AKUMSNSEQ4 FY 2025-26May 21, 2026

Akums Drugs and Pharmaceuticals Limited

8,725words
136turns
19analyst exchanges
5executives
Management on call
Sandeep Jain
MANAGING DIRECTOR – AKUMS DRUGS & PHARMACEUTICALS LIMITED
Sumeet Sood
CHIEF FINANCIAL OFFICER – AKUMS DRUGS & PHARMACEUTICALS LIMITED
Sahil Maheshwari
GENERAL MANAGER,
Ankit Jain
HEAD, INVESTOR RELATIONS – AKUMS DRUGS & PHARMACEUTICALS LIMITED
Abdul Puranwala
ICICI SECURITIES
Key numbers — 40 extracted
25 million
n the Zambia partnership, the project remains on track with commercial supplies of approximately $25 million from our Indian facilities to Zambia expected to commence by the end of Q2 FY27 along with the pr
INR1
h for the CDMO business. The Board has also recommended final dividend for the year FY 2026 for INR1 per equity share and a special dividend of INR2 per equity share. We thank all the stakeholders fo
INR2
commended final dividend for the year FY 2026 for INR1 per equity share and a special dividend of INR2 per equity share. We thank all the stakeholders for their continued trust and patience through wha
INR4,359 crore
yone. I will take you through the financial highlights. Revenue for the fiscal year 2026 stood at INR4,359 crores as compared to INR4,170 crores in FY 2025, an increase of 5.8%. Adjusted EBITDA stood at INR52
INR4,170 crore
financial highlights. Revenue for the fiscal year 2026 stood at INR4,359 crores as compared to INR4,170 crores in FY 2025, an increase of 5.8%. Adjusted EBITDA stood at INR522 crores. This is the highest tha
5.8%
scal year 2026 stood at INR4,359 crores as compared to INR4,170 crores in FY 2025, an increase of 5.8%. Adjusted EBITDA stood at INR522 crores. This is the highest that we've seen over the recent pa
INR522 crore
crores as compared to INR4,170 crores in FY 2025, an increase of 5.8%. Adjusted EBITDA stood at INR522 crores. This is the highest that we've seen over the recent past as compared to INR461 crores in the pr
INR461 crore
A stood at INR522 crores. This is the highest that we've seen over the recent past as compared to INR461 crores in the previous year, increasing by 13.3%. Adjusted EBITDA margin stood at 12% against 11.2% in
13.3%
we've seen over the recent past as compared to INR461 crores in the previous year, increasing by 13.3%. Adjusted EBITDA margin stood at 12% against 11.2% in FY 2025. PAT stood at INR256 crores as co
12%
pared to INR461 crores in the previous year, increasing by 13.3%. Adjusted EBITDA margin stood at 12% against 11.2% in FY 2025. PAT stood at INR256 crores as compared to INR344 crores in FY 2025. Las
11.2%
461 crores in the previous year, increasing by 13.3%. Adjusted EBITDA margin stood at 12% against 11.2% in FY 2025. PAT stood at INR256 crores as compared to INR344 crores in FY 2025. Last year, there
INR256 crore
increasing by 13.3%. Adjusted EBITDA margin stood at 12% against 11.2% in FY 2025. PAT stood at INR256 crores as compared to INR344 crores in FY 2025. Last year, there was a significant benefit of deferred
Guidance — 20 items
Sandeep Jain
opening
“During Q4 FY26, we maintained the business momentum of last quarter and ended FY26 on a strong note, despite a very challenging H1 FY26.”
Sandeep Jain
opening
“We have commenced dossier filing and country-specific registrations across multiple European markets, in line with our stated plan to commence commercial supplies from Plant 2 in FY28.”
Sandeep Jain
opening
“On the Zambia partnership, the project remains on track with commercial supplies of approximately $25 million from our Indian facilities to Zambia expected to commence by the end of Q2 FY27 along with the project planning and erection of the local manufacturing facility.”
Sandeep Jain
opening
“While Akumentis, the domestic branded formulation business, reported modest revenue growth during the year, margins in the business expanded meaningfully validating the efficiency- focused strategy as we head into FY27.”
Sandeep Jain
opening
“We expect this segment to grow at above IPM rates, driven by new launches, focus on brand building, and continued emphasis on field force productivity.”
