Akums Drugs and Pharmaceuticals Ltd (AKUMS) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day, and welcome to the Akums Drugs and Pharmaceuticals Limited Q2 FY '27 earnings conference call. 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 this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ankit Jain from Akums. Thank you, and over to you, sir.
Ankit Jain (Akums Drugs and Pharmaceuticals Limited): Good afternoon, everyone. Thank you, Swapnali, for introducing me. Welcome everyone to Akums Q2 FY '27 earnings call. I am Ankit Jain, and I head Investor Relations at Akums Drugs and Pharmaceuticals Limited. On today's call, we are joined by Mr. Sanjeev Jain, Managing Director; Mr. Sandeep Jain, Managing Director; Mr. Sumit Sood, CFO; Mr. Davinder Dogra, Deputy CFO; and Mr. Sahil Maheshwari, Head Strategy. 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 businesses face 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 obligation to publicly update any forward-looking statements, whether as a result of any new confirmation, future events, or otherwise. I hope you've had the opportunity to go through our financial results and review our investor presentation that were shared yesterday. I would now like to hand over the call to our Managing Director, Mr. Sanjeev Jain, to discuss our performance. Thank you.
Sanjeev Jain (Akums Drugs and Pharmaceuticals Limited): Thank you, Ankit. Namaste everyone, and thank you for joining us today for our Q2 FY '27 and H1 FY '27 earnings call. I am pleased to announce another quarter of strong performance by Akums, one of the world's leading pharmaceutical CDMO. The performance was driven by double-digit volume growth during the quarter. The revenue grew by more than 30% on year-on-year basis, and EBITDA more than doubled during the corresponding period. Even sequentially, the quarter-on-quarter revenue growth stood at an impressive 15%, and EBITDA increased by 11.5%. Led by strong order book and improved utilization of newer facilities, the CDMO business achieved a volume growth of more than 20% on Sep '26 net basis, showcasing increasing penetration of our offering within the India pharma market. The improved performance is also an indicator of our resilience during times of global headwinds and geopolitical uncertainties. While the availability and the prices of input materials remain volatile, the demand outlook for CDMO remains strong. We today operate at healthy utilization levels of above 50%. During the quarter, we successfully integrated the two manufacturing plants acquired from Oriflame. With this, we have strengthened our beauty and personal care play as a fast-growing category in India. To cater to growing demand, we will operationalize a new facility at Baddi. The plant will have oral solids in phase 1 with an annual capacity of over 6 billion units, which will fully operationalized by Q1 FY '28. With this plant, we will have two plants in Baddi in line with our stated objectives of geographical diversification. We remain steadfast on expanding as well as deepening our global footprints with special emphasize on regulated market. We have two products approved in Europe, eight filed, and over 30 in R&D, which we expect to commercialize over next 3-4 years. Our two facilities are EU GMP-certified, and few more are in pipeline. Our European CDMO project is progressing as per our stated plans with supplies commencing in FY '28. Our JV with the Zambia government is also progressing smoothly with commercialized supplies from from the Indian plant scheduled during Q4 FY '27, and considering the prolonged shipping
Sanjeev Jain (Akums Drugs and Pharmaceuticals Limited): under way with technical discussions already complete. The plant is expected to become operational in 2029, expanding our manufacturing presence outside India. Our domestic branded formulations segment had a steady quarter with 8% year-on-year growth in revenue and marked improvement in profitability on a sequential basis. We expect the segment to deliver growth on par with IPM by FY '28 as the current initiatives start bearing fruits. Our international branded formulations business saw growth accelerating growth on year-on-year and quarter-on-quarter basis. It is expected to maintain this momentum going forward in the year, and will be key engine to drive Akums growth. API segment continued on its journey towards becoming EBITDA breakeven as our endeavor continued. The trade generics segment remained EBITDA positive during the quarter, with the third straight quarter of achieving profitability. Sustainability is core to Akums in whatever we do. We are proud to announce that our company has an EcoVadis bronze medal. We are on our journey to be amongst the top global companies focused on environment, labor rights, ethics, and sustainability. We also won the Water Management Champion Award by CII for green practices. We also successfully transitioned to S/4HANA this quarter. This will provide real-time analytics across key business performance indicators. With a number of initiatives underway, we remain confident in our ability to create long-term shareholder value and delivering positive results. I shall now request our CFO, Mr. Sumit Sood, to take you through the detailed financial for the quarter. Over to you, Mr. Sumit.
