Company Overview

Business Profile and Operations

Aarey Drugs & Pharmaceuticals Limited is an India-based company engaged in the manufacturing of Active Pharmaceutical Ingredients (APIs), intermediates, and specialty chemicals. The Company is also involved in the trading of industrial solvents and chemicals. It is recognized as a manufacturer and supplier of pharmaceutical raw materials, chemicals, pharmaceutical ingredients, APIs, drugs, food colours, and flavours. The company's operations are governed by various central and state legislations regulating the pharmaceutical and chemical businesses.

The company operates across multiple product segments within the pharmaceutical and chemical industries. Its manufacturing includes intermediates such as Mono Methyl Urea, Di Methyl Urea, Ortho Para Nitro Anisole, 2-Bromomethyl-1,3-Dioxolane, and Uracil. The company's API portfolio includes Metformin Hydrochloride (HCl), Mefenamic Acid, and Doxophylline. Additionally, its chemical and solvents segment covers aromatics chemicals, chemical acids, chloralkaline products, industrial alcohols, industrial ketones, glycols and glycol ethers, fiber intermediates, industrial amines, acetates and esters, industrial oleochemicals, chlorinated solvents, industrial intermediates, industrial olefins, industrial phosphates, industrial fertilizers, industrial monomers, and general industrial chemicals.

Corporate History and Development

Aarey Drugs & Pharmaceuticals Ltd was originally incorporated on May 15, 1990, in Mumbai, as a private limited company named Niharika Textiles & Chemicals Pvt Ltd. The initial promoters were Prakash Mandhana, Kavita Mandhana, and Neeta Mandhana. In March 1993, the Aarey Group of companies, owned by the Ghatalia family, took over the company. Subsequently, it was converted into a public limited company, and its name was changed from Niharika Textiles & Chemicals Pvt Ltd to Aarey Drugs & Pharmaceuticals Ltd.

The company has undergone significant expansions and modernization efforts over the years. In 1993, it launched a public issue of 27,50,000 equity shares of ₹10 each, raising ₹275 lakh. The company's shares were listed on the BSE, ASE (Ahmedabad Stock Exchange), and DSE (Delhi Stock Exchange). In May 2009, the company initiated an upgrade of its existing plant to meet international standards.

Recent Product Development and Capacity Expansion

The company has consistently expanded its product portfolio through strategic additions.

- June 2016: Commenced manufacturing of Mono Methyl Urea & Di Methyl Urea.

- 2017-18: Added new products: Erithromycin Derivatives (10 m.t. capacity) and Mefenamic Acid (25 m.t. capacity).

- 2018-19: Commenced manufacturing of Ortho Para Nitro Anisole, 2-Bromomethyl-1,3-dioxolane, Mefenamic Acid, Metformin, and Uracil.

Financial Performance and Key Metrics

Recent Financial Results

The company's recent financial performance has shown mixed results:

- Revenue: ₹108.10 Crore as of March 2025 (Q4 FY25)

- Net Profit: ₹0.47 Crore as of March 2025 (Q4 FY25)

Aarey Drugs & Pharmaceuticals Ltd's net profit fell by -78.14% year-on-year to ₹0.47 Crore in Q4 FY2024-25.

Quarterly Performance Analysis

The company's quarterly performance has been volatile:

- Q3 FY25 (December 2024): Net profit declined by 29.41% to ₹0.72 Crore compared to ₹1.02 Crore in Q3 FY2023-24. Sales rose by 74.93% to ₹133.79 Crore compared to ₹76.48 Crore in the previous year's quarter.

- Q2 FY25 (September 2024): Net profit rose by 30.08% to ₹1.60 Crore compared to ₹1.23 Crore in Q2 FY2023-24. Sales increased by 81.81% to ₹105.14 Crore compared to ₹57.83 Crore in the previous year's quarter.

- Q1 FY25 (June 2024): Net profit rose by 72.22% to ₹1.24 Crore compared to ₹0.72 Crore in Q1 FY2023-24. Sales increased by 149.04% to ₹126.91 Crore compared to ₹50.96 Crore in the previous year's quarter.

Annual Financial Metrics

- Operating Revenue (TTM): ₹576.20 Crore.

- Annual Revenue Growth: -5% (Needs improvement).

- Pre-Tax Margin: 1% (Needs improvement).

- Return on Equity (ROE): 3% (Fair, but needs improvement).

- Debt to Equity Ratio: 2% (Signals a healthy balance sheet).

Market Position and Valuation

Stock Performance and Valuation Ratios

- Market Capitalisation: ₹142.68 Crore (as of April 2025).

- Price-to-Earnings (PE) Ratio: 25.07.

- Price-to-Book (PB) Ratio: 1.04.

52-Week Performance

The stock has experienced significant volatility over the past year:

- 52-Week High: ₹74.80

- 52-Week Low: ₹31.35

Leadership and Management

- Chairperson: Mihir R Ghatalia

- Company Secretary: Kailash Chand Jethlia

Stock Exchange Information

- Stock Symbol: AAREYDRUGS

- BSE Code: 524412

- NSE Symbol: AAREYDRUGS

- ISIN: INE198H01019

- Registered Office: E 34, MIDC, Tarapur Boisar, Thane - 401506, Maharashtra.

Investor Note: Investors should carefully evaluate the company's volatile earnings pattern and current operational challenges, while also considering its established position in the pharmaceutical manufacturing sector and its diverse product portfolio across APIs, intermediates, and specialty chemicals.

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