Sandeep Jain
opening
“We expect this segment to return to growth as we are confident of the structural attractiveness of our chosen geographies.”
Sandeep Jain
opening
“Going forward, we expect a stabilized though much smaller profit-oriented footprint going forward.”
Sandeep Jain
opening
“As volumes build in over FY27 and FY28, these facilities will drive next leg of growth for the CDMO business.”
Sahil Maheshwari
qa
“Secondly, on the investments required, so this will be tied down to what projects in the future we get, or which capabilities with dosage forms we have to expand.”
Sajal Kapoor
qa
“So, there will be some negative pressure coming from that side of the negative loop.”
Risks & concerns — 13 flagged
In the API business, pricing pressure in the cephalosporin persisted through most of the year, resulting in continued losses.
— Sandeep Jain
Q4 revenue stood at INR102 crores, decline of 1.5% year-on-year and 11.1% quarter-on-quarter.
— Sumeet Sood
For Q4 revenue was INR36 crores, a decline of 9.7% year-on-year and 28.5% quarter-on-quarter.
— Sumeet Sood
For the trade generic business, the revenue stood for FY 2026 at INR100 crores compared to INR115 crores FY 2025, a decline of 13.2%.
— Sumeet Sood
For the API business, in the current year, the revenue stood at INR184 crores compared to INR219 crores in FY 2025, a decline of 15.9%.
— Sumeet Sood
For Q4, revenue stood at INR41 crores, a decline of 18.8% year-on-year and 24.9% quarter-on- quarter.
— Sumeet Sood
So, there will be some negative pressure coming from that side of the negative loop.
— Sajal Kapoor
The revenues have seen a sharp decline, but the margins have improved to 28%.
— Aanchal Maheshwari
So, what we thought through was more cautious approach on price growth, while the focus was on volume growth.
— Sahil Maheshwari
Rightly, the ones which suffered a significant decline in prices are the ones which picked up in this April post-war.
— Sahil Maheshwari
Sir, if we take our mix of revenues and as alluded by you that we had pressure on the API segment and that getting negated with the current year.
— Saket Kapoor
We expect that while the full year would still remain negative, this will be sizably lower and would have a significantly lower drag on our P&L.
— Sahil Maheshwari
As of now, we are still evaluating when to enter, at which states to enter, given if you also have read some news last week when we have been witnessing in the industry itself, the pricing still remains very volatile and going down south.
— Sahil Maheshwari
Q&A — 19 exchanges
Q
Hi. Thank you for the opportunity. Hi team. A couple of questions. As your European and regulated market business ramps up, which specific internal capabilities currently least scalable? Is it regulatory filing throughput or quality systems or tech transfer? Is it leadership bandwidth or manufacturing facility? Because the capability that is required to compete successfully in highly regulated markets are somewhat different compared to Indian market, right? So, that's one part of the question. And if you can also help in terms of what concrete investments are being made today to get to a level
Sahil Maheshwari
So, Sajal, this is Sahil from Akums. On the first question, obviously, reg market play requires stringent capabilities compared to the domestic capabilities. A few points why we are -- we think we are capable to serve those markets is one is we already serve large Indian customers and MNCs Indians markets who themselves have a strict KRA sheet of how they operate. So, we have been serving MNCs for over 15 years now in India from the likes of all the large MNCs in India across their multiple products, be their regular established ones or the new DCGIs. Also, we received our first European GMP a
Q
Yes, sure, no problem. Thank you.
Management
Q
Hi sir. So, last 2 quarters, the volume variance has been north of 25%. So, what is driving this? And what is your outlook on the same? And the price variance has been a negative 3.5% on an average in the last few quarters. With API prices rising 10% to 20% on an average, will this reverse going forward? And if prices sustain, can we deliver a double-digit growth in the CDMO business by virtue of the same?
Sahil Maheshwari
Sure. So, as you rightly pointed out, over the last two quarters in the H2, the volume growth has been significant. What we have seen, as we also discussed this in Q3, this is primarily led from existing customers only. So, this is not new geographies or new customers. So, what we are seeing is increased demand for existing brands from the existing customers only. So, honestly, what it is driving is still to be thought through and looked out, but because the overall IPM is still growing at 1%, 1.5%, but we think that this is a sustained growth because similar double-digit growth is also visibl
Q
Thank you for the opportunity sir. Hope I’m audible.
