AARTIPHARM
Micro CapAarti Pharmalabs Limited
Pharma
Aarti Pharmalabs (APL) is a globally recognized manufacturer of generic API, Xanthine derivatives, and a leading CDMO/CMO player in India. Part of the Aarti group, it operates 7 manufacturing units (3 USFDA approved), 3 R&D facilities, holds 63 patents, and 60 US DMFs. It commands 15-20% global market share in Xanthine derivatives.
One read, four checks
75+ is strong, 60-74 is usable, 45-59 is mixed, and below 45 needs caution. These are research lenses, not buy/sell instructions.
Weak fundamentals, management trust is acceptable, price trend argues for patience, and recent execution is weak.
Fundamental lens: valuation, quality, growth, balance sheet, and cash flow.
low confidence · 0/0 claims checked
Timing lens: price trend and sector relative strength.
Rolling lens: recent quarterly delivery, not the latest single-result score.
Quarter ended 31 Mar 2026
Bad · 0/100PAT -31% YoY · margin compression · Rev +3% YoY · +35% QoQ
| Metric | This quarter | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹583 Cr | +3.4% | +35.0% |
| EBITDA | ₹113 Cr | -22.6% | +10.8% |
| Operating margin | 19.0% | -700 bps | -500 bps |
| PAT | ₹61 Cr | -30.7% | +27.1% |
| PAT margin | 10.5% | -514 bps | -65 bps |
NDF means not disclosed in the current structured filing feed. It is intentionally not treated as zero.
Where growth can come from, and what can break the case
Q4 FY26 consolidated revenue grew 3.3% YoY and 34.8% QoQ to INR 5,826 Mn, driven by record CDMO sales. However, consolidated EBITDA declined 10.6% YoY to INR 1,301 Mn, with margins contracting 349 bps YoY to 22.33%. FY26 standalone revenue grew 1.5% YoY, but EBITDA fell 4.8% to INR 4,061 Mn.
While Q4 FY26 showed strong sequential revenue growth, particularly in CDMO, and resolution of operational issues at Atali, the significant YoY decline in EBITDA and PAT margins for both the quarter and full year FY26 is concerning. Headwinds from input costs and limited pass-through ability, coupled with higher finance costs and depreciation, are impacting profitability despite revenue growth.
Revenue by Business Segment (Q4 FY26)
Latest issuer-disclosed distribution across 3 reported categories.
CDMO/CMO Segment Expansion
The CDMO/CMO segment logged its highest ever quarterly revenue at INR 155 Cr in Q4 FY26, and the company is expanding its on-ground sales presence to USA and EU.
Xanthine Derivatives Capacity
Capacity expansion is ongoing to increase total Xanthine capacity to 9,000+ MTPA, targeting a global market share of 20-25% from the current 15-20%.
Atali Greenfield Site
Phase 1 at the Atali greenfield site, with 450+ kL reactor capacity, is expected to be fully operational by June 2026, serving as a growth engine for CDMO/CMO.
TIDES Portfolio Expansion
The company is initiating R&D investment in FY27 towards TIDES (Peptides & Oligonucleotides) to expand its portfolio capabilities.
Xanthine Derivatives Capacity
Capacity expansion is underway to increase total Xanthine capacity from the current 6,000 MTPA to 9,000+ MTPA. Commissioning is expected by June 2026.
Atali Greenfield Site (Phase 1)
Phase 1 at the Atali greenfield site, with 450+ kL reactor capacity, was ~80% operational by Q4 FY26 and is expected to be fully operational by June 2026.
China+1 Shift
The company is a non-Chinese dependent and fully backward integrated manufacturer of Xanthine derivatives, offering strong geographical diversification amidst the 'China+1' shift.
Consistent Revenue Stream
Beverage sales for Xanthine derivatives are predominantly driven by long-standing client relationships, ensuring a consistent revenue stream.
Input & Logistics Price Hike
Ongoing geopolitical tensions have resulted in input and logistics price hikes.
Cost Pass-Through Difficulty
Cost pass-through to customers is difficult in the API/Intermediates segments.
Foreign Exchange Impact
Recognition of fair value movement on a long-dated USD forward contract under FVTPL impacted reported profitability.
Margin Pressure from Input Costs
Ongoing geopolitical tensions are causing input and logistics price hikes, and the company faces difficulty in passing these costs through to customers in API/Intermediates.
Forex Volatility
Fair value movements on USD forward contracts have impacted reported profitability, indicating exposure to foreign exchange fluctuations.
Execution Risk on Capacity Ramp-up
Successful commissioning and ramp-up of Xanthine capacity to 9,000+ MTPA and full operationalization of Atali Phase 1 are critical for future growth targets.
What management said, and what results must prove
Issuer guidance and extracted claims are tracked against later reported outcomes. Treat these as management statements, not IndiaPulse forecasts.
QoQ comparison is relevant for Q4 FY26 to assess sequential momentum in CDMO and the resolution of operational challenges at the Atali plant. YoY comparison is useful for evaluating overall business performance and margin trends, especially for standalone figures, as annual consolidated figures are explicitly stated as not comparable YoY due to a JV accounting change.
US/Export Growth
International sales constituted 54% of total geographical sales in FY26. Xanthine derivatives had 57% international sales, and API & Intermediates had 56% international sales in FY26.
Launch Pipeline
The company has 11 new APIs under development (R&D/validation stage) and is working on 54 active CDMO projects, with 19 of these under different stages of development.
Approvals
Aarti Pharmalabs holds 60 US DMF approvals and 44 CEP approvals. Its Dombivli Unit secured USFDA approval in 2023.
