Aether Industri.

Aether Industries reported a robust FY26, with consolidated revenue growing 38% YoY to INR11,601 million and EBITDA increasing 53% YoY to INR3,547 million. EBITDA margin expanded by 300 basis points to 31%. However, Q4 FY26 saw a sequential decline in revenue to INR3,051 million and PAT to INR540 million, primarily due to a INR70 million inventory write-off from a fire incident and the absence of a one-off^📎 INR200 million FLOP claim income recognized in Q3.

The company is on track with its ambitious expansion plans, with FY26 capex at INR3,838 million and an expected INR3,000-3,500 million for FY27, mainly for Site 5 and the new R&D site. Site 5 is a major focus, with 3 new large-scale manufacturing products (2 pharma, 1 agrochemical) expected to be commissioned by May end or early June 2026. The total Site 5 plan includes 20 production blocks over a 45-46 acre land bank, with 2 blocks already ready to run.

Aether is significantly enhancing its R&D capabilities, with an interim expansion including 2 new labs, 18 fume hoods, and a 400 MHz NMR machine, expected to commercialize from Q2 FY27. A new, larger R&D plant is under construction, slated for commissioning in Q2 FY28, which will double current R&D strength with 15 new labs and ~140 fume hoods. This investment supports a robust pipeline of new projects, particularly in material science and oil & gas sectors.

The company's strategic vision is to achieve 70% of revenues from CRAMS (Contract Research and Manufacturing Services) and CEM (Contract Exclusive Manufacturing) business models by FY30. In Q4 FY26, LSM contributed 43% of sales, while CRAMS and CEM together accounted for 55%. Management expects this proportion to increase further in FY27, driven by new CRAMS projects and the commercialization of Site 5.

Aether experienced strong pricing in its large-scale manufacturing segment in Q4, with prices increasing over 20% YoY and 18% QoQ, which are expected to be sustainable for the medium term. The company also demonstrated improved working capital management, reducing its overall working capital cycle to 179 days as of March 31, 2026, from 194 days in the previous year. Further reduction to 160 days, targeting 150 days, is expected by the end of FY27.

Management highlighted significant opportunities in global markets, particularly in material sciences and oil & gas, with the semiconductor materials opportunity expected to triple by 2030. Aether's competitive advantage is attributed to its strong R&D capabilities, chemical engineering expertise, economies of scale, and India's cost-competitive strategic location, enabling it to compete effectively against global players like BASF and Lanxess.

Aether is strengthening its leadership team, including the addition of Mr. Guenter Stevens for global technology and business development, bringing expertise in material sciences and application testing. The company is also progressing towards its '10x10' competencies goal, currently at '9x9' and aiming to reach '10x10' by the end of 2026, signifying a continuous expansion of its technological and chemical capabilities.