ARIES - Aries Agro

📊 NSE: ARIES 🏢 Fertilizers 📅 Last Updated: 12/13/2025 18:29

💰 Financial Performance

Revenue Growth by Segment

The company operates in a single primary business segment (Micronutrient Fertilizers). Standalone gross revenue grew 17.22% YoY to INR 778.35 Cr in FY25 from INR 664.03 Cr. 9MFY24 revenue grew 9% YoY to INR 530 Cr, while FY22 revenue grew 15% to INR 548 Cr driven by 20% volume growth.

Geographic Revenue Split

A major portion of revenue is derived from the domestic Indian market. International contributions are increasing, specifically from the UAE units in Fujairah and associate company Amarak Chemicals FZC, which led the 17.22% standalone revenue growth in FY25.

Profitability Margins

Operating margins were 7% in FY22, 8% in 9MFY23, and 9.3% in 9MFY24. Full-year FY24 operating margin is estimated at 7.5%, with a medium-term target of 7.5-8.0%. Net Profit before tax for the six months ended September 30, 2025, was INR 42.55 Cr compared to INR 34.61 Cr in the previous period, a 22.9% increase.

EBITDA Margin

Operating margins (EBITDA equivalent) fluctuated between 7% and 9.3%. The margin dip of 300 bps to 7% in FY22 was due to a 200 bps moderation in gross margins and increased marketing spends for farmer education.

Capital Expenditure

Historical capex was INR 5-10 Cr per annum. Planned capex increased to INR 30 Cr for FY24 and further to INR 30-40 Cr for FY25 to support capacity and infrastructure.

Credit Rating & Borrowing

CRISIL Ratings maintains a 'Positive' or 'Stable' outlook. Interest coverage ratio is healthy, expected to remain above 4-5 times. Total debt significantly declined from INR 172 Cr in FY19 to approximately INR 60-65 Cr in FY24 due to efficient working capital management.

⚙️ Operational Drivers

Raw Materials

Specific raw materials include Sulphur, Nitrogen, Phosphorus, Potassium (NPK) components, and various micronutrient chelating agents. Raw material costs represent a significant portion of the cost structure, with gross margins impacting operating margins by approximately 200 bps in volatile periods.

Import Sources

The company historically imported Water Soluble NPKs from China but is actively substituting these with 'Made in India' High Density NPKs. Other materials are sourced globally and domestically to serve units in India and the UAE.

Capacity Expansion

Current domestic installed capacity is 95,400 MT p.a. with a 76.32% utilization rate as of FY25. The UAE plant produced 8,751 MT of Sulphur Bentonite and other products.

Raw Material Costs

Raw material costs are subject to global price volatility. The company uses calibrated price hikes and a strategy of lowering dependence on imports to sustain gross margins.

Manufacturing Efficiency

Domestic capacity utilization is at 76.32%. Efficiency is also driven by rationalizing the product portfolio and introducing high-density formulations.

Logistics & Distribution

The company maintains an extensive reach with over 9,600 distributors, 86,000 retailers, and presence in 200,000 villages, serving 8 million farmers.

📈 Strategic Growth

Expected Growth Rate

10-12%

Growth Strategy

Growth will be achieved through farmer education initiatives to increase micronutrient awareness, expanding the 'Made in India' High Density NPK portfolio to replace Chinese imports, and leveraging the UAE manufacturing hub for international sales expansion.

Products & Services

Chelated micronutrients, Plant Nutrient Solutions, Sulphur Bentonite, and High Density NPK fertilizers.

Brand Portfolio

Aries, Aries Agro.

New Products/Services

Introduction of High Density NPKs as a substitute for Chinese water-soluble variants; new nutrient formulations to meet regional farming requirements.

Market Expansion

Expansion into international markets via the UAE (Fujairah) and deepening domestic penetration in 200,000 villages.

Market Share & Ranking

Established market leader in the chelated micronutrients segment in India.

Strategic Alliances

Partnership with associate company Amarak Chemicals FZC, UAE, for production and international sales.

🌍 External Factors

Industry Trends

The industry is shifting toward specialty nutrients and micronutrients as farmers move away from traditional bulk fertilizers. Aries is positioned as a first-mover in chelation technology with a 50-year track record.

Competitive Landscape

Competes with domestic fertilizer majors and importers of specialty nutrients; maintains edge through specialized product portfolio and farmer education.

Competitive Moat

The moat is built on a massive distribution network (86,000+ retailers) and deep brand trust among 8 million farmers, which is difficult for new entrants to replicate quickly.

Macro Economic Sensitivity

Highly sensitive to agricultural GDP and monsoon patterns. A 10% deviation in monsoon rainfall significantly impacts quarterly revenue representative of full-year performance.

Consumer Behavior

Increasing farmer awareness of soil health and micronutrient deficiency is driving a shift toward higher-value specialty fertilizers.

Geopolitical Risks

Trade barriers or supply chain issues with China impact the sourcing of water-soluble NPKs, prompting a shift to domestic manufacturing.

⚖️ Regulatory & Governance

Industry Regulations

Subject to the Fertilizer Control Order and various state-level licensing for distribution and manufacturing standards.

Environmental Compliance

Operates under fertilizer industry regulations; specific ESG cost values not disclosed.

Taxation Policy Impact

Current tax for the half-year ended Sep 2025 was INR 10.82 Cr on a consolidated basis.

Legal Contingencies

The company undergoes regular audits of internal financial controls; no specific high-value pending court cases or litigation values were disclosed in the provided documents.