Sahil Maheshwari
Yes. Sir, my question is on the model side. So, in CDMO for Q4 FY26, our margins have expanded to 14.4%, even though we had a product mix base which was adverse product mix of around INR100 crores. Can you explain the model forward here, like I understand it is a cost plus margins, but whether it's a percentage margins or a margin fixed on an absolute basis. My question stems out on the case where even though the base portfolio carries lower absolute conversion margin compared to the niche, how could this adverse mix improve our EBITDA margins this quarter? What am I missing here, sir, like on
Q
Hello, sir. Thank you for taking my question. Sir, I wanted to understand in terms of CDMO, what kind of overall revenue growth are we expecting this year? Because you said API prices have improved, which will be a pass-through, but they are still lower than last year and volume growth, you said we will be expecting double-digits. So overall, what kind of revenue numbers and margins are we expecting?
Sahil Maheshwari
So as I said, we have visibility for 45 to 60 days of our revenue book. So what we said is in Q1, Q2, as we can see, we expect a double-digit volume growth, right? So while H2 still has to be seen through the pricing, as I also mentioned in my last, API prices are transiently high. Whether they stay at the current levels, go down, go further up, we still have to see as we go along. But this is what we can say for H1. And as we talk through in the next quarter, we can give more flavor on Q3 and Q4. And any color on the margin side, sir, we have seen improvement in Q4. So what kind of numbers ca
Q
Yes. Thank you for giving me the opportunity. My question is related to the execution of lease deal, which we have done for land in Haridwar. I wanted to know the purpose of this execution and expansion plans for this land in future?
Sahil Maheshwari
So simply, if you really look at the history of Pure and Cure at Haridwar, we have gradually expanded our operations there by acquiring nearby land sites and so on. This is how we have grown historically across Haridwar. So, this is simply one of those activities we will need for expansion of our capacities as well as building utility support and so on. Okay. Understood. And my second question is related to the European contract of EUR200 million, how much of this is expected from the first year? Will it be a EUR40 million commitment every year? Or there is some clause of initially the amount
Q
Yes. I had just one question on international branded business side. The revenues have seen a sharp decline, but the margins have improved to 28%. Is there a reason for that?
Sahil Maheshwari
So certainly, so what we are focusing on is a more -- we are investing into marketing. While the business is small, which honestly was not one of the best years for the exports business. And we are hopeful this business will be shaped well this year. Margin expansion has come from two reasons. One is we are focusing on marketing brands rather than just pure B2B play. It is more B2B2C, wherein we are doing the marketing, so seven, eight countries. We have our own field force, extensive field force. We have over 10 countries where we have our country managers. So that's there. Also, we got some
Q
Hi. Can you just repeat that -- in the CDMO business, you get a markup on bill of material. So when the API prices are going down, what does it do to your absolute amount of profits you make or percentage margins you report? And relatively when API prices are going up, then will you experience a reverse of that phenomenon?
Sahil Maheshwari
Yes, you answered it correctly. These are percent margins and hence, if the input materials go down, the absolute margins also go down. Absolute profits go down. Okay. Correct. And the second question I have is the trade generics side. You are a manufacturer of these drugs. Then why are you not making money? What's wrong with this industry structure that you should be the lowest cost producer of these drugs and directly selling to pharmacists through the distributors? So what is it that this segment is having an issue in the industry structure, which is causing this phenomena? So this is hones
Q
Am I audible?
Management
Q
So what was the capex for FY26? And how much are we going to spend in this year?
Sumeet Sood
So FY26, we did a capex of INR222 crores. And this year, we are targeting to keep our capex to INR300 crores. That's the target for our capex. All right, sir. And any top line target for the whole year FY27? No ma'am, we do not want to answer this question. We don't want to state future numbers. Okay, sir. Thank you.
Q
Yes, hi. Good afternoon. Thanks for taking my question. Sir, I have a couple of questions. When we had a phase of API declines in the last year, it was kind of led by cepha crisis. And now when you -- please, correct that understanding if it's wrong. And now when you say that sequentially, there has been a little bit of bounce back, is it fair to assume that the bounce back is also led by cepha API prices?
