Acutaas Chemicals Limited — Q2 FY26 earnings call

Call held 17 Oct 2025

Management summary

Acutaas Chemicals reported strong Q2 FY26 results with significant revenue and profit growth, primarily driven by its Advanced Pharmaceutical Intermediates segment and CDMO business. The company is on track to achieve its full-year revenue and margin guidance, while also making progress on new growth verticals like battery chemicals and semiconductor chemicals through strategic capex and joint ventures.

Highlights

  • Revenue grew 24.1% YoY to INR306.2 crores in Q2 FY26, driven by Advanced Pharmaceutical Intermediates.

  • EBITDA margin expanded 1,130 bps YoY to 31.1% in Q2 FY26, supported by product mix and operational efficiencies.

  • PAT grew 91.3% YoY to INR71.9 crores in Q2 FY26.

  • Working capital improved to 100 days, a 28-day improvement compared to Q1 FY26.

  • Electrolyte additive project and Indichem JV progressing with commercialization expected in H2 FY27 or Q4 FY26.

Concerns

  • Global geopolitical and economic landscape remains uncertain.

  • Semiconductor chemicals contribution is expected to take time to become meaningful.

  • Management was evasive on specific market size for electrolyte additives and future sales from the Korean JV.

Key financials

3 periods

Headline

  • Net Cash & Equivalents
    ₹240.6 Cr
  • Working Capital Days
    100 days

Q2 FY26

  • Revenue
    ₹306.2 Cr
    YoY +24.1%
  • Gross Profit
    ₹170.7 Cr
    YoY +59.3%
  • Gross Margin
    55.8%
  • EBITDA
    ₹95.3 Cr
    YoY +99%
  • EBITDA Margin
    31.1%
  • PAT
    ₹71.9 Cr
    YoY +91.3%
  • PAT Margin
    23.5%

H1 FY26

  • Revenue
    ₹513.4 Cr
    YoY +21.3%
  • EBITDA
    ₹146.2 Cr
    YoY +86.4%
  • PAT
    ₹115.9 Cr
    YoY +100%
  • Cash from Operations
    ₹136.5 Cr

What they filed

Q1 FY27: revenue up 56.3%, net profit up 68.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue244 271 304 206 305 +25%391 +44%422 +39%322 +56%
EBITDA48 67 84 51 97 +102%154 +130%181 +115%110 +116%
Net profit38 45 63 45 73 +92%112 +149%137 +117%76 +69%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Pharmaceutical Intermediates
    ₹262.6 Cr Revenue (Q2 FY26)27.1% YoY Growth (Q2 FY26)
  • SpecChem, Specialty Chemicals
    ₹43.6 Cr Revenue (Q2 FY26)7.3% YoY Growth (Q2 FY26)
  • Specialty Chemicals (Jaghadia)
    52% Capacity Utilization
  • CDMO Plant Block 3 (Unit 2)
    38% Capacity Utilization

Capital allocation

high confidence
  • Capex ₹250 Cr sufficient cash reserves to comfortably fund these investments
    • Maintenance capex ₹40 Cr
    • Growth capex - Electrolyte additive project ₹180 Cr
    • Growth capex - Pilot plant ₹30 Cr
    As shared in our previous call, the total capex for FY '26 is expected to be around INR250 crores, and we have sufficient cash reserves to comfortably fund these investments. ... out of INR250 crores capex plan for FY '26, INR40 crores we are expecting towards maintenance capex and rest is from the growth -- for the growth capex only. out of which around INR180 crores for the full year was planned for electrolyte additive capex and INR30 crores was planned for pilot plant capex.
  • M&A Indichem (Korea) Joint venture · Signed

    International expansion, technology, market access, production capability

    Generated goodwill of around INR16 crores for this quarter's investment. Acutaas is the investment partner with 75% stake, Korean partner with 25% bringing technology, market, and production capability.

