Aarti Surfactants Limited has announced a credit rating downgrade by CARE Ratings Limited, informing both BSE and NSE through a regulatory filing on December 19, 2025. The downgrade affects the company's bank facilities and long-term instruments, with the rating agency citing margin pressures as the primary concern.

Rating Downgrade Details

CARE Ratings Limited has downgraded multiple financial instruments of Aarti Surfactants Limited. The rating action encompasses both long-term bank facilities and preference shares, reflecting the agency's assessment of the company's current financial performance.

Reason for Downgrade

The credit rating agency attributed the downgrade to subdued margins experienced by the company in H1 FY26. This performance indicator has raised concerns about the company's near-term financial stability and debt servicing capabilities.

Company's Response and Rating Committee Decision

Following the initial rating action communicated on December 10, 2025, Aarti Surfactants submitted a representation letter dated December 15, 2025, seeking reconsideration of the rating revision. However, CARE Ratings' Rating Committee, after careful evaluation of the company's representations, maintained its decision to downgrade the facilities.

In its response letter dated December 18, 2025, CARE Ratings confirmed that the rating would remain at CARE BBB+ Stable for long-term bank facilities and CARE BBB Stable for long-term instruments. The rating agency assured that all facts mentioned in the company's representation were considered during the rating decision process.

Regulatory Compliance

The intimation was made under Regulations 30 and 51 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Company Secretary Priyanka Chaurasia signed the disclosure document, ensuring compliance with stock exchange requirements for both BSE and NSE.

Aarti Surfactants Limited , a key player in the home and personal care ingredients sector, has reported mixed financial results for the second quarter of the fiscal year. The company witnessed a significant improvement in its operational performance, although net profit saw a slight decline.

Revenue Growth and EBITDA Surge

Aarti Surfactants reported a robust increase in revenue, which grew to ₹1,790.00 million in Q2, up from ₹1,500.00 million in the same period last year. This 19.3% year-over-year growth reflects the company's strong market position and demand for its products.

Notably, the company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) saw a remarkable surge, rising to ₹94.00 million from ₹37.00 million in the corresponding quarter of the previous year. This represents a substantial 154% increase, indicating significant improvement in the company's operational efficiency and cost management.

The EBITDA margin also expanded impressively, reaching 5.22% compared to 2.46% in the same quarter last year. This expansion in margin suggests that Aarti Surfactants has been successful in managing its operational costs effectively.

Profit Performance

Despite the strong top-line growth and EBITDA performance, Aarti Surfactants experienced a slight dip in its net profit. The company reported a net profit of ₹16.00 million for the quarter, down from ₹19.00 million in the same period last year. This 15.8% year-over-year decrease in net profit might be attributed to factors such as increased finance costs or higher depreciation, although specific details were not provided in the financial results.

Financial Position

As of September 30, Aarti Surfactants maintains a solid financial position with a net worth of ₹23,420.72 million. The company's debt-to-equity ratio stands at 0.49, indicating a balanced capital structure.

The company's board of directors approved these unaudited financial results in their meeting. They also announced the re-constitution of the Risk Management Committee, with Mr. Parimal H. Desai joining as a new member, potentially strengthening the company's risk assessment and management capabilities.

Conclusion

While the slight decline in net profit may raise some concerns, the substantial growth in revenue and EBITDA suggests that Aarti Surfactants is on a positive trajectory in terms of operational performance. The company's ability to maintain revenue growth while further improving profitability will be crucial for long-term success as it continues to navigate the dynamic home and personal care ingredients market.