Acutaas Chemicals Limited: Q2 FY26 Performance Highlights Robust Growth and Strategic Diversification

Acutaas Chemicals Limited, a prominent player in the Indian specialty chemicals sector, has reported a strong financial performance for the second quarter and first half of fiscal year 2026. The company's Q2 FY26 revenue from operations surged by 24.1% year-on-year, reaching INR 306.2 crore. This impressive top-line growth was accompanied by a significant expansion in profitability, with EBITDA nearly doubling to INR 95.3 crore, marking a 95% increase from the previous year. The EBITDA margin expanded by a remarkable 1,130 basis points to 31.1%. Profit After Tax (PAT) also saw a substantial rise of 91.3% year-on-year, totaling INR 71.9 crore, with PAT margins improving to 23.5%. For the first half of FY26, revenue grew by 21.3% to INR 513.4 crore, while EBITDA increased by 86.4% to INR 146.2 crore, and PAT more than doubled to INR 115.9 crore.

The robust performance was primarily driven by the Advanced Pharmaceutical Intermediates segment, which recorded a strong 27.1% year-on-year growth, contributing INR 262.6 crore to the quarterly revenue. The Specialty Chemicals business also demonstrated stable performance, growing by 7.3% year-on-year to INR 43.6 crore. Management attributed the significant margin expansion to an improved product mix, operational efficiencies, and strategic restructuring of their core pharma intermediate portfolio, focusing on more sustainable and higher-margin products. The commissioning of their solar power plant project also played a role in enhancing operational efficiency.

Financial Summary: Q2 FY26 vs. Q2 FY25 (INR Crore)

Strategic Initiatives and Future Outlook

Acutaas Chemicals is not just focusing on current performance but is also strategically investing in future growth drivers. The company is making significant strides in diversifying its business verticals beyond traditional pharmaceutical intermediates. The battery chemical business is progressing well, having secured multiple customers across diverse geographies, with production expected to commence in Q4 FY26. This segment is poised to become a key growth pillar. Similarly, the semiconductor chemicals segment is seeing increased engagement with new customers in Korea, Japan, and Taiwan, with new products in development. While initial revenue contributions will be small, this vertical is expected to become a meaningful growth driver in the medium term.

Another significant development is the new joint venture, Indichem, in South Korea. The groundbreaking ceremony took place last month, and capital expenditure activities are underway. This venture is anticipated to start contributing to revenues from H2 FY27, marking a major milestone in Acutaas's international expansion strategy. The company's CDMO (Contract Development and Manufacturing Organization) business continues to expand, with a healthy increase in customer enquiries and new molecule additions to its pipeline. Validation batches for new CDMO products have been dispatched, with contributions expected by the end of FY26, subject to regulatory approvals.

Capital Allocation and Management Commentary

For FY26, Acutaas has planned a total capital expenditure of approximately INR 250 crore. This includes around INR 180 crore for electrolyte additive capex at the Jaghadia site, which is progressing well and expected to be completed by Q4 FY26. Additionally, INR 30 crore is allocated for a pilot plant capex at the Sachin site, expected to be completed by Q3 FY26. The management emphasized its focus on building long-term sustainable businesses rather than chasing short-term opportunities. This disciplined approach, coupled with strengthening global partnerships and expanding into new growth verticals, underpins their confidence in achieving around 25% revenue growth for the full year FY26.

Working capital management has also shown improvement, with net cash and cash equivalents at INR 240.6 crore as of September 30, 2025. Working capital days improved to 100 days, a 28-day improvement from Q1 FY26, driven by better inventory and debtor days. The company expects working capital to remain between 95 to 105 days for the full year. This efficient management, combined with robust business performance, led to strong cash generation from operations of INR 136.5 crore in H1 FY26. Acutaas's strategic clarity, disciplined execution, and focus on high-growth, high-margin segments position it well for sustained growth and value creation in the coming years.