Akums Drugs & Pharmaceuticals reported a strong performance for Q3 FY26, with operating revenue reaching INR1,160 crores, marking a 14.8% year-on-year increase. The highlight was the CDMO segment, which saw top-line growth of over 16% driven by strong volumes. Operating EBITDA stood at INR147 crores, improving margins to 12.7%. The company also detailed progress on key international projects in Europe and Zambia.
Q3 FY26 Financial Performance Summary
Akums Drugs & Pharmaceuticals announced robust financial results for the quarter ended December 31, 2025. Operating revenue for the quarter stood at INR1,160 crores, reflecting a 14.8% increase year-on-year. On a quarter-on-quarter basis, revenue rose 14% from Q2 FY26’s INR1,018 crores.
The total operating EBITDA for the quarter was INR147 crores, a year-on-year increase of 21%. This translated to healthy EBITDA margins of 12.7%, an improvement of 65 basis points year-on-year and 338 basis points quarter-on-quarter. EBITDA, including other income, reached INR181 crores, growing 33% year-on-year.
Profit after tax was reported at INR68 crores, an increase of 2.1% year-on-year. The company noted a one-time exceptional item related to a labour code impact of INR18.2 crores for the past period.
Segmental Performance Deep Dive
The company provided detailed performance metrics across its five key segments:
- CDMO Business: Revenue reached INR916 crores, marking a 16.3% year-on-year increase, driven by double-digit volume growth and improved capacity utilization. EBITDA for the segment was INR126 crores, up 3.7% year-on-year. Management indicated gross margins improved to 37.345% from 36.6% in Q3 FY25.
- Domestic Branded Formulation: Revenue stood at INR115 crores (4.2% YoY growth), though declining 5.8% QoQ. EBITDA was INR25 crores (25.1% YoY growth).
- International Branded Formulation: Revenue grew 18% YoY to INR50 crores, with EBITDA increasing 65.9% YoY to INR12.9 crores.
- API Business: Revenue was INR54 crores (35.4% YoY growth). EBITDA remained negative at INR7 crores due to continued pressure from softening cephalosporin prices, though losses were curtailed significantly from previous quarters.
- Trade Generics: Revenue declined 18% YoY to INR25 crores, with EBITDA remaining near flat at negative INR3 crores.
Operational and Strategic Updates
Management highlighted significant progress in establishing Akums as a global player:
- European CDMO Expansion: The oral liquids facility (Plant 2) received EU GMP accreditation and is on track to start supplies in FY ’28. The oral solid facility (Plant 1) renewed its EU GMP certification, and finished oral formulation supplies to Europe have already commenced from Plant 1 this fiscal year. The potential annual run rate for the European contract is EUR 35 million until December 2032.
- Zambia Project: Supplies of $25 million are expected from Indian plants to Zambia in H1 of FY ’27. Facility construction is set to begin shortly, with commercial supplies from the local plant expected around Calendar Year ’28. Margin profile for this project is expected to be in the 15% to 17% range initially.
- Automation Focus: The company initiated an SAP S/4HANA transformation to drive efficiency and real-time analytics, alongside implementing Darwinbox for HR automation.
The company maintains a strong liquidity position, with a cash surplus of INR1,573 crores and free cash flow of INR944.5 crores for the group.
Analyst Q&A Insights
During the Q&A session, the management confirmed that the CDMO volume growth was broad-based across existing and new brands and channels.
Regarding capacity utilization, management stated the current effective utilization stands at around 47%, with a sustainable peak estimate around 55% to 60% due to extensive changeovers required for manufacturing over 20,000 SKUs annually for approximately 1,500 customers.
On the Domestic Branded segment, while volume growth was low at 4%, profitability improved significantly as costs remained fixed while top-line increases flowed positively to the bottom line.
On the European contracts, pricing is currently based on a fixed pricing contract, unlike the typical cost-plus percentage model used domestically.
Source: BSE