Sahil Maheshwari
So in the API business or the CDMO business, the CDMO business you're talking about? Yes. But I want a view on the cepha API crisis. Sure. So the -- if you see and analyze the data, not just cepha, most of the APIs over the last year have gone down as simple as paracetamol went down, metformin went down, anti-infectives went down. So all of those went up. Rightly, the ones which suffered a significant decline in prices are the ones which picked up in this April post-war. So those numbers still have to come out because these are the numbers we are talking about till March. And likely, we'll hav
Q
Yes. Namaskar, sir. Namaskar, sir, hope I’m audible. Sir, I'm new to this company and the sector, so pardon me for my question. Sir, if we take our mix of revenues and as alluded by you that we had pressure on the API segment and that getting negated with the current year. So if you could just give us some more understanding with the type of commissioning of orders, especially for the -- I think Zambia nation, which you mentioned, how should the current year probably shaping up in terms of the different verticals, sir? I guess this summary on the same.
Sahil Maheshwari
Sure. So CDMO, we have talked about extensively. At least for the H1, we see a strong volume growth and the API prices, I think, should remain at current levels. So that's how we look at the CDMO segment. The domestic marketing we talked about, we should be targeting an IPM level low single digit -- high single digit, low double-digit kind of growth in the domestic Akumentis. For exports as well, while the last year was flat. This year, we expect to do a double-digit growth in that segment as well, and the margins should sustain -- the margin profile should sustain. On the trade generics, we h
Q
Thank you for the opportunity. Am I audible?
Management
Q
Yes. Sir, my question is on the European contract for which you have already received in advance. From what I understand, it's not based on cost plus basis, but it's a lump sum contract. So could you just give some insight on how the margins could play out in case there is an inflationary environment in the raw material side?
Sahil Maheshwari
Right, Richa. So while we are finalizing the contract, so this is an established product, established molecule over the last few decades now. So, we have already taken into our costing the inflationary patterns of that API and the input materials. At the current API prices, we are fairly confident this remains our comfort zone of the margins we are thinking through. And you are right, this is a fixed price contract till 2032. So at current API prices, the margins that you expect more or less in line with the current CDMO is it expected to be higher? It should be similar or high teens. So this
Q
Yes. Hi, I hope I'm audible. So thank you for the opportunity. So first question, just to follow- up on the previous participants, so about having a CDMO relation with eight to 10 overseas customers. So I mean Sahil, if you can talk about, what stage we are into in terms of discussion and what kind of an investment we will have to do to bring or you know, take that relationship ahead with those customers?
Sahil Maheshwari
So these are long-term contracts, right, and require sizable time investment as well. So as I heard you, right, you are talking future CDMO export customers, right? Yes, yes. So, these require sizable investment in time, dossier clearances and so on. So, require two, three years until we ramp them up. So in terms of manufacturing capabilities, we are largely. So we are only taking our -- those facilities, which we have already constructed. So we are not thinking to a new facility and new dosage form and then take it up to the global level. We already have a new injectable facility, we already
Q
Thank you. Hello?
Management
Q
Yes, hi. Thank you. Thank you for the follow-up. So just a quick one really. Given the net cash on the balance sheet we have and the sustainable operating cash flow, there might have been many options on the table in terms of should we do X or Y in terms of both domestic and international expansion. Can you just help me out with one or two areas which the team evaluated and decided not to pursue, despite a strong cash position? Thank you.
Sahil Maheshwari
Sure. Sure. So if I talk about inorganic growth per se, so we -- there are some dosage forms we still don't have. For example, Metered Dose Inhalers, we don't have. For example, we still don't have oncology injectables. And a few other dosage forms in small molecules. Within the large spaces, we are still not present into the large molecules. So, these are a few opportunities we evaluated. And obviously, we have to be cognizant of also the investment and the return expectation. So, at times, it does not match up to our expected valuations or it does not match up to the plant standards or the p
Q
Hi. Thank you for taking my question. Just with respect to our international CDMO contract, when I'm looking at FY28, so we will have around EUR70 million of revenue, right, from Zambia and the EU contract, which is around INR680 crores of top line. So is this the right way to say that export CDMO will be around 15-plus percent share in CDMO revenues in FY28?
