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Aarti Industries Q2 Results: Higher exports, product optimisation aid operating profit

Aarti Industries Q2 Results: Higher exports, product optimisation aid operating profit

Aarti Industries Q2 Results: Higher exports, product optimisation aid operating profit
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By CNBCTV18.com Nov 15, 2022 1:08:08 PM IST (Published)

The total revenue rose by 34 percent YoY to Rs 1,685.03 crore against Rs 1,256.37 crore in Q2 FY22.

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Specialty chemicals maker Aarti Industries has posted a 16 percent decline in its net profit for the September quarter due to higher input costs and an increase in finance costs.
The company reported a net profit of Rs 124.48 crore compared to Rs 149.95 crore in the same quarter a year ago.
The total revenue rose by 34 percent to Rs 1,685.03 crore compared to Rs 1,256.37 crore in the year-ago quarter. The company attributed the topline growth to a stable demand trajectory for products under the essential end usages.
The management also said that the growth would have been much higher had it not been for tapered demand in some products linked to dyes and pigments. The demand is likely to recover from the March quarter.
Aarti Industries' total expenses rose to Rs 1,534.62 crore from Rs 1,072.85 crore in the corresponding year-ago period. Finance costs increased to Rs 43.73 crore from Rs 14.45 crore in the same period a year ago.
The company’s EBITDA was up by 4.5 percent at Rs 266 crore but operating margins dropped to 15.8 percent from 20.2 percent in the year-ago period.
Excluding the impact of shortfall fees of Rs 52 crore, the company's EBITDA growth could have been over 30 percent, according to the company.  The company managed to maintain its operating profit due to a higher share of exports and product optimisation. 
Chairman & MD Rajendra Gogri is hopeful that the full benefit of the company's expansion program will kick in from the financial year 2024. Volume ramp-up and steady fixed costs will also help in the company's operating performance, he wrote in his presentation to shareholders.
During the quarter, the company demerged its pharma business into a separate entity after receiving approval from the NCLT.
The stock is currently trading at Rs 709.35, up 0.55 percent.
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