Akums Drugs Q2 FY27 Earnings Call: Revenue Jumps 32% on Volume Growth, Baddi Plant Adds 6 Billion Tablets

Akums Drugs & Pharmaceuticals Ltd held its Q2 FY27 earnings call on November 02, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Volume-led quarter with sharp margin expansion

• Revenue of Rs.1,342 Cr, +31.9% YoY (vs Rs.1,018 Cr in Q2 FY 2025-2026) and +15.1% QoQ (vs Rs.1,167 Cr in Q1 FY 2026-2027), driven by double-digit volume growth.
• EBITDA of Rs.195 Cr, +106% YoY and +11.5% QoQ; margin at 14.5% vs 9.3% in Q2 FY 2025-2026 and 15.0% in Q1 FY 2026-2027. EBITDA including other income was Rs.224 Cr (+76.3% YoY).
• PAT of Rs.115 Cr, +168.3% YoY (vs Rs.43 Cr in Q2 FY 2025-2026) and +13.5% QoQ (vs Rs.101 Cr in Q1 FY 2026-2027).
• Cash and cash equivalents of Rs.1,680 Cr, which management noted are consistently rising; H1 FY 2026-2027 free cash flow was Rs.45.5 Cr after the business acquisition, with operating cash flow-to-EBITDA at 69.2%.
• Interest income is ~20% of PBT in H1 FY 2026-2027, earned on the European contract advance — a non-core earnings component that will be set off from FY 2027-2028 onwards as the advance is amortised over the contract period.

Volume growth above 20% for four straight quarters

• CDMO revenue of Rs.1,115 Cr, +38.6% YoY and +15.6% QoQ; segment EBITDA of Rs.168 Cr, +99.6% YoY, attributed largely to healthy volume increase per MD Sandeep Jain.
• Volume growth exceeded 20% YoY in each of the trailing four quarters (Q3 FY 2025-2026 through Q2 FY 2026-2026-2027), net of ~5-7% API price inflation, per management confirmation; growth spans existing and new customers across prescription-oriented, private-label and regional segments.
• ~10-11% share of the overall Indian market — management stated therapy mix is not a meaningful lens for a contract manufacturer, with the portfolio broadly mimicking the Indian market across therapies and dosage forms.
• Plant utilization above 50%, with ~60 days of order-cycle visibility and good penetration traction already visible in Q3 FY 2026-2027; management sees no reason volume growth in the IPM market will not continue.
• API prices up ~5-7% YoY (vs Q2 FY 2025-2026) and ~2-3% QoQ; management expects slight further upward movement in Q3 FY 2026-2027, with pricing beyond that (Q4 FY 2026-2027, January onwards) to be assessed subsequently — long-term API price trajectory remains uncertain.
• 2-3 DCGI approvals per month (~30 annually), often first or second in market, supporting first-to-launch positioning; R&D investment runs upward of 3% of CDMO revenues.

Zambia, Europe and Baddi capex on stated timelines

• Zambia $25 million order fully intact — following the mid-year presidential election (incumbent regime reelected), the government of Zambia has issued purchase orders; dispatch is planned in Q4 FY 2026-2027 with revenue booked on delivery in Q1 FY 2027-2028 (~100-120 days shipping from Haridwar to the Lusaka warehouse). Margins are slightly better than CDMO margins.
• A further $25 million round of supplies has been committed by the government of Zambia (period unspecified); discussions will follow the first delivery. The Zambia plant is expected to become operational in 2029.
• European CDMO project on plan — the dossier is filed and management believes approval could take 1-2 quarters (≈ Q4 FY 2026-2027 to Q1 FY 2027-2028); supplies commence in FY28. No revenue from the $100 million advance has been recognized in H1 FY 2026-2027 — it sits entirely on the balance sheet, with the advance to be set off proportionately over the contract period (illustratively 60 months) from FY 2027-2028 onwards.
• Baddi second plant in three phases — Phase 1 (oral solids) adds 6 billion tablets to existing ~50-51 billion annual capacity, operational within 3-4 months (≈ Q4 FY 2026-2027) and fully operationalized by Q1 FY28; a subsequent phase takes the facility to ~12 billion tablets. Management expects it to deliver at least 10-15% of the CDMO business in 3 years (~FY 2029-2030).
• Oriflame acquisition (~Rs.56 Cr) integrated in Q2 FY27, strengthening beauty and personal care; management expects 3x revenue at peak (period unspecified), with FY 2026-2027 a build-out year and meaningful contribution expected ~FY 2028-2029 — PAT contribution currently negligible.
• Regulated-market pipeline: 2 products approved in Europe, 8 filed, over 30 in R&D, with commercialization expected over the next 3-4 years; two facilities are EU GMP certified with a few more in the pipeline.

