Aarti Drugs Limited approved the 'Performance Stock Option Plan 2026' during its Board of Directors meeting on August 27, 2026. The plan authorizes the creation and grant of up to 8,00,000 (Eight lakh) Performance Stock Options (PSOs) convertible into equity shares of face value ₹10 each.

The eligible employees will receive these options in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. The final implementation is subject to the approval of the company's members.

Plan Details

The Board meeting commenced at 11:30 am and concluded at 12:20 pm. Prior to the meeting, the trading window was closed from August 25, 2026, to August 29, 2026, as per the company's Code of Conduct for Prevention of Insider Trading.

The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Rushikesh Deole, Company Secretary & Compliance Officer, confirmed the outcome.

Aarti Drugs Limited delivered a strong start to FY27, reporting consolidated revenue of ₹703.6 crore in Q1FY27, up 19% year-on-year from ₹590.8 crore in Q1FY26. The growth was primarily driven by higher API realizations amid geopolitical tensions in West Asia and steady volume expansion across key therapeutic categories. EBITDA surged 30% to ₹96.9 crore, with margins expanding by 120 basis points to 13.8%. Profit before tax (PBT) grew 35% to ₹69.2 crore, though net profit (PAT) stood at ₹50.1 crore, down from ₹54.0 crore in the prior year quarter which included a ₹15 crore principal tax refund.

The company’s stand-alone revenue reached ₹627.6 crore, marking a 20% YoY growth. Domestic revenue grew 25% while exports expanded 12%, contributing 32% of the stand-alone total. The formulations segment saw an 8% YoY revenue increase to ₹81.6 crore, with exports accounting for 74% of this segment’s sales. Management highlighted that operational stability was maintained despite global supply chain disruptions, with no production delays or material shortages affecting customer commitments.

Key Financial Metrics

Operational Updates and Capacity Expansion

The Sayakha facility, a key strategic investment for backward integration, operated at nearly 65% utilization during the quarter. This facility is critical for producing intermediates for the antidiabetic segment, particularly metformin. Management noted that captive consumption from Sayakha is expected to rise to 80-90% in subsequent quarters, potentially adding 1% to gross contribution. Additionally, the brownfield expansion at the Baddi formulation facility is progressing as planned, aiming to nearly double oral solid dosage manufacturing capacity upon completion.

What the Numbers Show

While net profit declined nominally, the operational performance indicates robust underlying strength. The 30% EBITDA growth outpaced the 19% revenue growth, signaling effective cost management and pricing power. The divergence between PAT and EBITDA trends is largely attributable to the one-time tax refund in Q1FY26 rather than operational weakness. Furthermore, the significant margin expansion despite elevated raw material and freight costs demonstrates the resilience of Aarti Drugs’ integrated manufacturing model and its ability to pass on price increases to customers.

Market Dynamics and Outlook

Geopolitical conflicts have led to volatile raw material prices and elevated freight costs, but also created a favorable pricing environment for APIs. Metformin prices, for instance, remained 15-20% higher than pre-conflict levels. Management expects volume growth to improve in coming quarters as inventory levels normalize, targeting 10-15% volume growth over the next two years. The company is also focusing on expanding its presence in regulated markets, with USFDA approvals pending for new metformin capacity and ongoing business development for existing USFDA-approved facilities.