Accretion Pharmaceuticals: A Deep Dive into H1 FY26 Performance and Future Outlook

Accretion Pharmaceuticals Limited, an emerging player in India's dynamic pharmaceutical landscape, recently held its maiden earnings conference call following its successful listing on the NSE Emerge platform in May 2025. The company, specializing in high-quality generic and branded formulations, showcased a robust performance for the first half of fiscal year 2026, signaling a strong growth trajectory driven by strategic investments and an expanding global footprint.

For H1 FY26, Accretion Pharmaceuticals reported a total income from operations of INR 43.74 crore, marking an impressive 135.59% year-on-year growth. This significant revenue surge was primarily fueled by the strategic deployment of IPO-funded capital expenditure, which enhanced manufacturing capabilities, alongside a richer mix of value-added CDMO (Contract Development and Manufacturing Organization) and private-label formulations. The company's EBITDA, excluding other income, stood at INR 7.07 crore, reflecting a 62.94% YoY increase, though the EBITDA margin saw a temporary dip to 16.17%. Profit After Tax (PAT) also demonstrated strong growth, rising 92.81% YoY to INR 4.75 crore, with a PAT margin of 10.87%. This performance underscores the company's ability to leverage new capacities and a higher-margin product mix, despite increased operational expenses during its scaling phase.

Segmental Performance and Strategic Product Mix

Accretion Pharmaceuticals' diverse product portfolio played a crucial role in its H1 FY26 performance. The company offers a wide array of dosage forms, including tablets, capsules, oral liquids, oral powders, and external preparations, catering to over 20 therapeutic segments such as anti-malarial, anti-fungal, anti-inflammatory, antibiotics, anti-diabetic, and vitamins and supplements. This broad product mix allows the company to cater to varied customer demands and maintain a competitive edge.

The revenue breakdown by product for H1 FY26 highlights the contribution of each segment:

This distribution indicates a balanced portfolio, with tablets being the largest contributor, followed by oral liquids and external preparations. The company's strategy to focus on a broader product mix, rather than specializing in just one or two therapeutic areas, allows it to attract a wider customer base in both domestic and export markets.

Operational Excellence and Global Expansion

Accretion Pharmaceuticals has made significant strides in enhancing its operational capabilities and expanding its global footprint. The IPO proceeds of INR 29.75 crore were strategically utilized for upgrading manufacturing facilities, acquiring new equipment, reducing debt, and strengthening working capital. These investments have resulted in a 40% increase in production capacity, improved productivity, and an enhanced ability to handle a more complex and value-added product mix.

The company's commitment to quality is evident through its numerous certifications, including WHO-cGMP, GLP, Cambodia GMP, Rwanda GMP, Nigeria GMP, Malawi GMP, ISO 9001:2015, ISO 14001:2015, and ISO 22000:2018. The recent cGMP approval from Malawi is a testament to its unwavering commitment to global standards and opens direct export opportunities to key African markets, further diversifying its market presence.

Accretion's international presence spans over 30 countries across Africa, Southeast Asia, and Latin America. The company is actively pursuing product registrations in high-potential markets like the Philippines, Ghana, Sierra Leone, and Cameroon, with over 100 products currently under various stages of registration. This focus on direct market engagement, moving away from sole reliance on merchant exporters, is a strategic move to deepen relationships and capture higher margins.

Management Commentary and Future Outlook

Management expressed confidence in sustaining the growth momentum, projecting a revenue of INR 115-120 crore for the full fiscal year 2026. While acknowledging the temporary dip in EBITDA margins due to scaling-up expenses and a focus on volume, the company aims to stabilize margins back to 20-22% in the future by optimizing its product mix and leveraging new registrations. The long lead times for country and product registrations (1-2 years) were noted as a factor influencing current expenses, but these are seen as investments for future profitability.

The company's working capital cycle, currently around 190 days, is being managed, with domestic sales having a shorter cycle compared to exports due to shipment and payment timelines. Accretion Pharmaceuticals emphasizes its B2B CDMO model, where it manufactures for distributors and marketers, allowing it to cater to diverse demands without needing its own extensive sales force in every region. This model, coupled with a strong order book and continuous product development, positions the company for sustained growth.

In conclusion, Accretion Pharmaceuticals Limited is navigating its post-IPO phase with strategic clarity and disciplined execution. The robust H1 FY26 performance, driven by capacity expansion, a diversified product portfolio, and an aggressive global outreach, reflects the company's commitment to becoming a trusted and innovative CDMO partner. With a clear roadmap for geographical diversification, new product development, and manufacturing excellence, Accretion Pharmaceuticals is poised for long-term value creation for all its stakeholders, contributing significantly to India's reputation as the 'Pharmacy of the World'.