    Our new joint venture in Korea, Indichem also marks a major milestone in our international expansion journey. The groundbreaking ceremony took place last month, and capex activities are now underway. This venture is expected to start contributing to revenues from H2 FY '27. ... goodwill of around INR16 crores has been generated for this quarter for investment we have done in Indichem. ... In South Korean JV, we are the investment partner with 75% investment and 25% is with our Korean partner who will bring their technology, their market as well as the production capability.
  • Liquidity Cash ₹240.6 Cr Net cash and cash equivalents as on 30th September 2025.
    Net cash and cash equivalents were at INR240.6 crores as on 30th September 2025.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 25%
    To conclude, our business continues to stand on a strong and resilient foundation, well positioned to deliver around 25% revenue growth for the year.

    — Naresh Patel

  • Spec Chem Business Growth Revenue · going forward · High confidence 10% to 15%
    So we are guiding that this traditional spec chem business will remain in the territory of around 10% to 15% as a growth for the business.

    — Abhishek Patel

Margin

  • EBITDA Margin Margin · FY26 · High confidence 28% to 30%
    To conclude, we are on track to achieve around 25% revenue growth with EBITDA margin expectation to be in the range of 28% to 30% in FY '26.

    — Abhishek Patel

Capex

  • Total Capex Capex · FY26 · High confidence INR250 crores
    As shared in our previous call, the total capex for FY '26 is expected to be around INR250 crores, and we have sufficient cash reserves to comfortably fund these investments.

    — Abhishek Patel

Working Capital

  • Working Capital Days Working Capital · Full year · High confidence 95 to 105 days
    For the full year, we believe working capital would be around anything between 95 to 105 days.

    — Bhavin Shah

Capacity

  • Electrolyte Additives Plant Capacity Utilization Capacity · around 3 years' time · Medium confidence optimum level
    No, no. It cannot go 100% in 1 year. It will take around 3 years' time to reach an optimum level of capacity.

    — Abhishek Patel

  • Ankleshwar Unit 2 Block 3 Capacity Utilization Capacity · next 2 years · Medium confidence optimum level
    But the capacity utilization will take its own time. And in next 2 years, it should reach to an optimum level.

    — Abhishek Patel

Asset Turn

  • Asset Turn Ratio Asset Turn · going forward · High confidence 2.5x
    In terms of asset turn, we see generally around 2.5x is the asset turn we expect generally from all our capex going forward.

    — Abhishek Patel

Market context

  • Project Payback Period Project Economics · any of the project · High confidence 3 to 3.5 years
    For this -- any of the project, we expect the payback to be around 3 to 3.5 year kind of payback.

    — Abhishek Patel

What to watch in Q3 FY26

Electrolyte Additive Project Completion & Contribution

Q4 FY26 / FY27
Current Progressing well, H1 FY26 capex INR141 crores towards it.
Target Completion by Q4 FY26, start contributing to revenue in FY27.

Why it matters

This is a key new growth driver, and its completion and revenue contribution are crucial for future growth.

the electrolyte additive capex at Jaghadia is progressing well and is expected to be completed by Q4 FY '26.

Risks & concerns

  • Global geopolitical and economic uncertainty

    medium

    The global geopolitical and economic landscape continues to remain uncertain, but the company focuses on long-term sustainable business.

    Management acknowledged

  • Volatile raw material prices and Chinese competition

    medium

    The industry has navigated volatile raw material prices and geopolitical uncertainties; company has implemented SOPs and product mix changes to mitigate, and products are robust enough to sustain current market prices and expected EBITDA margins.

    Both acknowledged

  • Product and client concentration

    low

    Management stated a belief in multiple products and customers for each product, and diversification across multiple products, customers, and industries in CDMO.

    Analyst downplayed

  • US Tariff Impact

    low

    Direct sales in the U.S. market are minimal (less than 1%), so no direct impact is foreseen from U.S. tariffs.

    Analyst downplayed

  • Not catering to emerging sodium battery technology

    low

    All current additives are for lithium-ion batteries, not sodium batteries.

