Detailed Narrative
Robust Q2 & H1 FY26 Financial Performance
Acutaas Chemicals delivered strong financial results for Q2 and H1 FY26. Q2 revenue from operations grew 24.1% year-on-year to INR306.2 crores, while EBITDA nearly doubled to INR95.3 crores, with margins expanding by 1,130 basis points to 31.1%. For the first half, revenue increased by 21.3% to INR513.4 crores, and PAT more than doubled to INR115.9 crores, reflecting strong operational leverage and improved product mix.
Strategic Diversification into New Business Verticals
The company is actively diversifying its business beyond pharmaceuticals into battery chemicals and semiconductor chemicals. Production for battery chemicals is expected to commence in Q4 FY26, with capex progressing well. The new joint venture in Korea, Indichem, for semiconductor chemicals, had its groundbreaking ceremony last month and is projected to contribute to revenues from H2 FY27, marking a significant step in international expansion.
Margin Expansion Driven by Product Mix and Efficiency
Gross margin expanded by 1,232 basis points year-on-year to 55.8% in Q2 FY26, primarily due to an improved product mix and enhanced operational efficiencies. Management highlighted a strategic restructuring of the core pharma intermediate portfolio, churning out low-margin products and focusing on more sustainable, higher-margin offerings. Contributions from the newly commissioned solar power plant also aided margin improvement.
Capital Expenditure and Funding Strategy
Acutaas incurred INR141 crores in capex during H1 FY26, primarily directed towards the electrolyte additive project at Jaghadia and the pilot plant at Sachin. The total planned capex for FY26 remains at INR250 crores, with INR180 crores allocated for electrolyte additives and INR30 crores for the pilot plant. The company confirmed it has sufficient cash reserves, including INR240.6 crores in net cash and cash equivalents as of September 30, 2025, to comfortably fund these investments without external debt.
CDMO Business and Pharmaceutical Intermediates Growth
The Pharmaceutical Intermediates segment delivered a strong revenue growth of 27.1% year-on-year, reaching INR262.6 crores in Q2 FY26, largely driven by the CDMO business. The CDMO pipeline continues to expand, with validation batches for new products dispatched this quarter, expected to start contributing by the end of FY26, subject to regulatory approvals. Management emphasized the long-term, sustainable nature of their CDMO partnerships based on quality systems and compliance.
Improved Working Capital Management
The company demonstrated improved working capital management, reducing its working capital days to 100 in Q2 FY26, a 28-day improvement compared to Q1 FY26. Management expects to maintain working capital within the range of 95 to 105 days for the full financial year. This efficiency, combined with robust business performance, led to a strong generation of cash from operations of INR136.5 crores during H1 FY26.