AARTIINDNSEQ2 FY26November 14, 2025

Aarti Industries Limited

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12analyst exchanges

0executives

Key numbers — 35 extracted

Rs. 2,250 crore

performances. Let me now move to our financial performance for the quarter: Revenue stood at Rs. 2,250 crore, an increase of 21% Q-o-Q driven by improved volumes across key product categories. EBITDA surg

21%

ve to our financial performance for the quarter: Revenue stood at Rs. 2,250 crore, an increase of 21% Q-o-Q driven by improved volumes across key product categories. EBITDA surged to Rs. 292 crore,

Rs. 292 crore

ncrease of 21% Q-o-Q driven by improved volumes across key product categories. EBITDA surged to Rs. 292 crore, marking a 36% quarter-on-quarter increase, primarily fuelled by improved capacity utilizatio

36%

en by improved volumes across key product categories. EBITDA surged to Rs. 292 crore, marking a 36% quarter-on-quarter increase, primarily fuelled by improved capacity utilization and ongoing c

Rs. 106 crore

pacity utilization and ongoing cost optimization initiatives. As a result, Profit After Tax was Rs. 106 crore, an increase of about 150% Q- o-Q, reflecting improved operating leverage and after factoring in t

150%

optimization initiatives. As a result, Profit After Tax was Rs. 106 crore, an increase of about 150% Q- o-Q, reflecting improved operating leverage and after factoring in the exceptional items that

Rs. 267 crore

nal items that you may have seen in our published financial results. CAPEX for the quarter was at Rs. 267 crore and is expected to be around Rs. 1,000 crore for the year FY26, as guided earlier, reflecting con

Rs. 1,000 crore

shed financial results. CAPEX for the quarter was at Rs. 267 crore and is expected to be around Rs. 1,000 crore for the year FY26, as guided earlier, reflecting continued capital discipline Despite short-ter

rs,

blenders. Despite ongoing competitive pricing challenges from both China and domestic Indian players, our strategy focuses on market expansion: growing the MMA customer base and extending our geograph

40%

hese projects, if you can also give a view of which end- categories, because today, we have almost 40%, 45% exposure to the energy segment and then agro is around 20%. So at the steady state, say, a

45%

projects, if you can also give a view of which end- categories, because today, we have almost 40%, 45% exposure to the energy segment and then agro is around 20%. So at the steady state, say, after

20%

es, because today, we have almost 40%, 45% exposure to the energy segment and then agro is around 20%. So at the steady state, say, after all these are commissioned any rough idea about what would be

Guidance — 20 items

Suyog Kotecha

opening

“I will share the industry trends, key highlights and updates from our Q2 FY26 performance.”

Suyog Kotecha

opening

“Despite these market pressures, we delivered sequential growth predominantly driven by proactive market diversification, smart investments in innovation, and disciplined project execution.”

Suyog Kotecha

opening

“Over the medium term, we expect policy clarity and normalization of trade flows to restore a more balanced operating environment.”

Suyog Kotecha

opening

“1,000 crore for the year FY26, as guided earlier, reflecting continued capital discipline Despite short-term uncertainties, we remain firmly committed to achieve our FY28 EBITDA aspirations and executing our strategic plan focused on cost optimization; volume ramp led operating leverage and monetisation of ongoing capex projects.”

Suyog Kotecha

opening

“On Capacities front, while we have achieved peak utilisation of the newly expanded capacities for MMA, we are in the process of executing various debottlenecking initiatives which will support us to scale up our volumes further from Q4 FY26.”

Suyog Kotecha

opening

“Our Zone 4 expansion project continues to progress as planned, with newer capacities expected to come online over the next few quarters.”

Suyog Kotecha

opening

“A new multipurpose plant (MPP) within Zone 4 is expected to be commissioned in Q4 FY26, enhancing flexibility in product development.”

Suyog Kotecha

opening

“As one of the growth projects in forward integration, we are set to commission a new 4,000 TPA PEDA (2-Phenyl Ethyl Diethyl Aniline) project in Zone 4, in Jhagadia.”

Suyog Kotecha

opening

“We remain committed to delivering on our medium-term financial objectives while focusing on creating long-term value for all our stakeholders.”