    Analyst acknowledged

Q&A highlights

6 direct, 2 evasive
Sustainability of 28-30% EBITDA margin Direct
Yes, we feel so. That's the reason we first revised our margin guidance for FY '26 between 28% to 30%. And as I mentioned, this margin, again, is the function of the product mix. And we have slowly started redefining our product portfolio in such a way that we churn out some of the low-margin products and focus on something, which is more sustainable and with a sustainable revenue growth.

Management confirmed confidence in sustaining higher margins due to strategic product mix changes and a focus on sustainable growth.

Asked by Krishanchandra

Electrolyte additives and semiconductor JV contribution timeline Direct
First, electrolyte additives segment, we are we have now full visibility for all the capex plan, which is expected to get completed by Q4 FY '26. Once that plant gets commissioned... will immediately start contributing, maybe not much in the Q4 FY '26 but full year for the FY '27. ... for the second vertical, which is for the JV in South Korea, we are expecting this to get completed in next calendar year by -- and H2 FY '27 should be the time when it should start the commercial production.

Clear timelines were provided for commercialization and revenue contribution from key new growth drivers.

Asked by Krishanchandra

Drivers of gross margin expansion Direct
Yes, it's a function of both the overall product basket as well as the -- we have -- because it's our core competency to improve our margin through process improvement, through supply chain improvement as well as the operational efficiency. ... Apart from that, we have also improved our margins at an operational level by more than 2.5%, and that is because of operational efficiency and the contribution from our solar power plant project, which is now commissioned.

Management explained the multi-faceted approach to margin improvement, including product mix, operational efficiency, and solar power contribution.

Asked by Abhijit Akella

Higher trade receivables Direct
So see, when we say for export market, our receivable is always on a 90-day side and domestic is on 120 days. And we always said that it will be average 105 to 110 days. With improved collection and our effort, we are able to bring it to 87 days for this quarter.

Management clarified the reason for higher receivables and demonstrated improved collection efficiency, bringing down DSOs.

Asked by Nilesh G

CDMO business growth prospects and competitive advantage Direct
See, CDMO business, when we talk in CDMO business in pharma segment, is not a business which can come to anyone overnight. ... But that business is always a function of how you are complied with the quality system. ... we are one of the very good players to secure that business. And I would like to share one more insight that we now are EcoVadis Platinum certified company, which is only 1% of the companies over the world are into this territory.

Highlights the company's strategic advantages in the CDMO space, emphasizing quality, compliance, and certifications like EcoVadis Platinum.

Asked by Prayag Gandhi

Management bandwidth for multiple new business segments Direct
management has introduced a lot of system digitalizations, KMPs are introduced time to time required for each segment. So this is a part of the business cycle, and this is part of the business to grow from one state to another state. ... KMP is coming from so the my Korean partner is himself, they are all our good technical background, commercial background in that segment. So automatically, by partnership, we got the KMP in Baba as well as in Indichem.

Management addressed concerns about capacity to handle diversified growth by detailing internal initiatives and strategic partnerships for talent acquisition.

Asked by Mihir Damania

Electrolyte additives business margin expectations Evasive
No, no, electrolyte business definitely will not have such a high margins. ... That we cannot disclose.

Management declined to provide specific margin guidance for the electrolyte additives business, indicating either competitive sensitivity or uncertainty.

Asked by Ankit Mittal

Shareholder list access Evasive
See, I think, Ekta Srivastava has to be abide by all the rules and regulation. And she is, I think, working within the purview or the boundary of the legal framework only. So maybe it was because of those. ... whatever possible is there within the legal framework.

An analyst raised a direct complaint about the company secretary not providing the shareholder list, which management deflected by citing legal frameworks, potentially indicating a lack of transparency.

Asked by Vivek Gautam

2 min read 6 chapters

Detailed narrative

Strong Q2 FY26 Performance Driven by Pharma Intermediates

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.

Significant Margin Expansion and Sustainability

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.

Progress on New Growth Verticals: Battery and Semiconductor Chemicals

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.

Strategic CDMO Focus and Competitive Advantage

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.

Efficient Capital Allocation and Working Capital Management

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.

Diversified Business Strategy and Management Bandwidth

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.

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