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As per this news, its a D-to-M or direct to mobile concept. Basically they will allow mobile manufacturers to embed a chip into handsets for accessing broadcast radio head developed by the company.

Basically what I understand is they will sell this to handset manufacturer to be inbuilt into phones.

Until they disclose more, nothing is given out.

While you can see significant progress in our strategic focus areas, we have had operational headwinds in Q1. While our revenue grew 28% YoY in a seasonally weak quarter, we had pressure on our profitability. Our EBITDA and PAT margins are industry-leading even at Q1 levels, but it is lower than the levels we have operated at in the past. We have delivered 20%+ EBITDA for the past 5 quarters and that is the level we continue to aspire for. Our operational headwinds in Q1 is due to a combination of external and internal factors:

Market disruption: We saw market disruption of pricing both in NLD and ILD business in select customers which impacted our EBITDA. We have been quick to respond by taking an approach of making focused investments on our priority customers. We are confident that at the end of this cycle, we will come out stronger with our customers and be able to get back to better profitability systematically over the course of this financial year.

Legacy systems and infrastructure modernization: From an internal perspective, we had some challenges in scaling our legacy infrastructure as our volumes have scaled substantially over the years. We have used this opportunity to completely modernize our legacy systems and infrastructure to the highest standards. We had an impact in Q1 on EBITDA, but we do not see this impact going forward.

Forex impact: The sharp depreciation of the Euro against the USD had an impact on EBITDA.

More details here

Notes from AR – Aarti Drugs, FY 21-22-

1. Established in 1984. A significant part of Aarti group specialising in APIs, Speciality chemicals, Intermediates and Formulations with Pinnacle Life Sciences as its fully owned subsidiary. Has state of the art manufacturing plants in HP, Maharashtra and Gujarat. Has a total of 12 manufacturing plants with an installed capacity of 49000 MT. Also has 02 R&D facilities – both in Maharashtra.

2. Aarti drugs is the largest manufacturer of following drugs in the world –

Fluoroquinolones group like – Ciprofloxacin, Levofloxacin, Ofloxacin etc ( all anti biotics )
Tinidazole ( anti protozoals )
Celecoxib ( NSAID )
Nimesulide ( NSAID )
Metronidazole Benzoate ( anti biotic )
One of the Leading producer of Metformin
Ketoconazole ( anti fungal )

3. Produces a total of 50+ APIs. 37% of revenues is from exports. Out of a total of 12 facilities, 10 are dedicated API facilities. Brownfield expansion of Tarapur Speciality Chemicals facility is complete and scale up batches have started from May 22. Production is likely to be scaled up by end FY 23

4. Last 5 Yrs financials –

Sales – 1245, 1563, 1808, 2159, 2500 cr
EBITDA – 200, 210, 263, 442, 341 cr
EBITDA margins – 16 pc, 13.5 pc, 14.5 pc, 20 pc, 14 pc
PAT – 82, 90, 141, 280, 205 cr
Debt to equity – 1.19,0.89, 0.58, 0.38, 0.52
ROE – 16.3, 16.7, 20.6, 35.8, 21.1

Management agrees that China + 1 factor is playing out to their advantage in the API sector.

5. Current Sales break down –
   APIs – 80 pc
   Formulations – 11 pc
   Intermediates – 5 pc
   Spl Chems – 4 pc

6. Capex spending for FY 21-22 stood at 152 cr. For this year, Capex plans are to the tune of 250-350 cr. For FY 21-22 API volumes increased 10 pc owing to strong growth in chronic therapies due fresh commissioning of anti-diabetic capacity and ongoing expansions. Speciality chemicals and Intermediates also grew by 28 pc each. Over next 5 yrs, company intends to spend 600 cr on Capex. This expansion will encompass backward integration for APIs and formulations to reduce costs. Product wise capex plan for next 5 yrs –

Anti – diabetics – Aim to be the largest Metformin player in the World. Aim to launch Gliptins to further strengthen this therapeutic category.

Fluoroquinolones – further 40 pc brownfield expansion for these anti-biotics.

Ant-Protozoals – Further consolidate leadership in Indian Mkt with existing tech and Chinese JV. Plans to further backward integrate and apply for PLI

Vitamins/ Anti-Inflammatory – Multi purpose facility under construction.

Cardiovascular – Aim to double the existing capacity.

Anti-fungal – Further consolidate world wide leadership.

Speciality Chemicals – Incremental expansion of multi purpose chloro-sulphonation line in existing block

Disc : invested, biased.