Arun Prasath

“So is it safe to assume that when, say, probably the energy-related mix goes down, we will have better margins going forward?”

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Risks & concerns — 11 flagged

The tariff represents a near-term headwind for the Indian chemical sector, temporarily eroding competitiveness against European as well as Chinese suppliers to an extent.

— Suyog Kotecha

At the macro level, we continue to navigate a volatile but gradually improving demand environment and deliver resilient performances.

— Suyog Kotecha

In Agrochemicals, select products are showing promising volume recovery, although overall margins remain under pressure.

— Suyog Kotecha

The Polymer business also faced a significant headwind in the quarter, as U.S.

— Suyog Kotecha

If we look at our 3 year plan at this point in time, and of course, it is subject to evolution, depending on given how volatile the situation has been in the recent years.

— Suyog Kotecha

But quarter-on-quarter numbers are positive because the first quarter was actually very weak for DCB chain.

— Suyog Kotecha

And does this pose any risk to our long-term spreads per kg or spreads per tonne like what Aarti used to enjoy earlier spreads per tonne that will be materially lower if energy segment picks up more from the current levels.

— Aditya Khetan

Difficult to say it is also a continuing journey, right?

— Suyog Kotecha

At a global level, volumes for sure, have seen some recovery, but the margin pressure remains quite intense.

— Suyog Kotecha

I think if you look at India’s specific picture, we are starting to see some second order impact of some of our downstream customers who are exporting to U.S.

— Suyog Kotecha

The question I have is in an increasingly uncertain and random world, how do you see the balance sheet position?

— Sajal Kapoor

Q&A — 12 exchanges

Yes. Hi. Good afternoon, everyone. First question is on margins. We have seen the improvement in margins despite our mix going more towards MMA and energy products. Can you comment on any specifics or any other category which has led to the increase in the margins? And how sustainable is it?

Suyog Kotecha

The margin’s improvement was predominantly driven by operating leverage. At a contribution level, if you see at the overall product portfolio level, we remain quite consistent on the contribution margin level. But as the overall business volume goes up, the operating leverage starts kicking in and that starts getting reflected in the EBITDA percentage increase. This is despite the slightly adverse mix, we have seen this. So is it safe to assume that when, say, probably the energy-related mix goes down, we will have better margins going forward? I have mentioned this in the previous calls as we

Good set of numbers, firstly to start off with. So first one, just a near-term one. If I look at this quarter in isolation, and the INR 15 -20-odd crore EBITDA impacts that we had from the previous quarter, which I am assuming that would have been a part of this quarter. If I just make an adjustment, the EBITDA number should be roughly in the range of INR270-280-odd crore. Would this be like a steady-state number, let us say, a couple of quarters down the line before our Zone 4 and PEDA capacity is commissioned?

Suyog Kotecha

I would avoid from commenting on exact numbers. But yes, I think the level of performance that we are seeing right now is what is reflected based on the current strategies that are deployed. So if we are able to maintain this level of volumes, these are the numbers that someone can assume as steady-state numbers. But I think the objective is sort of not to stay here, right. I think both volume ramp-up as well as the cost optimization efforts that we are doing right now should ideally start supporting the business further and potentially compensate for any more volatility that we might see from

Thanks for the opportunity. So first question is on the M&A strategy. So earlier, we had indicated that since we have a large presence established in the Middle East, we will go for U.S. given that U.S. is a gasoline market, whereas Europe is a gasoline market. And now there is a change because of the U.S. tariff situation.Obviously, we did not anticipate that. But how do we look at it from a change in strategy perspective and the benefits that we were likely to get accrued from U.S. would it be in similar quantum if we change the strategy to Europe and further into the Middle East?

Suyog Kotecha

So I think the thesis still does not change. The U.S. still remains the largest gasoline market. I think we will not be able to change that thesis/facts because it is natural. I think it is the biggest market for gasoline. Yes, the trade barriers did impact sort of our strategy in the U.S. And in that context, we had to figure out some alternate market where the teams have been able to do a decent job. But we continue to focus on U.S. So we will also see resumption of volumes going to U.S. in this quarter despite tariff uncertainty. So that gives us confidence that in the long term, as the Ind

Thank you, sir, for the opportunity. Sir, first question on the DCB, we are witnessing a quarterly jump despite muted uptick in dyes and polymers. Any specific reason like other segments where we look NT, NCB all have been muted, that is understandable. But on DCB, we have seen an uptick. Any specific reason, sir, despite end user remaining muted?

