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    Akums Drugs

    AKUMS
    Healthcare·18 May 2026
    Management Summary

    Akums Drugs reported a strong Q4 and full year FY26, with healthy revenue and EBITDA margin expansion driven by robust CDMO performance and the turnaround of trade generics. Strategic investments in capacity and R&D continue, alongside securing significant long-term contracts in Europe and Zambia. While the API business remains a drag, management expects reduced losses and a return to growth in international branded formulations.

    Highlights

    6

    • Full year revenue grew 5.8% to ₹4,359 crores, with Q4 revenue at ₹1,158 crores, up 9.7% YoY.

    • Adjusted EBITDA margin expanded to 12% for FY26 (from 11.2% in FY25) and 13.1% for Q4 FY26 (from 8.9% in Q4 FY25).

    • CDMO segment delivered healthy top-line growth of 8.6% for FY26 and 13.4% for Q4, driven by double-digit volume expansion.

    • Trade generics business turned EBITDA positive in Q4 FY26, reporting ₹1.4 crores.

    • Operating cash flow for FY26 was strong at ₹1,181 crores, significantly up from ₹465 crores in FY25.

    • New European GMP accreditation for Plant 2 and ANVISA approval for Plant 3 received, enhancing regulated market capabilities.

    Concerns

    3

    • API business continued to report losses of ₹40 crores for FY26 and ₹12 crores for Q4 FY26, despite a slight reduction from previous year.

    • Working capital days increased from 91 to 105 days due to inventory buildup.

    • International branded formulation business experienced muted growth for FY26, remaining flat at ₹143 crores.

    Key financials

    Metrics

    12

    Periods

    2

    Headline

    7
    • Revenue
      ₹4,359 Cr
      YoY+5.8%
    • Adjusted EBITDA
      ₹522 Cr
      YoY+13.3%
    • Adjusted EBITDA Margin
      12%
    • PBT
      ₹382 Cr
      YoY+11.9%
    • PAT
      ₹256 Cr
      YoY-25.5%

    Q4

    5
    • Revenue
      ₹1,158 Cr
      YoY+9.7%QoQ-0.1%
    • Adjusted EBITDA
      ₹152 Cr
      YoY+61.6%QoQ+3.3%
    • Adjusted EBITDA Margin
      13.1%
    • PBT
      ₹121 Cr
    • PAT
      ₹81 Cr

    Segment breakdown

    • CDMO₹3,485 Cr80.0%
    • Domestic Branded Formulations₹446 Cr10.2%
    • International Branded Formulations₹143 Cr3.3%
    • Trade Generics₹100 Cr2.3%
    • API Business₹184 Cr4.2%
    Donut· Share of Revenue (FY26)

    Order Book

    high confidence

    Total Value

    ₹ 3,160 crores

    as of 2026-03-31

    quantified

    Execution

    Zambian contract for FY27 and FY28; European contract for 6 years till 2032

    Composition

    Mix2 geographys
    • Zambia14.6%
    • Europe85.4%

    Share of order book by geography

    "The company has secured long-term CDMO contracts for Zambia and Europe, providing predictable revenue streams for several years."

    Source:
    Prepared remarks

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹300 crores

    Dividend

    ₹1/share (final)

    Payout ratio 18.0%

    Liquidity

    Cash ₹1,682 crores

    The company continues to maintain a strong liquidity position and cash and cash equivalents stood at INR1,682 crores and a healthy balance sheet of the company. We are well-positioned to enter new fiscal year with positivity and confidence.

    Guidance & targets

    7
    CategoryTargetPriority
    Capex
    FY27 Capex Target
    ₹300 crores
    		High
    Profitability
    API Business Losses
    sizably reduced
    		Medium
    Tax Rate
    Effective Tax Rate
    29%
    		Medium
    Revenue
    Zambia Contract Revenue
    $25 million
    		High
    Revenue
    European Contract Revenue
    EUR35 million
    		High
    Capacity
    New Injectables Facility Utilization
    significant ramp-up
    		Medium
    Market Share
    International CDMO Customers
    8-10 global customers
    		Medium

    What to watch in Q1 FY27

    5

    CDMO Volume Growth

    Q1, Q2 FY27
    CurrentDouble-digit volume expansion in H2 FY26
    TargetDouble-digit volume growth

    Why it matters

    Sustained volume growth in CDMO is a key driver for overall revenue and margin expansion.

    So what we said is in Q1, Q2, as we can see, we expect a double-digit volume growth, right?

