Acutaas Chemicals Ltd (ACUTAAS) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to Acutaas Chemicals Ltd Q2 FY '27 earnings conference call hosted by Equirus Securities Private Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Siddharth Gadekar from Equirus Securities Private Limited. Thank you, and over to you, sir.
Siddharth Gadekar (Equirus Securities Private Limited): Good evening, everyone, and thank you for joining us on Acutaas Chemicals 2Q FY '27 earnings conference call. Today, we have with us Acutaas Chemicals management represented by Mr. Naresh Patel, Chairman and Managing Director, Mr. Abhishek Patel, Vice President, Strategy, and Mr. Bhavin Shah, Chief Financial Officer. I would now like to invite Mr. Bhavin Shah to initiate the proceedings. Over to you, sir. Thank you.
Bhavin Shah (Acutaas Chemicals Ltd): Thank you, Siddharth. Good evening, everyone. We are pleased to welcome you all to our earnings conference call to discuss Q2 and H1 FY '27 financials. Please note that a copy of our disclosure is available on the Investors section of our website as well as on the stock exchanges. Please do note that anything said on this call, which reflects our outlook towards the future, or which could be construed as forward-looking statements, must be reviewed in conjunction with the risks that the company faces. The conference call is being recorded, and the transcript along with the audio of the same will be made available on the website of the company and exchanges. Please also note that the audio of the conference
Bhavin Shah (Acutaas Chemicals Ltd): Call is the copyrighted material of Acutaas Chemicals and cannot be copied, rebroadcasted, or attributed in press or media without specific and written consent of the company. Now, I would like to hand over the floor to our CMD, Mr. Naresh Patel for his opening statement. Over to you, sir.
Naresh Patel (Acutaas Chemicals Ltd): Thank you, Bhavin. Good evening, everyone. I hope you are all doing well. With Diwali just around the corner, I would like to extend warm wishes from the Acutaas family to you and your loved ones. May this festival season bring you, bring joy, prosperity, good health, and success to everyone. Wishing you and your family a very happy Diwali. I will start my remarks with pharmaceutical intermediate business. Demand environment remains robust and whatever cost pressures we face due to geopolitical issues, we have been able to pass them on successfully. On the generic side, several large products are going off-patent. We have already developed intermediates for those products long back. Therefore, we are benefiting from our strategy of developing products ahead of the market. Coming to CDMO, during our Q3 FY '25 earning call in January 2025, we had shared our ambition of achieving 1,000 crore in CDMO revenue by FY '28. Based on the current orders of existing as well as new CDMO contracts, we now believe we will achieve this target 1 year ahead of schedule. It means by in FY '27, we will be achieving this 1,000 crore. Here, I would like to highlight that we continue to add very exciting products to our CDMO pipeline. A couple of these products we have potential to become billion-dollar product for our innovator customers. Here, I would like to say that this CDMO business will be double in next three financial year. It means from 1,000 crore to new achieve new target we have set as 2,000 crore by FY 2030. Now, let me move to specialty chemicals. Starting with battery chemicals, from industry point of view, demand continues to exceed supply. I'm happy to share that this was our first quarter of commercial revenue from battery chemicals business. Initial commercial shipment of our third product were dispatched during last quarter. We will see scale up of third product in coming quarters. We have also sent pilot-scale validation batches of fourth product to the customers. Overall, the start is very encouraging, and I believe we will see a very strong ramp-up as we already have orders in our hand. Coming to semiconductor chemicals, I'm happy to share that we have inaugurated our plant in South Korea ahead of schedule. This state-of-the-art facility will manufacture chemicals that goes into photoresists, packaging material, etching materials, and other semiconductor applications. We have been submitting multiple qualification batches to customers in South Korea, which showcase strong customer traction. I believe FY '28 will be year of ramp-up for initial products while we will continue to add more products into the basket. Moving to BFC, BFC is seeing strong order demand from its US customers as well as we have started receiving orders from Korean and Japanese customers. During the last quarter, our US customer was acquired by another US-based company. This caused a temporary pause in the shipments. Supplies have now resumed, and operations are back to normal. On commodity chemicals, phasing out of old product is going on as per plan, and that is visible in our numbers as well. During Sorry. Turning to