Suyog Kotecha

No. So I think on a DCB, you have to look at it both on quarter-on-quarter and year-on-year numbers. I think if you see year-on-year numbers, they will actually be negative. But quarter-on-quarter numbers are positive because the first quarter was actually very weak for DCB chain. And it is also one of the chains, which did get impacted because of U.S. tariffs. But I think we have revised our strategy for DCB, and that is one chain where we expect sort of very strong second half. So you will see volume growth in that particular segment irrespective of what happens to U.S. tariffs over the cour

Good afternoon. Thank you so much. Just with regard to the cost-cutting part of the guidance that we have spoken about. So this INR150 crore to INR200 crore is now mentioned as fully completed. Is this in the base in terms of the P&L numbers that we see in the expense numbers? Or is some benefit yet to flow through in coming quarters?

Suyog Kotecha

There is a lot of benefit yet to flow through, especially one of the major items there was around sort of renewable power purchase agreements. A large chunk of it is expected to get commissioned only in April 2026. So that is a significant benefit that will flow through in the next financial year. There are also certain long-term contracts for raw material where new pricing formula gets set in. Those are also yet to flow through to the bottom line completely. So in terms of actions, the activities have been completed. But from a benefit point of view, there is a decent of it which is yet to fl

Hi, Sir. Thank you so much for the presentation. Just a couple of clarifications on the tariff spread again. I think you mentioned that you have already reduced the share of volumes to the U.S. this quarter and offset it with sales to the other regions. So would it be fair to say that if the tariff situation resolves whenever it does, the volume impact may not be significantly higher because it could just be a case of you moving the volumes to the U.S.? Or there could still be a more improved volume performance should that happen? That is the first bit. And second, you just also touch upon ex

Suyog Kotecha

The answer to the second question is yes. I think ex of tariffs typically we enjoy better margin profile in the U.S. than other geographies. I think the first part of that question, the answer sort of changes from value chain to value chain. So if you look at something like MMA where if you are operating at 90% plus capacity utilization, then opening of U.S. market will not change the volumes. It might change the margin profile, but it will not change the volumes because anyway, the capacity utilization is to a decent level. But there are some other things like phenylenediamine, like DCB, like

So overall, we remain, again, very confident about the market potential of the product. That is the reason further debottlenecking efforts underway to increase the capacity. From a regional share point of view, at this point in time, we would not address it because right now, it is frankly driven a little bit by the current geopolitical situation that we are facing. We will reach to a little bit stable global footprint position in the 6 months down the line, where we have a resolution on the U.S. India issue. At the same time, we have good feedback from current expansion activities that we hav

Suyog Kotecha

We have moved past that industry phase to be very honest. I think there are very rare instances where these are kind of back-to-back customer committed with take-or-pay kind of contract kind of commitments projects. Yes, in all of them, we do have very active conversations with customers, and we do have decent relationships and conversations in place, which gives us confidence to place the molecules. But if your question is specific to that whether we have a take-or-pay contract for any of these products, then the answer is no. Surya Narayan Patra: Okay. Even then can you give some vision beca

Good afternoon, sir. Thank you for the opportunity and congratulations for a great set of numbers. Just wanted to know in the MMA, which is contributing upwards of 40%, will that maintain going forward, that is the case? That is the first thing. And secondly, we are very confident on the MMA. Just wanted to know our right to win in India in the global market in the MMA business.

Suyog Kotecha

So I think from a manufacturing point of view, we feel we have one of the largest and most competitive capacities for this product. There are several innovations that we have done on technology front, which also allows us to play in this market against competition. And thirdly, we are genuinely investing a lot in building a supply chain infrastructure as well as creating very deep customer relationship with the large global players. At the same time, on the volume confidence, I think the confidence of manufacturing and placing the product is sort of demonstrated also in the quarterly performan

I think I answered it partially. It is part of our Zone 4 blocks. And as we start the next financial year, you will see sequential 5 blocks getting commissioned in Zone 4 over the course of full financial year. And all of these blocks are designed and able to produce chlorotoluene valuation at the same time, many other products, and we will select the products depending on the market dynamics and the contribution possibilities. Siddharth Gadekar: Okay. Sir, secondly, just on the MMA competition, can you highlight what kind of capacity are we seeing getting added in India and China?

