Acutaas Chemicals Limited

Acutaas Chemical reported robust financial results for Q3 FY26, with revenue from operations reaching INR393.2 crores, marking a 43% year-on-year growth. The company achieved its highest-ever margins, with gross profit at INR224 crores (76.1% YoY growth) and an EBITDA of INR150.7 crores, more than doubling year-on-year. Profit after tax (PAT) also crossed the INR100 crore milestone, reaching INR106.2 crores, a 133.7% increase from the previous year, with a PAT margin of 27%.

The company is evolving into a diversified chemicals entity with multiple business verticals. Beyond its core pharmaceutical intermediates, Acutaas is actively pursuing CMO and CDMO opportunities, with four products already validated and expected to contribute to the top line from FY27. New ventures in battery chemicals and semiconductor chemicals are progressing, with the battery chemicals block at Jhagadia inaugurated in January 2026 and the Indichem joint venture in South Korea showing encouraging traction.

The CDMO business is a significant growth driver, with the Advanced Pharmaceutical Intermediates segment delivering INR351.1 crores in Q3 FY26, a 47.0% YoY growth. Management expressed confidence in achieving INR1,000 crores in CDMO revenue by FY28, supported by a strong pipeline of validated products and ongoing sampling and validation batches for additional products. The company is strategically reviewing its non-CDMO product portfolio, letting go of low-margin products to focus on quality growth.

The new battery chemicals segment, with its Jhagadia facility inaugurated in January 2026, is expected to ramp up significantly from Q1 FY27. Two new products have been added to this business, with contribution expected from mid-FY27. In semiconductor chemicals, the Indichem joint venture is in early stages, seeding business in South Korea, Japan, and Taiwan, with encouraging client traction. The capex for the Indichem JV is progressing as planned, with INR130 crores already invested out of a total announced INR200 crores.

Capex for the nine-month period stood at INR143 crores, primarily for the battery chemical project at Jhagadia and the pilot plant at Sachin. The total capex for FY26 is now expected to be around INR220 crores, revised down from the earlier guidance of INR250 crores due to spill-overs. This includes INR170 crores for electrolyte capex and INR20 crores for the pilot plant. The company has also invested INR130 crores in the Indichem joint venture, bringing the total cash outflow for FY26 to approximately INR350 crores.

Based on strong performance and current order book, Acutaas has revised its revenue guidance for FY26 upwards from 25% to around 30% growth. The EBITDA margin guidance for the full year has also been upgraded from 28-30% to a range of 32-35%. Management reiterated its long-term growth outlook, expecting the company to grow more than 25% annually for the next three years, with all three new business verticals becoming independent self-sustaining growth engines by FY28.

The company's working capital for the quarter was 111 days, primarily influenced by higher debtor days, which stood at 100 days. Inventory days were 55 days, and payable days were 44 days. Management acknowledged the elevated working capital and stated ongoing efforts to reduce it, aiming for improved efficiency and cash flow generation, while noting that 110 days is considered a standard and comfortable level for their business.