Aarti Drugs sees notable boost in dermatology revenue from FY25

Around 44% of the company's debt book is long-term.

Aarti Drugs is confident of keeping the debt/equity ratio below 0.7x. “The debt number may not go down, but the P&L size and the balance sheet of the company will go up. So, we will be able to maintain that debt-to-equity ratio below 0.7 even after taking the term debt for the newer expansion, and that is also at a peak level, then it will again come down to 0.5,” he said.

The company had submitted a request for an anti-dumping inquiry concerning the import of Metronidazole from China. This application was prompted by the disparity in raw material costs between Indian and Chinese companies, with Indian raw material prices being notably higher for Metronidazole.

However, the Directorate General of Trade Remedies (DGTR) has decided to discontinue the anti-dumping investigation into the import of the antibiotic Metronidazole from China. This investigation had initially been launched by the DGTR in September 2022.

“Last few years, the anti-dumping duty has not been there for Metronidazole, and so the business and the margins will continue as its basis. If the duty was levied, it would have improved the margins further, but as of now there will not be any decline in the margins because it was rejected,” said Patil.

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In the second quarter of FY24, the company's revenue fell 7% year-on-year (YoY) to ₹641.5 crore from ₹687.7 crore. EBITDA (earnings before interest, taxes, depreciation, and amortization) increased to ₹76.45 crore from ₹74.3 crore translating to a margin expansion to 12%  from 10.8%. Profit rose to ₹39.6 crore from ₹38.75 crore.

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