Aarti Drugs’ costs outpaced revenue, narrowing Q2 margin
Standalone revenue grew +12.56% QoQ, but a +13.66% rise in expenses cut operating margin by 0.83 percentage points.
Filed 03 Nov 2026, 19:03 IST · after market close · Aarti Drugs Ltd (AARTIDRUGS)
Key takeaways
- Standalone revenue grew +12.56% QoQ, but expenses rose +13.66%, narrowing operating margin by 0.83 percentage points.
- Net profit increased +13.43% QoQ as the tax rate fell 0.23 percentage points, while other income contributed 3.45% of pre-tax profit.
- The 13.82% operating margin was 7.42 percentage points below the 21.24% median for 56 Healthcare peers that have reported.
Price around the results
Revenue momentum did not translate fully into operating profit
Aarti Drugs’ standalone revenue grew +12.56% QoQ, while operating profit increased only +6.20%. Expenses grew faster than revenue at +13.66%, explaining the weaker conversion of sales growth into operating profit.
Margin stayed below the Healthcare peer median
Operating margin narrowed to 13.82%, down 0.83 percentage points from Q1FY27. Interest expense also rose +12.37%, adding pressure below the operating line. The lower 24.83% tax rate helped net profit growth, but other income was only 3.45% of pre-tax profit and was not a major earnings driver.
Q2 was filed after market close
The standalone results were filed after market close on 03 November 2026, so there is no reported market reaction to assess yet. The margin also ranked 11th from the bottom among the 56 Healthcare companies that have reported the quarter, with a 7.42-percentage-point gap to the sector median.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹706 cr | ₹627 cr | +12.56% |
| Other income | ₹3 cr | ₹-2 cr | — |
| Expenses | ₹609 cr | ₹536 cr | +13.66% |
| Operating profit | ₹98 cr | ₹92 cr | +6.20% |
| Operating margin (%) | 13.82% | 14.65% | — |
| Interest | ₹8 cr | ₹7 cr | +12.37% |
| Depreciation | ₹16 cr | ₹15 cr | +3.29% |
| Profit before tax | ₹77 cr | ₹68 cr | +13.09% |
| Tax | ₹19 cr | ₹17 cr | +12.06% |
| Net profit | ₹58 cr | ₹51 cr | +13.43% |
| EPS (₹) | ₹6.32 | ₹5.57 | +13.46% |
Operating margin of 13.82% compares with a Healthcare sector median of 21.24% across 56 peers that have reported Q2FY27.
What to watch
- Whether operating margin improves from 13.82% in the next quarter.
- Whether expenses grow slower than revenue, after +13.66% versus +12.56% QoQ.
- Whether interest growth moderates from +12.37% QoQ.