According to NDTV Profit, Aarti Drugs Ltd. is targeting EBITDA margins of at least 15% for the next financial year, with potential to reach 16% if growth plans progress as expected. Chief Financial Officer Adhish P. Patil stated that the company should achieve at least 15% EBITDA margins, with further improvement possible through oncology business integration. The margin expansion strategy is supported by the ramp-up of the company's Sayakha facility and higher Metformin capacity utilization. As reported by NDTV Profit, Patil emphasized that "We should be at least targeting 15% EBITDA margins, if not higher," adding that "if everything goes well, then, with oncology business also coming in, we should keep going further higher till 16%."
As reported by NDTV Profit, the Sayakha project has demonstrated significant operational improvements since its September commissioning. The facility's utilization rate increased from approximately 30% in its initial quarter to 60-62% in the June quarter, with expectations to reach 80-85% within the next two quarters. The facility, which includes backward integration for Metformin and production of chemicals like monomethylamine and trimethylamine, has the potential to generate ₹50-60 crore in EBITDA at full capacity. Patil noted that the full benefit would become more visible from the next financial year, with the facility expected to be a key contributor to margin expansion as utilization continues to improve.
According to NDTV Profit, Aarti Drugs plans to significantly expand its Metformin production capacity as part of its growth strategy. The company currently produces approximately 1,400 tonnes per month and plans to increase this to 1,700 tonnes per month over the next five to six months. Further expansion is targeted to reach 2,200 tonnes per month within 12 to 14 months. Metformin serves as another major pillar of the company's growth and margin strategy alongside the Sayakha facility ramp-up, with the company also looking to expand sales into regulated markets including Western Europe and the US.
As reported by NDTV Profit, Aarti Drugs is positioning itself to expand into regulated markets as part of its growth strategy. The company is looking to expand sales into regulated markets, including Western Europe and the US, with Patil noting that "Once the regulatory markets open up, not only it will help us in pricing, but also in volumes." The capacity expansion will be funded through internal accruals and project term loans, with the company not expecting to raise equity. With Sayakha scaling up, Metformin volumes increasing and higher-margin regulated markets opening up, Aarti Drugs is betting that its profitability can move beyond the 14% EBITDA margin range towards its 15-16% target.
