Akums Drugs and Pharmaceuticals (AKUMS) Q2 25/26 earnings summary

Executive summary

• Entered a joint venture with the Zambian government for a manufacturing plant in Lusaka, with Akums holding 51% and a project cost of $45 million; production expected to start in CY 2028 and aims to serve multiple therapeutic areas, with a $24 million investment in the Zambian subsidiary to be made in tranches through March 2028.

• Secured a major European CDMO contract for oral liquid formulations, with commercial supplies to start in April 2027; first commercial supply of Dapagliflozin tablets dispatched to Switzerland, and Rivaroxaban supply to Europe expected in Q3.

• Revenue remained flat in H1 FY26, with margins dipping due to continued decline in API prices and muted IPM volumes, though CDMO volumes grew 7% year-over-year.

• Domestic formulations business is scaling up, while exports are expected to rebound in H2, and the Trade Generics segment is being scaled down.

• Net cash position exceeds INR 1,600 crore, supporting both organic and inorganic growth.

Financial highlights

• Q2 FY26 consolidated revenue was INR 1,018 crore, down 1.5% year-on-year; H1 FY26 revenue at INR 2,042 crore, down 0.5% year-on-year.

• Q2 FY26 adjusted EBITDA at INR 94 crore (margin 9.3%), down 22% year-on-year; H1 FY26 adjusted EBITDA at INR 223 crore (margin 10.9%), down 8.9% year-on-year.

• Q2 FY26 adjusted PAT at INR 43 crore (margin 4.1%), down 35.9% year-on-year; H1 FY26 adjusted PAT at INR 107 crore (margin 5.1%), down 13.4% year-on-year.

• CDMO revenue grew 0.7% year-on-year to INR 804 crore; domestic branded formulations up 5.3% to INR 122 crore; international branded formulations down 14.3% to INR 22 crore.

• Robust cash position with net cash over INR 1,600 crore and H1 free cash flow of INR 1,044 crore, including part consideration from the CDMO contract.

Outlook and guidance

• Exports expected to strengthen in H2 FY26, led by demand from multiple markets; international branded business anticipated to rebound in H2 due to seasonal demand.

• Zambia JV to contribute INR 200 crore in 2026 and European contract to add INR 300+ crore annual revenue from 2027; full ramp-up of Zambia facility expected to generate $40–50 million annually from 2029.

• Focus remains on improving margins through superior product mix and cost optimization.

• New facilities ramp-up is slower than planned but expected to contribute in 2026.

• Domestic business expected to grow in 2026, supported by regulatory enforcement and strong product pipeline.