Sahil Maheshwari
Simply on the Excel looks a good number. Yes, so this is how we think through that next year, we should -- once we start, right, as I said, on a MAT basis, the European contract will give us EUR35 million. And the Zambia ones are FY driven. So we'll have FY $25 million this time in '28 and FY27 and '28 each. So just a follow-up. These contracts will effectively have, assuming will have better margin just because of favorable FX movement. So do we see our CDMO margin, which has been in the 13% to 14% level improve to a 15%, 16% level? We can think through that the base margins for the business
Q
Thank you, everyone, for attending the Q4 and FY26 earnings call for Akums. If you have any remaining questions, you can reach out to the Investor Relations team. Thank you and have a good day.
Sandeep Jain
Thank you. Namaskar.
Speaking time
Sahil Maheshwari
42
Moderator
21
Praveen Jayaraman
10
Sajal Kapoor
7
Ankur Kumar
6
Abdul Puranwala
5
Sumeet Sood
5
Avnish Burman
5
Saket Kapoor
5
Richa
5
Opening remarks
Abdul Puranwala
Yes. Thank you, operator. Good afternoon, everyone, and on behalf of ICICI Securities, I welcome you all to the Q4 FY26 earnings conference call of Akums Drugs & Pharmaceuticals Limited. Today on this call, we have with us the following members from the management team. Mr. Sandeep Jain, Managing Director; Mr. Sumeet Sood, CFO; Mr. Sahil Maheshwari, General Manager, Strategy; and Mr. Ankit Jain, Head of Investor Relations. I now hand over the call to the management for their opening remarks, followed by which we will open the line for Q&A. Thank you, and over to you, Ankit.
Ankit Jain
Thank you, Abdul, for the introduction. Good afternoon, everyone, and welcome to Akums' Q4 and FY26 earnings call. I am Ankit Jain, and I head Investor Relations at Akums Drugs & Pharmaceuticals Limited. I will commence with our standard disclaimer that any discussion on today's call might include certain forward-looking statements, which are predictions or projections of future events. Our business faces several risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied in such statements. At Akums, we do not undertake any obligations to publicly update any forward-looking statements, whether as a result of new confirmation or future events or otherwise. I hope you would have had an opportunity to review our investor presentation and financials that we posted on Thursday evening. I would now like to hand it over to our Managing Director, Mr. Sandeep Jain to discuss our performance. Thank you.
Sandeep Jain
Thank you, Ankitji. Namaskar, everyone, and thank you for joining us today for our Q4 and full year FY26 earnings call. During Q4 FY26, we maintained the business momentum of last quarter and ended FY26 on a strong note, despite a very challenging H1 FY26. The operating environment through the first half was adverse - characterized by sharp erosion in API prices and prolonged phase of low volume growth in the domestic market. We, at Akums, managed to navigate the challenging phase due to the depth of our client relationship and quality of our manufacturing setup and at the same time, continue to invest for the future to ensure long-term sustainable growth. Coming to operating performance for the quarter, CDMO once again delivered a healthy top line growth led by double-digit volume expansion. We believe this reflects a structural strength supported by growing customer preference for compliant manufacturers. Our international CDMO journey continued to gather pace following the EU GMP ac
Sumeet Sood
Thank you, sir. Thank you, Sandeepji. Good afternoon, everyone. I will take you through the financial highlights. Revenue for the fiscal year 2026 stood at INR4,359 crores as compared to INR4,170 crores in FY 2025, an increase of 5.8%. Adjusted EBITDA stood at INR522 crores. This is the highest that we've seen over the recent past as compared to INR461 crores in the previous year, increasing by 13.3%. Adjusted EBITDA margin stood at 12% against 11.2% in FY 2025. PAT stood at INR256 crores as compared to INR344 crores in FY 2025. Last year, there was a significant benefit of deferred tax asset that was created due to the restructuring of the group. This was INR106 crores. I think important would be to look at the PBT, which probably would insulate the deferred tax asset. If we look at the PBT, we were at INR382 crores in FY 2026 compared to INR341 crores in FY 2025, an increase of 11.9%. If we look at the quarterly performance, revenue stood at INR1,158 crores. This was 9.7% higher year
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