Anand Rathi: Stellar Quarter For Aarti Drugs, China Disruption Unleashes Tremendous Growth Opportunity
Capsules are laid out for inspection on the production line of a drug factory. (Photographer: Tomohiro Ohsumi/Bloomberg)

Anand Rathi: Stellar Quarter For Aarti Drugs, China Disruption Unleashes Tremendous Growth Opportunity

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BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Anand Rathi Report

As a prominent partner of pharma companies seeking to diversify supplies from China, Aarti Drugs Ltd.’s Q1 sales grew 34% YoY.

A better product mix and higher realisations on key active pharmaceutical ingredients (prices rose 10-15%) led to a 772 basis point gross-margin expansion.

The Ebitda margin swung to a record 24.6% (a 1,110 basis point expansion). Absolute Ebitda grew 145% to Rs 1.3 billion.

The better operating performance and lower tax rate rocketed adjusted profit after tax 281% to Rs 855 million.

The production-linked Rs 100 billion incentive scheme announced by the Indian government will benefit those like Aarti Drugs.

It has shortlisted a basket of products it plans to manufacture under this scheme. It is also evaluating contract manufacturing of specialty products, earlier manufactured in China.

Click on the attachment to read the full report:

Anand Rathi Aarti Drugs Q1FY21 Result Update.pdf

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