Abhishek Patel (Acutaas Chemicals Ltd): Good evening, everyone. Let me share some additional insights into our business performance for the quarter. Starting with Advanced Pharmaceutical Intermediates segment, this segment delivered robust performance with revenue of 4,020 million in Q2 FY '27, reflecting a strong year-on-year growth of 53.1%. CDMO business continued its strong growth trajectory supported by robust growth in core pharmaceutical business. We are happy to share that we delivered more than 25% year-on-year growth in our core business this quarter driven by ramp-up of new products as well as strong growth in top products. We are happy to share that we have received orders for new CDMO contracts, which are expected to start contributing revenue from H2 FY '27. Moving on to Specialty Chemical segment, the revenue of quarter was 349 million INR 349 million, which is down 20% YoY driven by phasing out of old commodity products as well as temporary pause in shipment in BFC business due to ownership change of the US customer, as highlighted by Naresh Bhai. I'm happy to share the shipments have started, and we are very much on target to deliver a growth in BFC this year. Now turning to the CapEx. CapEx for H1 FY '27 was Rs. 1239 million. It is spread across electrolyte additive project, pilot plant, Indichem site and maintenance CapEx. Furthermore, for the full year, we believe our total CapEx would be around Rs. 3,000 million. So in H2 FY '27, we plan to do additional CapEx of Rs. 1650 million CapEx, which will be around which will have around 1,000 million for electronic grade chemicals, Rs. 450 million for second phase of electrolyte additive CapEx, and remaining will be for the maintenance CapEx. Please note this calculation does not include planned R&D CapEx as well as the land acquisition. With that, I will now handover our floor to our Chief Financial Officer Bhavin Shah, who will walk you through details related to financials. Over to you, Bhavin Bhai.
Bhavin Shah (Acutaas Chemicals Ltd): Thank you, Abhishek Bhai. I would like to briefly highlight the key performance metrics for the quarter and half-year before we open the floor for questions. Let me start with quarterly performance. Revenue from operations for the quarter reached 4369 million, representing 42.7% growth YoY. Gross profit for the quarter was 2715 million, reflecting 59% increase compared to the same period last year. The gross margin expanded by 637 basis points YoY to 62.1%. Gross margin was driven by higher contribution from Pharma Intermediates business compared to the same period last year. EBITDA for the quarter was 1,760 million, up 84.6% YoY. EBITDA margins were at 40.3%, up 914 basis points YoY. EBITDA margin was driven by expansion in gross margin as well as operating leverage. PAT for the quarter was 1,231 million, up 71.4% YoY. PAT margins for the quarter were at 28.2%, which show an expansion of 472 basis points YoY. Moving on to the half-yearly numbers. Revenue from operations for H1 FY '27 was 7,666 million, representing 49.3% growth YoY. EBITDA for H1 FY '27 was 2,890 million, up 97.7% YoY. EBITDA margins were at 37.7%, up 922 basis points YoY. PAT for the first half FY '27 was 1,981 million, up 71% YoY. PAT margin for H1 FY '27 were at 25.8%, which show an expansion of 328 basis points YoY. Moving to the balance sheet item, net cash and cash equivalents were around 3,009 million as on 30th September, 2026. Our working capital for the quarter stands at 115 days vis-a-vis 99 days in Q1 FY '27. This was driven by higher debtor days. With that, I request the moderator to open the floor for questions. Thank
Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles.
Moderator: The first question comes from the line of Abhijit from KIE. Please go ahead.
Abhijit (KIE): Yeah. Good afternoon. Thank you so much, and congratulations on the very strong results. just on the new CDMO products that you mentioned which will begin contributing in 2H, any sense you could give us on the revenues that we should expect in this financial year itself? And then when we are speaking about this target of doubling CDMO revenues in the next three years, how much would be the contribution of these newer products within that target?
Bhavin Shah (Acutaas Chemicals Ltd): So, I'm afraid that I will not be able to share the product-wise revenue guidance. That's the reason we are saying that we have we are very much confident to close this year with 1,000 crore revenue in CDMO segment because we have already got some good orders for the some of the products which were already validated few quarters back and now we are getting the orders. And we see a very good new business opportunity in this new CDMO as well as some of the CDMO pipeline which we are expecting to get a good revenue generation in coming quarters and the years. That's the reason we are giving the 1,000 2,000 crore kind of guidance for next three years. But I'm afraid I will not be able to share the any product-wise revenue bifurcation.
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