Aarti Pharmalabs Q4 Results: Shares slide 6% as forex loss, one-offs impact earnings performance

Shares of Aarti Pharmalabs Ltd. declined about 6% on Tuesday, May 26, after the company reported a drop in March quarter earnings, weighed down by margin contraction and higher foreign exchange losses, despite a modest rise in revenue.The company reported a 33% drop in its consolidated net profit to ₹56.3 crore for Q4FY26 from ₹83.6 crore in the year-ago quarter. Revenue rose 3.3% year-on-year to ₹582.6 crore from ₹563.8 crore.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) declined 21% YoY to ₹113.2 crore from ₹143.2 crore a year ago, while EBITDA margin narrowed to 19.4% from 25.4%.
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Higher finance costs, depreciation expenses and foreign exchange losses impacted the company’s profitability during Q4FY26. Aarti Pharmalabs reported foreign exchange losses of ₹17 crore during the quarter compared to a loss of ₹2.5 crore in the year-ago period.For FY26, its consolidated revenue stood at ₹1,819.4 crore, compared to ₹2,115 crore in FY25, while annual net profit declined to ₹174.7 crore from ₹272.4 crore a year ago. EBITDA for the year also came under pressure amid elevated costs and forex-related impact.

The company said it recognised fair value losses related to a target redemption forward contract entered into during FY25 for hedging anticipating US dollar export inflows. The total fair value impact recognised in FY26 stood at ₹29.7 crore.

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Separately, the board recommended a final dividend of ₹2 per equity share for FY26, subject to shareholder approval.

Shares of Aarti Pharmalabs are trading 4.6% lower at ₹698 after the results announcement. The stock is down 6% so far this year.