 80.67% to Rs 1618.55 crore.
Provision for depreciation rose 6.52% to Rs 246.4 crore.
Profit
before tax grew 106.48% to Rs 1,372.15 crore.
Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 186.25
crore, compared to Rs 129.33 crore.
Effective tax rate was 13.57% compared to 19.46%.
Minority
interest decreased 98.04% to Rs 0.23 crore.
Net profit attributable to owners of the company increased 126.50% to Rs
1,185.67 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.
The
scrip trades at Rs 531
|
Aarti Industries : Consolidated
Results
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Particulars
|
2212 (03)
|
2112 (03)
|
Var.(%)
|
2212 (09)
|
2112 (09)
|
Var.(%)
|
2203 (12)
|
2103 (12)
|
Var.(%)
|
|
Net Sales
|
1,667.68
|
2,076.17
|
-20
|
4,962.97
|
4,648.79
|
7
|
6,085.51
|
4,506.10
|
35
|
|
OPM (%)
|
17.3
|
42.9
|
|
16.9
|
31.4
|
|
28.3
|
21.8
|
|
|
OP
|
288.68
|
889.8
|
-68
|
837.19
|
1,458.48
|
-43
|
1,720.11
|
981.53
|
75
|
|
Other Inc.
|
0.28
|
0.08
|
250
|
0.68
|
0.64
|
6
|
0.77
|
0.7
|
10
|
|
PBIDT
|
288.96
|
889.88
|
-68
|
837.87
|
1,459.12
|
-43
|
1,720.88
|
982.23
|
75
|
|
Interest
|
46.97
|
23.57
|
99
|
135.22
|
76.31
|
77
|
102.33
|
86.37
|
18
|
|
PBDT
|
241.99
|
866.31
|
-72
|
702.65
|
1,382.81
|
-49
|
1,618.55
|
895.86
|
81
|
|
Depreciation
|
82.1
|
57.24
|
43
|
226.74
|
183.24
|
24
|
246.4
|
231.31
|
7
|
|
PBT
|
159.89
|
809.07
|
-80
|
475.91
|
1199.57
|
-60
|
1372.15
|
664.55
|
106
|
|
Share of Profit/(Loss) from Associates
|
0
|
0
|
-
|
0
|
0
|
-
|
0
|
0
|
-
|
|
PBT before EO
|
159.89
|
809.07
|
-80
|
475.91
|
1199.57
|
-60
|
1372.15
|
664.55
|
106
|
|
EO Income
|
0
|
0
|
-
|
0
|
0
|
-
|
0
|
0
|
-
|
|
PBT after EO
|
159.89
|
809.07
|
-80
|
475.91
|
1199.57
|
-60
|
1372.15
|
664.55
|
106
|
|
Taxation
|
23.36
|
83.72
|
-72
|
79.36
|
159.19
|
-50
|
186.25
|
129.33
|
44
|
|
PAT
|
136.53
|
725.35
|
-81
|
396.55
|
1040.38
|
-62
|
1185.9
|
535.22
|
122
|
|
Minority Interest (MI)
|
0
|
0.05
|
-
|
0
|
0.21
|
-
|
0.23
|
11.75
|
-98
|
|
Net profit
|
136.53
|
725.3
|
-81
|
396.55
|
1040.17
|
-62
|
1185.67
|
523.47
|
127
|
|
EPS (Rs)*
|
#
|
#
|
|
#
|
#
|
|
32.7
|
14.4
|
|
|
Notes
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|
* EPS is on current equity of Rs 181.25 crore, Face value of Rs
5, Excluding extraordinary items.
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|
# EPS is not annualised
|
|
bps : Basis points
|
|
EO : Extraordinary items
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|
Figures in Rs crore
|
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Source: Capitaline Corporate Database
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