Branded verticals scaling; API and trade generics still healing

• Domestic branded (Akumentis) revenue of Rs.132 Cr, +8.2% YoY and +14.4% QoQ; segment EBITDA of Rs.24 Cr, down 8.9% YoY but +103% QoQ — the YoY dip reflects deliberate manpower investment: MR count expanded from 1,400 to 1,600 plus 450 first/second/third-line managers.
• Akumentis sustains 74-75% gross margins; PCPM stands at ~2.5, temporarily diluted by 200 new field-force members added in Q1 FY 2026-2027, with Gynae contributing ~40-45% of branded revenues through 3 mature divisions running at PCPM above 3.2. Management aims to lift overall PCPM above 3 (period unspecified) and is building the vertical with a 3-4 year vision, not optimizing quarter-to-quarter EBITDA (quarterly EBITDA has ranged ~Rs.10 Cr-Rs.24 Cr).
• International branded revenue of Rs.44 Cr, +95.2% YoY and +26.7% QoQ; segment EBITDA of Rs.9.9 Cr, +80.5% YoY — expected to maintain momentum through FY 2026-2027 and serve as a key growth engine. Per Head Strategy Sahil Maheshwari, both branded businesses carry a better EBITDA profile than the core manufacturing business.
• API revenue of Rs.29 Cr, -35.3% YoY (2.1% of revenue); EBITDA loss of Rs.5.7 Cr — wider than Q1 FY 2026-2027's Rs.3.9 Cr loss but narrower than Rs.14 Cr in Q2 FY 2025-2026. Management expects FY 2026-2027 full-year losses lower than FY 2025-2026 and break-even over the next 3-4 quarters (≈ by Q2-Q3 FY 2027-2028); 90-92% of API revenue currently comes from Indian markets.
• Trade generics revenue of Rs.23 Cr, -5.4% YoY, with segment EBITDA of Rs.1.2 Cr — EBITDA positive for the third straight quarter after the segment (once over Rs.400 Cr) was pruned as a stated FY25 objective due to working-capital intensity; the company is retaining lean, profitable pockets to preserve the option to scale.

Elevated capex year; R&D at ~3% of revenue

• H1 FY 2026-2027 capex of Rs.210 Cr, including ~Rs.43 Cr in the Baddi plant to operationalize the Oriflame acquisition, per CFO Sumit Sood; historical capex has run ~Rs.300 Cr annually, and FY 2026-2027 capex will be slightly higher than historical due to the acquired plant.
• Maintenance capex framework of ~5% of the Rs.2,400 Cr gross block (~Rs.100 Cr) flows into plants annually (period unspecified); management noted oral solids capex has typically delivered ~3x revenue turn on gross block.
• R&D expense at broadly 3% of revenues, roughly Rs.130 Cr annually (FY 2026-2027 run-rate), with 375 scientists plus ~100 support staff; management expects R&D expense to move up as the company progresses into regulated markets, and guides steady-state reinvestment of broadly 3-3.5% of CDMO revenue into quality pipeline assets (period unspecified).
• Funding approach per CFO Sumit Sood — the company will weigh debt versus liquidating investments, with debt preferred only if loans are available at a cost lower than the return on its investments.
• Digital and sustainability milestones — completed transition to S/4HANA in Q2 FY27 enabling real-time analytics; received an Ecovadis bronze medal and the Water Management Champion Award by CII.

No formal guidance; execution milestones carry the outlook

• Management offered no numeric growth guidance for the remainder of FY 2026-2027 or for FY 2027-2028, declining specific top-line guidance and stating the business remains healthy across all segments; CDMO top line is governed by volume and price.
• Domestic branded expected to deliver growth on par with IPM by FY28 as current initiatives bear fruit; management's endeavor is to maintain 8-10% growth with continued PCPM and profitability improvements (period unspecified). New product launches contribute almost half of growth (period unspecified) for the sub-Rs.500 Cr business ranked ~56th-57th in India.
• No large new contracts similar to the Zambia or European deals disclosed as of now — management stated the endeavor remains to grow the business but nothing further is currently disclosed.
• NPPA show cause notice (158 BC) covering FY19-FY25 — CFO Sumit Sood stated Akums does job work for a marketing company and the contract explicitly states "NPPA-related liabilities are not Akums'"; the notice was issued to both Akums and the marketing company, disclosure made per LODR requirements, with no financial liability and no provisioning made.
• Input-cost and availability volatility flagged — management flagged continued volatility in input material availability and prices as a headwind even as the CDMO demand outlook remains strong; API revenue share is not expected to rise dramatically in the near term.