Suyog Kotecha

I think exact numbers, frankly, are not very specifically available in the market. We suspect there is sort of another 100-plus kt capacity available in India and maybe 200 to 300 kt capacity available in China. Though that is not reflected in the volumes from competition, but that is the kind of capacity that could be available. Thank you.

Thank you for taking my question. First one is just an observation. The quality of communication and disclosures has improved significantly in recent quarters. So well done on that front. Even if you read through the annual report, the disclosures have significantly improved. That is one. And then we have stepped up our efforts in science and innovation, the intellectual property creation effort has increased. All that is good. The question I have is in an increasingly uncertain and random world, how do you see the balance sheet position? Would you be comfortable with the current debt profile

Suyog Kotecha

Thank you, Sajal. I think first on the capex side, I think the capital execution strategy has been much disciplined for the last 12 months and will remain much disciplined going forward. I think in some of the questions, I did cover that. Going forward also, if you look at next 2 to 3 years, I think we are not looking at a very blockbuster kind of a capex, right? If something comes our way, we will, of course, evaluate and sort of come back. But at this point in time, the focus remains on sort of medium-scale capex, which are able to turn around very fast and are able to deliver significant re

Hello sir. Congrats on good set of numbers. I have just two queries. One, sir, what explains the increase in debtor level, almost by 65%?

Chetan Gandhi

So if you look at the top line, the top line has also gone up. And in certain cases, in fact, just adding it to the previous question which was there, the export percentage is upwards of 60%, where the credit profile is a bit more as compared to the domestic numbers, so which is where you would see this receivable to be there. So if I combine on an overall working capital basis, the working capital cycle continues to remain at the level what it was. It continues to remain in the range of around 45, 50-odd days. The receivable plus inventory continues to operate at a similar level. So there is

Thank you. Thank you, everyone, for joining us today. We appreciate your continued support. As shared earlier, we are transgressing across the most challenging phase of the chemical sector. I think our resilient and robust strategy helps us navigate this phase and deliver growth and sustainable performances. We hope we have been able to address all your questions. Please feel free to reach out to us if you have any further queries. Thank you once again.

Management

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Speaking time

Suyog Kotecha

Moderator

Arun Prasath

Archit Joshi

Chetan Gandhi

Aditya Khetan

Abhijit Akella

Anil Chaurasia

Rohit Nagraj

Tushar Raghatate

Opening remarks

Nishid Solanki

Thank you. Good afternoon, everyone, and thank you for joining us on Aarti Industries Q2 FY '26 Earnings Conference Call. Today, we are joined by senior members of the management team, including Mr. Suyog Kotecha, Executive Director and Chief Executive Officer; and Mr. Chetan Gandhi, Chief Financial Officer. We will commence the call with opening remarks from Mr. Kotecha, followed by a Q&A session where the management will address queries of the participants. Just to share our standard disclaimer. Certain statements that may be made in today's call may be forward-looking in nature. A disclaimer to this effect has been included in the results presentation, which has been shared earlier and also uploaded on stock exchange websites. I would now invite Mr. Kotecha to share his perspectives. Thank you, and over to you, sir.

Suyog Kotecha

Thank you. Good afternoon, everyone. We value your continued support for Aarti Industries. I will share the industry trends, key highlights and updates from our Q2 FY26 performance. The external operating environment continues to evolve amid a complex geopolitical backdrop led by U.S. tariffs on select Indian chemical exports. Despite these market pressures, we delivered sequential growth predominantly driven by proactive market diversification, smart investments in innovation, and disciplined project execution. We are actively using our integrated manufacturing and product portfolio strengths to further establish Aarti as the Global Partner of Choice in Speciality Chemicals. The tariff represents a near-term headwind for the Indian chemical sector, temporarily eroding competitiveness against European as well as Chinese suppliers to an extent. In response to the steep tariffs imposed by the United States, we also took steps to diversify and rebalance our export mix, towards Europe, the

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