Aarti Pharmalabs Limited has announced its financial results for Q3FY26, demonstrating mixed performance across its business segments. The pharmaceutical company, part of the diversified Aarti group with a turnover exceeding INR 130 billion, continues to navigate operational challenges while pursuing strategic expansion initiatives.

Q3FY26 Financial Performance

The company's standalone quarterly results showed operational revenue of INR 4,253 million, representing a marginal increase of 1.9% quarter-on-quarter but a decline of 9.7% year-on-year. EBITDA for the quarter stood at INR 1,030 million with a margin of 24.22%, showing significant improvement from the previous quarter's 17.76%.

Nine-Month Performance Overview

For the nine-month period ending December 2025, the company reported operational revenue of INR 12,179 million, down 1.9% compared to INR 12,417 million in the corresponding period of the previous year. EBITDA for 9M-FY26 was INR 2,720 million with a margin of 22.33%, compared to INR 2,833 million and 22.82% margin in 9M-FY25.

Business Segment Updates

The company operates across three main segments: Xanthine derivatives, API & Intermediates, and CDMO/CMO services. The Xanthine expansion project is progressing as planned with mechanical completion expected by March 2026. The expansion will increase total capacity from 5,000 MTPA to over 9,000 MTPA, with the company targeting to increase its global market share from the current 15-20% to 20-25%.

In the CDMO/CMO business, goods worth INR 49 crore were in transit as of December 31, 2025, and could not be booked in Q3FY26 revenue due to accounting standards. The company is working with 21 customers on 59 active projects, of which 40 are in the commercial stage and 19 are under different stages of development.

Operational Challenges and Outlook

The API business continues to face margin pressure despite early signs of recovery. The company plans debottlenecking of the steroid block in its API production facility to create additional capacity. However, Atali Phase 1 is experiencing operational challenges that are impacting production ramp-up, with resolution expected by the end of Q4FY26.

Earnings Call Recording Available

Following the announcement of Q3FY26 results, Aarti Pharmalabs has uploaded the audio recording of its earnings conference call on the company website under Regulation 30 compliance. The recording provides detailed insights into the company's performance and management commentary on business developments. Investors and analysts can access the recording at the company's dedicated Q3FY26 results page.

The company maintains its position as the largest Indian manufacturer of Xanthine derivatives and continues to benefit from the "China+1" shift with its non-Chinese dependent and fully backward integrated manufacturing capabilities. With USFDA approved facilities and regulatory approvals from multiple agencies including EU GMP, EDQM, KFDA, and COFEPRIS, the company is well-positioned in regulated markets.

Aarti Pharmalabs Limited has completed the allotment of 10,457 equity shares to eligible employees under its Performance Stock Option Plan 2023. The allotment was approved by the company's Nomination and Remuneration Committee during their meeting held on February 09, 2026.

Share Allotment Details

The allotted equity shares carry a face value of Rs. 5 each and were issued pursuant to the exercise of stock options by eligible employees under the Aarti Pharma Performance Stock Option Plan 2023 (PSOP 2023). The allotment complies with the provisions of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

Updated Share Capital Structure

Following this allotment, Aarti Pharmalabs Limited's paid-up equity share capital has increased significantly. The company's updated capital structure reflects the addition of these employee stock option shares to the existing share base.

The newly allotted equity shares rank pari-passu in all respects with the existing equity shares of the company, ensuring equal rights and privileges for all shareholders.

Regulatory Compliance

The share allotment was conducted under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has informed both BSE Limited (Scrip Code: 543748) and National Stock Exchange of India Limited (Symbol: AARTIPHARM) about this corporate action.

The allotment represents the company's commitment to its employee incentive programs and aligns with regulatory requirements for share-based employee benefits. Company Secretary and Legal Head Jeevan Mondkar signed the regulatory filing, confirming the completion of all necessary procedures for the share allotment process.