Aarti Industries Q4 & FY25 Performance Review: Key Highlights and Outlook for FY26

AARTI INDUSTRIES FY25 Results and Q4 Highlights – A Clear Look

Aarti Industries ended FY25 with strong volume growth, steady capex progress, and continued focus on cost control. Despite challenges like US tariffs and global uncertainties, the company stayed on track with its long-term goals.

Let’s break down the full-year and Q4 performance of AARTI INDUSTRIES in simple words.

How the Industry Looks Right Now

Starting FY26 with Caution

Management said that the start of FY26 is not smooth. There are global risks such as:

• Changing US tariffs
• Uncertain political situations
• Trade patterns shifting

Despite this, demand is slowly improving across different sectors.

What About the US Tariffs?

• Good News: Some products like MPD may benefit because of reduced competition from China.
• Bad News: Some chemicals like MMA could face pressure due to reduced margins in the US.
• Mixed Bag: Buyers are checking options outside China. This gives Indian players like AARTI INDUSTRIES a chance to grab market share.

Financial Performance at a Glance

Here’s how AARTI INDUSTRIES performed financially in FY25 and in Q4:

Full Year FY25 Financials

Particulars	Amount (₹ crore)	Growth (YoY)
Revenue	8,046	+15%
EBITDA	1,016	+3%
PAT (Net Profit)	331	Impacted by high depreciation & interest
Dividend	₹1/share	Final dividend for FY25

Q4 FY25 Snapshot

Particulars	Amount (₹ crore)	Growth (QoQ)
Revenue	2,214	+9%
EBITDA	266	+13%
PAT	96
Export Revenue	1,240	Higher freight cost

Strong Volume Growth in FY25

• Overall Growth: Volumes went up by 17% year-on-year in FY25.
• Q4 Performance:
  • Non-Energy Business grew by 14% QoQ.
  • Energy Business rose by 21% QoQ (mainly due to timing of shipments).

Segment-wise Insights

• Agrochemicals: Old inventory cleared, but pricing is still weak. Gradual recovery expected.
• Nitro Toluene, NCB, Ethylation: Demand recovered. New capacities helped volumes.
• DCB: Sluggish due to slow auto-sector.
• MMA: Pressure on prices, but company plans to improve volumes by reaching new regions.

Tariffs from the US – A Closer Look

Impact Type	Details
Positive	MPD segment may benefit due to reduced Chinese supply.
Neutral	Some products are exempt; buyers looking at India as an alternative.
Negative	MMA is affected badly, not viable in the US right now.

Management is changing its pricing strategies to manage these impacts better.

How AARTI INDUSTRIES is Managing Costs

To maintain margins, AARTI INDUSTRIES is doing the following:

• Steam Efficiency: Using back-pressure turbines to save steam and reduce cost.
• Hybrid Power Project (Phase-1): Lowering electricity cost and reducing carbon footprint.
• Better Yields: Improved efficiency in product chains.

Export Share Rises

• In Q4, exports formed 55% of total revenue.
• This increased freight cost, but also showed strong demand outside India.

Margin Outlook

• Company is not expecting major margin recovery in FY26.
• The focus is on growing volumes and using operations efficiently.

Growth Projects and Capex

FY25 Capex Summary

• AARTI INDUSTRIES spent ₹1,372 crore – as planned.

FY26 Capex Plans

• Capex expected to be around ₹950–1,000 crore.
• Main focus is on Zone-4, which includes:
  • Multipurpose Plants
  • Calcium Chloride Plant
• These will start operations in the second half of FY26.

Long-Term Guidance

Year	EBITDA Guidance (₹ crore)
FY28	₹1,800–2,200

Most of this growth will happen during FY26–FY27.

ESG and Sustainability Efforts

AARTI INDUSTRIES is working hard to become more environment-friendly and responsible:

• Awards: Got CDP Leadership Band, EcoVadis Gold (top 5% globally), and Responsible Care Logo.
• Green Power: Signed solar and hybrid energy agreements with Cleanmax and Prozeal.
• Start Date: Deliveries will begin from Calendar Year 2025 to FY27.
• Benefit: These steps will reduce future operating costs.

Balance Sheet and Working Capital

Working Capital

• In FY25, working capital days increased due to more exports and longer payment cycles.
• Target for FY26 is 70–80 days.

Debt Position

Particulars	Value (₹ crore)
Net Debt (FY25)	3,500
Expected Decline (FY26)	₹200–300

Tax

• FY26 tax rate will stay low because of high depreciation from new projects.

What’s Next in the Value Chain?

PDA Chain

• Expected to recover due to better demand from the US post tariffs.

NCB Chain

• Utilization is expected to rise with added pharma capacity.

Nitro Toluene & Ethylation

• Higher usage expected as new capacities stabilize.

Contracts

• Existing long-term contracts are performing as planned.
• New specialty contracts are growing gradually.

Management’s View on FY26

Main Focus Areas

• Increase volumes
• Cut costs
• Execute projects on time

Margin View

• No big recovery expected in margins.
• Volume growth and better plant usage will help profits.

Guidance

• Management did not share specific FY26 guidance.
• They repeated their 3-year goals.

Confidence Level

• Strong project pipeline and a healthy balance sheet give the company confidence for steady growth.

Key Risks to Watch

• Chinese Overcapacity: Still putting pressure on prices, especially in agrochemicals.
• US Tariffs: Situation keeps changing; not all products are impacted equally.
• Geopolitical Risks: These may slow down customer decisions.
• Export Freight Costs: These remain high, adding to cost pressures.

What Investors Asked in Q&A

• MMA Tariffs: These are not exempt; impacting sales in the US.
• Export Revenue in Q4: ₹1,240 crore – higher than the previous quarter.
• FY25 Growth Driver: Entirely driven by higher volumes, not pricing.
• FY28 PAT Estimate: Between ₹900–1,300 crore, if EBITDA reaches ₹1,800–2,200 crore.

AARTI INDUSTRIES is managing a tough business environment by focusing on what it can control — volumes, costs, and execution. While short-term margins may remain under pressure, the company is building for long-term success.

With solid capex execution, responsible ESG actions, and a growing export market, AARTI INDUSTRIES is staying committed to its growth targets for FY28. As global dynamics shift, the company’s diversified products and strong project pipeline can help it stay ahead.

FAQs – AARTI INDUSTRIES FY25

Q1: What was AARTI INDUSTRIES’ revenue in FY25?

The company reported ₹8,046 crore in revenue, which was a 15% rise from last year.

Q2: What led to profit pressure in FY25?

Higher depreciation and interest costs affected profit growth.

Q3: How much capex was spent in FY25?

AARTI INDUSTRIES spent ₹1,372 crore on capex projects during FY25.

Q4: What are the company’s growth plans for FY28?

They aim for ₹1,800–2,200 crore in EBITDA by FY28 through volume growth and better utilization.

Q5: Is AARTI INDUSTRIES impacted by US tariffs?

Yes. Some products benefit, while others like MMA face challenges. The overall impact is mixed.

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