Acutaas Chemicals Limited

Acutaas Chemicals reported robust Q2 FY26 results, with revenue growing 24.1% year-on-year to INR306.2 crores. This growth was primarily fueled by the Advanced Pharmaceutical Intermediates segment, which delivered INR262.6 crores in revenue, a 27.1% year-on-year increase. The CDMO business within this segment was identified as a significant contributor to this strong performance, alongside healthy contributions from the core Advanced Pharmaceutical Intermediates segment.

The company achieved substantial margin improvement in Q2 FY26, with gross margin expanding by 1,232 basis points year-on-year to 55.8%, and EBITDA margin increasing by 1,130 basis points year-on-year to 31.1%. This expansion was attributed to a favorable product mix, operational efficiencies, and the contribution from a newly commissioned 5-megawatt solar power project. Management expressed confidence in sustaining these higher margins (28-30% EBITDA for FY26) in the coming years due to a strategic shift towards more sustainable products.

Acutaas is actively developing new business verticals in battery and semiconductor chemicals. The electrolyte additive project at Jaghadia, with INR180 crores allocated from the FY26 capex, is expected to be completed by Q4 FY26 and begin revenue contribution in FY27. The Indichem joint venture in Korea, a 75% stake for Acutaas, had its groundbreaking ceremony last month and is projected to start commercial production in H2 FY27, marking a significant step in international expansion.

The company emphasized its long-term approach to the CDMO business, focusing on sustainable relationships and quality compliance. Acutaas highlighted its EcoVadis Platinum certification, placing it among the top 1% globally, as a key differentiator in securing CDMO contracts. Management noted that CDMO projects are progressing well, with validation batches for new products dispatched and commercialization expected by end of FY26, subject to regulatory approvals.

For FY26, Acutaas plans a total capex of INR250 crores, with INR210 crores dedicated to growth initiatives, primarily the electrolyte additive and pilot plant projects. The company maintains a healthy liquidity position with INR240.6 crores in net cash and cash equivalents as of September 30, 2025. Working capital days improved significantly to 100 days in Q2 FY26, a 28-day reduction from Q1, and is targeted to remain between 95-105 days for the full year.

Acutaas is strategically expanding its chemistry base beyond pharma into battery chemicals, semiconductors, cosmetics, and other specialty chemicals. Management assured that the company has adequate bandwidth to manage these diversified segments, through system digitalization, timely introduction of Key Managerial Personnel (KMPs), and strategic partnerships. The Korean JV partner, for instance, brings technical and commercial expertise, ensuring effective management of new ventures.