Sumit Sood (Akums Drugs and Pharmaceuticals Limited): Thank you, sir. Thank you very much. Good afternoon, everyone. I'm pleased to present the financial highlights for the quarter 30th September 2026. Revenue on a consolidated basis stood at 1,342 crores, an increase of 31.9% year-on-year. Quarter 2 FY '26, it was 1,018 crores, an increase and an increase of 15.1% quarter-on-quarter. Q1 FY '27, it was 1,167 crores. EBITDA for the quarter stood at a healthy 195 crores, a multifold increase of 106% year-on-year. Q2 FY '26 was 94 crores, and an increase of 11.5% quarter-on-quarter. Q1 FY '27 was 175 crores. Margins were healthy at 14. 5% as against 9.3% in Q2 FY '26 and 15% in Q1 FY '27. EBITDA with other income stood at 224 crores, an increase of 76.3% year-on-year and an increase of 9.1% quarter-on-quarter. Profit after tax stood at 115 crores, an increase of 168.3% year-on-year. Q2 FY '26, it was 43 crores, and an increase of 13.5% quarter-on-quarter. Q1 FY '27, it stood at 101 crores. If we come to the segment-wise performance, if we look at the CDMO revenue, it stood at 100 1,115 crores, an increase of 38.6% year-on-year and an increase of 15.6% quarter-on-quarter. The revenue growth, as explained by Sandeep ji, was largely driven by healthy increase in volumes. EBITDA for the quarter for this business stood at 168 crores, an increase of 99.6% year-on-year. For the quarter 2 FY '26, it was at 84 crores, and an increase of 2.9% quarter-on-quarter. Q1 FY '27, it stood at 163 crores. Domestic branded formulations revenue stood at 132 crores, an increase of 8.2% year-on-year and an increase of 14.4% quarter-on-quarter. EBITDA for the quarter stood at 24 crores, a decline of 8.9% year-on-year. Q2 FY '26, it was 26 crores, and an increase of 103% quarter-on-quarter. Q1 FY '27, it was 12 crores. For the international branded formulation, revenue stood at 44 crores, an increase of 95.
Sumit Sood (Akums Drugs and Pharmaceuticals Limited): Year-on-year, quarter two FY '26 it stood at 22 crores and increase of 26.7%. Quarter-on-quarter Q1 FY '27 it it was 35 crores. EBITDA for the quarter was at 9.9 crores and increase of 80 80.5% year-on-year and an increase of 483 of 43.8% quarter-on-quarter. If you look at the API, the revenue stood at 29 crores, a decrease of 35.3% year-on-year. Q2 FY '26 it was 44 crores and a decline of 9.1% quarter-on-quarter, Q1 FY '27 it stood at 32 crores. EBITDA loss was slightly higher in this quarter, which is 5.7% while significantly lower than QY Q2 FY '26 14 crores, however higher than Q1 FY '27 at 3.9 crores. We continue to focus on higher gross margin products and expect the full-year losses to be lower than last year. If we come to the trade generic business, the revenue stood at 23 crores, a decrease of 5 4 5.4% and an increase of 10% quarter-on-quarter. EBITDA for the quarter stood at 1.2 crores. Our balance sheet continues to remain healthy and cash and cash equivalent as as has been constantly increasing, stands at 1680 crores. The company has free cash flow for H1 of 45.5 crores after account for business acquisition driven by healthy operating cash flow to EBITDA at a ratio of 69.2%. Based on the above, we conclude the financial highlights for the quarter. We would request the moderator to open the forum for question and answer session. Thank you.
Moderator: Thank you, sir. We will now begin with the question and answer session. Anyone who wishes to ask a question, may press star and then one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all the participants, you may press star and one to ask a question. We have the first question from the line of Saksham Tyagi from Desvelado Advisory. Please go ahead.
Saksham Tyagi (Desvelado Advisory): Hello, am I audible?
Moderator: Yes, you're audible.
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