Akums Drugs and Pharmaceuticals (AKUMS) Q2 24/25 earnings summary

Executive summary

• Consolidated Q2 FY25 revenue reached INR 1,047 crore, up 2% sequentially but down 10% year-over-year due to lower demand, falling API prices, and absence of last year's one-off product development income.

• Board approved unaudited standalone and consolidated financial results for the quarter and half year ended 30 September 2024, following the company's IPO and listing on NSE and BSE on 6 August 2024.

• IPO comprised a fresh issue and offer for sale, raising net proceeds of 6,373.70 million after expenses.

• CDMO business remains the core, contributing 79% of revenue, with long-standing relationships with over 1,500 clients, including 26 of the top 20 Indian pharma companies.

• Export focus continues, with expansion into Europe, Africa, and the Middle East, and a new JV in Zambia to set up a manufacturing facility.

Financial highlights

• Q2 consolidated EBITDA was INR 135 crore, up 3% sequentially but down 28% year-over-year; adjusted EBITDA margin at 12.9% vs. 15.8% last year.

• Gross margin improved to 42.3% from 40.6% YoY; consolidated PAT rose to INR 67 crore from INR 57 crore in Q1.

• Consolidated revenue from operations for the quarter: 10,330.87 million; for six months: 20,522.00 million.

• Consolidated net profit for the quarter: 666.51 million; for six months: 1,278.59 million.

• Free cash flow post-investing activities was negative INR 65 crore for H1 FY25; net cash surplus at INR 341 crore, aided by IPO proceeds.

Outlook and guidance

• H2 FY25 demand trends expected to be similar to H1, with potential upside if API prices and industry volumes improve.

• European business expected to see commercial benefits in a couple of fiscals; Zambia JV to ramp up in 18–24 months.

• FY26 expected to benefit from normalized API prices and increased capacity utilization from new facilities.

• IPO proceeds allocated to debt repayment, working capital, acquisitions, and general corporate purposes, with significant funds still unutilized as of 30 September 2024.