Aarti Industries lifts margin to 16.00% as revenue rises 42.45% YoY
Costs grew slower than revenue, while lower interest expense supported the sequential rise in profit before tax.
Filed 30 Jul 2026, 18:48 IST · after market close · Aarti Industries Ltd (AARTIIND)
Key takeaways
- Consolidated revenue grew 42.45% year on year, while operating margin expanded 3.34 percentage points to 16.00%.
- Net profit rose 257.97% year on year to Rs 155 cr, helped by the shift from a -3.37% tax rate to 13.89% rather than by other income.
- Operating margin improved for the second straight quarter to 16.00%, but remained 1.74 percentage points below the 17.74% median of 36 reported Commodities peers.
Price around the results
Revenue growth broadens the earnings base
Consolidated revenue increased 42.45% year on year and 8.22% sequentially, with operating profit growing faster at 80.03% year on year and 11.43% quarter on quarter. The year-on-year comparison is particularly meaningful because revenue had fallen to Rs 1,675.66 cr in Q1FY26 from Rs 1,949.03 cr in Q4FY25. Profit before tax rose 62.07% sequentially, even as the quarter followed a higher base in operating profit.
Slower cost growth lifts operating margin
Expenses grew 37.00% year on year against 42.45% revenue growth, and 7.63% sequentially against 8.22% revenue growth; this operating leverage lifted margin by 3.34 percentage points year on year and 0.46 percentage points quarter on quarter. Interest expense fell 26.10% sequentially to Rs 83 cr, partly supporting the rise in pre-tax profit, although it was 39.50% higher than a year earlier. Other income contributed only 2.78% of pre-tax profit, so the quarter's earnings were not materially dependent on that line. The tax rate moved up 37.51 percentage points sequentially from a negative rate, and rose 17.26 percentage points year on year to 13.89%, making the comparison in net profit less clean.
Margin recovery continues, but trails sector peers
Operating margin has risen from 12.66% in Q1FY26 to 16.00% now, despite a small decline to 13.86% in Q3FY26 before the subsequent improvement. Aarti Industries' margin was 1.74 percentage points below the 17.74% median among 36 Commodities peers that had reported, placing it 13th from the bottom. The current quarter therefore shows clear improvement in the company's own margin trend without closing the sector gap.
After-hours filing leaves market reaction pending
The consolidated results were filed after market close, so there is no reported market reaction yet. Across the last eight results, the stock rose after three and fell after five, with a median absolute move of 3.26%. The historical pattern therefore leans negative, but the current response remains to be established.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,387 cr | ₹2,206 cr | +8.22% | +42.45% |
| Other income | ₹5 cr | ₹-1 cr | — | +42.45% |
| Expenses | ₹2,005 cr | ₹1,863 cr | +7.63% | +37.00% |
| Operating profit | ₹382 cr | ₹343 cr | +11.43% | +80.03% |
| Operating margin (%) | 16.00% | 15.54% | — | — |
| Interest | ₹83 cr | ₹112 cr | -26.10% | +39.50% |
| Depreciation | ₹124 cr | ₹119 cr | +4.62% | +8.48% |
| Profit before tax | ₹180 cr | ₹111 cr | +62.07% | +329.70% |
| Tax | ₹25 cr | ₹-26 cr | — | — |
| Net profit | ₹155 cr | ₹137 cr | +12.90% | +257.97% |
| EPS (₹) | ₹4.27 | ₹3.79 | +12.66% | +258.82% |
Operating margin of 16.00% compares with a Commodities sector median of 17.74% across 36 peers that have reported Q1FY27.
What to watch
- Whether operating margin holds at or above 16.00% after its rise from 12.66% in Q1FY26.
- Whether interest expense stays below Rs 112.32 cr, the Q4FY26 level, after falling to Rs 83 cr.
- Whether the margin gap to the 17.74% sector median narrows from 1.74 percentage points.