API/CDMO Mix (Q4 FY26 Revenue)
CDMO/CMO contributed 29.1%, API & Intermediates 28.3%, and Xanthine derivatives 42.6% to Q4 FY26 revenue.
FY27 Capex Outlook
FY27 capital expenditure is expected to be at similar levels to FY26, which reached approximately INR 400 Cr.
Revenue & EBITDA CAGR Target
Management is targeting 15-18% revenue and EBITDA CAGR over the next 3-4 years on a standalone basis.
Dedicated CDMO Block at Atali
The company is evaluating a dedicated block for a specific CDMO project at Atali, with groundbreaking planned in FY27 and a 1-year completion target.
Numbers and claims to verify in the next filings
| Checkpoint | Current evidence | What to verify next |
|---|---|---|
| Xanthine Capacity Utilization | Currently operating at 6,000 MTPA. | Successful commissioning and ramp-up to 9,000+ MTPA post June 2026, and its impact on market share. |
| Atali Phase 1 Operational Status | ~80% operational by Q4 FY26, fully operational expected by June 2026. | Full operationalization, successful customer audits, and contribution to CDMO segment growth. |
| API/Intermediates Margin Trend | Under pressure from input costs with difficult cost pass-through. | Stabilization or improvement in margins, indicating better cost management or pricing power. |
| CDMO Project Conversion | 19 projects under development out of 54 active projects. | Conversion of development projects to commercial stage and addition of new customers/projects. |
Verification checkpoints are IndiaPulse research interpretation, not investment advice.
Trend score and candlestick chart
44NeutralSMA20 -5.2% / mo · near 52W low
Technical chart
AARTIPHARMweekly · 6M-15.6%Technical trend read
NeutralTrend is undirectional — long-term trend unclear. RSI 41.
- RSI(14) at 41 — sideways, no extreme reading.
- MACD below signal but histogram contracting — bearish momentum easing.
- 24% off 52W high · 7% above 52W low.
Mechanical read from the price + indicator series above. Not a recommendation — technical setups can reverse without warning, especially around earnings and macro events.
Valuation, score drivers, trust methodology, financials, and peers
Use these sections after reviewing the decision summary, latest result, thesis, management accountability, and technical timing above.
Fundamental score breakdown
WATCHLISTWhy this score?
Top U-Score contributors and drags from the latest stored fundamentals.
Positive drivers
- Piotroski is strong at 8/9.
- Fair-value margin of safety is positive at 22.7%.
- Balance sheet contributes 8/15 to the score.
Main drags
- Quality is weaker at 0/20; verify the latest quarterly trend.
- Cash flow is weaker at 2/10; verify the latest quarterly trend.
- Valuation is weaker at 7/30; verify the latest quarterly trend.
Healthcare valuation: PE/EVEBITDA with regulatory and pipeline checks
Healthcare valuation needs both earnings quality and regulatory/pipeline context.
Stored run vs live recompute
This shows the stored score trend when snapshots exist, and also compares the latest stored nightly score with a live recompute from current fundamentals and price.
Score history
12 stored score snapshots. Latest stored move: +0 points.
Factor attribution
Trust asks: does management behaviour match later outcomes? Higher is better, but confidence and evidence depth matter as much as the number.
Mixed Trust: Claim history is still being built. It ranks around the 53rd percentile of the scored universe and 41st percentile within Pharma. Main check: results consistency is weak at 41/100.
Healthy Trust Lite: Promoter pledge is zero. Key concern: 2 recent quarters had PAT decline worse than 25% YoY.
Usable, but needs evidence. Treat guidance with a margin of safety.
overall median 67 · Pharma: 41st pctile, median 70 · Micro: 36th pctile, median 71
0 documents indexed, but claim history is not strong enough yet.
0 claims extracted · No contradicted claim yet
How to read this Trust Score
Mixed Trust · low confidenceRead Trust alongside U-Score, result consistency, and technical trend. A cheap stock with weak Trust needs a larger margin of safety; a high Trust score does not make an expensive stock attractive by itself.
Forensic breakdown
Read low sub-scores as due-diligence warnings, not automatic sell signals.
Trust positives
- ▸Promoter pledge is zero.
Trust risks
- ▸2 recent quarters had PAT decline worse than 25% YoY.
Trust Lite uses financial behaviour only. Prefer claim-tested Trust when enough concall claims have later outcomes.
Intrinsic value
Fundamentals
Valuation
- P/E
- 31.10
- P/B
- 2.59
- EV/EBITDA
- 13.22
- Market Cap
- 5497.00Cr
Profitability
- ROE
- 8.59%
- ROCE
- 10.70%
- ROA
- 5.03%
- Dividend Y
- 0.82%
Growth (CAGR)
- Revenue 5Y
- 13.00%
- EPS 5Y
- 13.00%
- Revenue 3Y
- -2.00%
- EPS 3Y
- -3.00%
Balance Sheet
- Debt/Equity
- 0.43
- Interest Coverage
- 7.85×
- Altman Z
- 3.65
- Book Value
- 234.00
Cash Flow
- FCF Yield
- —
- FCF Positive Y
- 2/5
- OCF
- 262.00 Cr
- EPS TTM
- 19.27
Shareholding
- Promoter Hold
- 43.08%
- Promoter Pledge
- 0.00%
- Momentum 52W
- 6%
Financial History
Updated 9/6/2026
Revenue
₹ CrNet Profit
₹ CrReturn on Equity
%Peers
Business-comparable peers in Pharma — ranked by industry, sub-sector, theme-tag overlap, market cap, and U-Score similarity. Green cells mark the best available peer metric in this table.