    Risks & concerns

    6
    RiskSeverity

    Adverse operating environment in H1 FY26

    Characterized by sharp erosion in API prices and prolonged phase of low volume growth in the domestic market. — Management acknowledged

    medium

    Continued losses in API business

    Pricing pressure in cephalosporin persisted, leading to continued losses, though expected to curtail in FY27. — Management acknowledged

    medium

    Increased working capital days

    Working capital days increased from 91 to 105 days due to inventory buildup to ensure supply during wartime. — Management acknowledged

    low

    Muted growth in international branded formulation

    Tough year with muted growth due to market-specific disruption in focus geographies. — Management acknowledged

    low

    High valuations for branded players for M&A

    Current valuations in the market for branded players are significantly higher than what the company currently trades at, limiting inorganic growth opportunities. — Management acknowledged

    low

    Pricing volatility in GLP market

    Pricing in the GLP market remains very volatile and going down south, leading to a cautious approach for entry. — Management acknowledged

    low

    Q&A highlights

    8

    “So, as you rightly said, one is external, which is not really in our hands. But as a business model, it's a passthrough business model. So whatever is the cost of input material gets passed on as part of our CDMO contracts. And on top of it is our conversion and margins. ... Secondly, what is internal to us is how we can ramp up our unique differentiated dosage forms, our product offerings, our capabilities. This is which we are constantly focusing on. If you look at really last three years, we have been investing over INR100 crores in our R&D, which is a result of which we can at a larger base as well, we can gradually move up our gross margins.”

    Clarifies the company's ability to pass on input costs in CDMO and its strategy to improve gross margins through internal capabilities and R&D.

    asked by Sajal Kapoor

    2 min read6 chapters

    Detailed Narrative

    01

    Q4 and Full Year FY26 Performance Overview

    Akums Drugs reported a strong finish to FY26, with full year revenue reaching ₹4,359 crores, a 5.8% increase from FY25. Adjusted EBITDA for the year grew by 13.3% to ₹522 crores, expanding the margin to 12% from 11.2% in the previous year. Q4 FY26 saw revenue of ₹1,158 crores, up 9.7% year-on-year, and adjusted EBITDA of ₹152 crores, a significant 61.6% increase year-on-year, with margins at 13.1%.

    02

    CDMO Business Momentum and International Expansion

    The CDMO segment was a key growth driver, delivering an 8.6% revenue increase for FY26 to ₹3,485 crores, with Q4 showing 13.4% growth. This was supported by double-digit volume expansion and improved capacity utilization. The company achieved EU GMP accreditation for Plant 2 in January and ANVISA approval for Plant 3, bolstering its capabilities for regulated markets. Commercial supplies from Plant 2 to Europe are expected in FY28, and a strong pipeline of 10+ products is in development.

    03

    Strategic International Contracts

    Akums secured two significant long-term contracts: a European CDMO contract for EUR35 million annually for six years until 2032, and a Zambian contract for $25 million annually for FY27 and FY28. The Zambian contract is expected to add approximately ₹230 crores to the top line in Q2 and Q3 FY27. Management confirmed that the fixed-price European contract has factored in inflationary pressures, and they are confident of maintaining 'similar or high teens' margins.

    04

    Segmental Performance and Turnarounds

    Domestic branded formulations (Akumentis) saw modest revenue growth of 2.9% to ₹446 crores for FY26, but EBITDA improved by 17% to ₹90 crores due to an efficiency-focused strategy. The trade generics business turned EBITDA positive in Q4 FY26, reporting ₹1.4 crores, after a strategic decision to scale down operations and focus on profitable pockets. The API business, however, continued to report losses of ₹40 crores for FY26, though management expects these losses to be sizably reduced in FY27.

    05

    Investments in Capacity, R&D, and Digital Infrastructure

    The company continues to invest steadily in capacity expansion, R&D, and modernization. Capex for FY26 was ₹222 crores, with a target of ₹300 crores for FY27, focusing on expanding oral solid facilities and evaluating inorganic opportunities in niche businesses. The new injectable plant, Penem facility, and Baddi plant are progressing, with volumes expected to build in FY27/FY28. Digital transformation initiatives like SAP S/4HANA and Darwinbox are also being implemented to enhance efficiency and employee experience.

    06

    Capital Allocation and Shareholder Returns

    The Board recommended a final dividend of ₹1 per equity share and a special dividend of ₹2 per equity share for FY26, totaling ₹3 per share, representing an 18% payout. With strong operating cash flow of ₹1,181 crores and cash and cash equivalents of ₹1,682 crores, the company is well-positioned. Management emphasized that the primary usage of cash remains assessing organic and inorganic growth opportunities, while being disciplined about valuations for potential acquisitions.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.