Aarti Industries: expects a steady improvement in operating margins through FY27

 Aarti Industries: expects a steady improvement in operating margins through FY27


  • Aarti Industries Limited (AIL) is one of the world's leading speciality chemical companies, combining process chemistry with scale-up engineering competence. The Company ranks globally 1st – 4th position for 75% of its portfolio and is a “Partner of Choice” for various Major Global & Domestic Customers.
  • Outlook As raw-material costs stabilise and logistics normalise, AIL expects a steady improvement in operating margins through FY27, supported by new capacity ramp-ups and a diversified global mix. The Company continues to maintain a healthy balance sheet and disciplined capital allocation, ensuring a strong foundation for long-term value creation.
  • Operational and Strategic Highlights 
  • Energy: The gasoline–naphtha crack remained strong in Q2, supporting blending economics. US tariffs weighed on volumes and margins, with renegotiations underway to maintain demand. Strategic efforts continue to expand the MMA customer base and geographic reach amid rising competition from Indian and Chinese players. 
  • Non-Energy: Agrochemical volumes are recovering in select products, though margins remain under pressure. Dyes & pigments show muted demand growth, while US tariffs impacted Q2 polymer volumes, with pricing pressure continuing. India’s domestic pharma market is steady, but margins in fluoro products face challenges from Chinese competition. A potential India-US trade deal could support a recovery in polymer volumes. . 
  • Tariff Management and Market Diversification: Following the US tariff imposition on select Indian chemical exports in August 2025, AIL continues to diversify its export base toward Europe, Africa, and the Middle East. 
  • Capacity Expansion Zone IV Project: The Zone IV Project continues to progress as planned. A new Multipurpose Plant (MPP) will be commissioned in Q4 FY26, enhancing product development flexibility. In addition, the Calcium Chloride facility is expected to be commissioned in the coming quarter. 
  • Forward Integration PEDA Project: AIL is ready with a new PEDA (2-Phenyl Ethyl Diethyl Aniline) project with a capacity of 4,000 TPA, to be commissioned at its existing Ethylation unit at Dahej SEZ, by Q4 FY26. This project represents forward integration of AIL’s already commercial product, 2,6 Diethyl Aniline, providing a strong backward integration advantage. With PEDA's downstream application witnessing steady demand growth, AIL is well placed to become a key domestic supplier, boosting India's agrochemical self-reliance. 
  • Strategic Partnerships: During the quarter, AIL entered a long-term strategic agreement with DCM Shriram, securing a chlorine supply of 200 tonnes per day for the upcoming downstream facility at Zone IV, supplementing the existing 150 tonnes per day. 

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