Acutaas Chemicals Limited — Q4 FY26 earnings call

The chemical industry is navigating turbulent conditions due to the ongoing conflict in the Gulf region, which has disrupted supply chains for key feedstocks and driven raw material prices higher. Shipping schedules and vessel availability have also been affected. Acutaas is closely monitoring the situation and has acted swiftly with its procurement and operations teams, not anticipating any raw material shortages that would impact production continuity.

Acutaas is progressing towards becoming a diversified multi-vertical chemicals company. The company aims for battery chemicals and semiconductors to evolve into independent, self-sustaining growth engines by FY28, contributing meaningfully alongside the pharmaceutical intermediates business. This multi-vertical model is central to the vision of building a truly diversified chemicals company.

The Advanced Pharmaceutical Intermediates segment demonstrated robust performance, with revenue of INR 392.4 crores in Q4 FY26, reflecting a strong year-on-year growth of 43.9%. This growth was primarily driven by the CDMO business, complemented by steady contributions from the core API segment, which saw healthy sequential growth after portfolio reshuffling in the first nine months of FY26.

In battery chemicals, Acutaas has successfully commercialized its first two products and has a healthy pipeline, with two additional products expected to reach commercial scale in FY27. The semiconductor business, particularly BFC, is gaining traction with new products beyond Heraeus expected to contribute significantly to growth. The Indichem joint venture in South Korea has its R&D centre operational and is sending samples to prospective customers, aiming to reduce time to market.

The company is embarking on an ambitious expansion of its R&D centre, designed to be a world-class, internationally renowned facility with 10x capacity expansion. This new centre will feature dedicated sections for pharmaceuticals, battery chemicals, semiconductors, electronics, and cosmetics, fostering deep specialization and cross-disciplinary innovation. This investment is crucial for sustaining the innovation pipeline and fueling long-term growth.

For Q4 FY26, revenue from operations reached INR 432.8 crores, a 40.3% Y-o-Y growth. Gross profit was INR 268.3 crores, an 83.8% increase, with gross margin expanding by 1,467 basis points to 62%. EBITDA stood at INR 183.5 crores (more than twofold increase), with an EBITDA margin of 42.4%. PAT was INR 134.3 crores, up 114.1% Y-o-Y, with a PAT margin of 31%. For the full FY26, revenue was INR 1,339.4 crores (33% Y-o-Y growth), EBITDA was INR 480.4 crores (2x Y-o-Y), and PAT was INR 356.4 crores (more than doubled Y-o-Y).

Capex for FY26 totaled INR 195 crores, primarily directed towards the Jhagadia site for the battery chemical project, the pilot plant at Sachin, and maintenance. The first phase of electrolyte capex at Jhagadia is complete, with the second phase expected by Q1 FY27. The pilot plant completion is anticipated by Q2 FY27. Additionally, INR 190 crores was invested in the South Korea joint venture, Indichem Inc., during FY26, leading to a goodwill of INR 104 crores.

Acutaas is guiding for 25% revenue growth in FY27, maintaining a similar EBITDA margin level as FY26. This confidence stems from the product portfolio upgrade strategy, improving business mix, and contributions from new verticals like battery chemicals and CDMO. The company acknowledges its historical seasonality, with Q1 typically being the weakest quarter and Q4 the strongest, with H1 contributing around 40% and H2 around 60% of the top line.