Aakaar Medical Technologies: H2 FY26 Rebound After a Deliberate H1 Slowdown

Aakaar Medical Technologies Ltd. reported a sharp recovery in H2 FY26, after a weak first half that management described as intentional. The company said it tightened credit terms in H1 to improve cash discipline, and then saw demand return in H2 while keeping credit controls intact.

For H2 FY26, revenue was reported at 41.6 crore, up 64.4% over H1 FY26 and up 23.1% year-on-year versus H2 FY25. Operating EBITDA for H2 was 10.95 crore versus 0.02 crore in H1, and PAT turned to 7.4 crore versus a loss of 0.8 crore in H1.

For FY26, the investor presentation reported revenue from operations of 66.9 crore, EBITDA of 10.97 crore, and PAT of 6.6 crore. The company also highlighted 6,300 plus customers and cash and cash equivalents of about 16.2 crore at year end.

The operating narrative: working capital discipline, then a rebound

Management framed FY26 as a year of transition. The first half was marked by deliberate tightening of credit terms and front-loaded business development and conference related costs, which impacted profitability. The second half benefited from lower event expenses and operating leverage, and the company reported a sharp expansion in H2 EBITDA margin to 26.32%.

A key part of the narrative was receivables improvement. The presentation and call cited quarterly debtor days reducing from 209 days in June 2025 to 167 days by March 2026. Management also said it wants to drive this closer to around 110 days, though it acknowledged that the industry structure makes very low debtor days difficult in a B2B doctor channel.

Financial summary

Revenue mix: consumables heavy, and own brands gaining share

Aakaar positioned itself as a product-led, recurring annuity business. The presentation stated that aesthetic products account for 89% of its business and device consumables add another 4%, supporting recurring consumption.

Within products, the company disclosed an own-brand share of 37% in FY26, with own-brand product revenue of 24.57 crore. Imported and third-party product revenue was disclosed at 42.39 crore, or 63%.

The company also provided a segment view of revenue growth over the last three years, showing FY26 revenue of 20 crore for professional skincare, 18 crore for injectables and contouring, 11 crore for homecare for skin and hair, 11 crore for professional haircare, and 7 crore for devices and device consumables.

Aakaar’s top product concentration was highlighted through a top 10 products table. The largest product in FY26 was Inno Exfo Lightening at 13.04 crore, followed by TUBELITE GFC 360 Kit at 8.53 crore. Management also stated that the top 10 own products contributed 27% of revenue from operations in FY26, while top 10 imported products contributed 51%.

Strategy: distribution shift, new launches, and the Xelix platform

A central operating change discussed was the distribution model. The presentation stated that FY26 sales were 65% direct-to-doctor and 35% through stockists, and the company targets moving to 90% plus sales through stockists in FY26-27. On the call, management said this change is aimed at improving local control over collections and enabling under 24-hour delivery, while maintaining gross margin by reducing discounts to doctors.

The company also highlighted a cluster of new launches and partnerships. Management mentioned Letybo botulinum toxin, Saypha dermal fillers, VM Corporation exosome products, Xomage plant exosomes, and FotoFinder diagnostics. A key operational issue discussed was a regulatory delay. Management said DCGI licensing delays led to a three-month gap in botulinum toxin availability before Letybo was launched in April.

Another strategic theme was Xelix, described as a doctor-owned, doctor-operated aesthetics clinic platform backed by Aakaar’s distribution network. Management said 16 clinics were active and it aims to reach 50 clinics by year end, with internal expectations of around 3 to 4 lakh rupees per month of minimum business per clinic. Management also indicated the platform may generate additional revenue via commissions on services, though it stated that clearer reporting may come in subsequent periods.

What stands out after FY26

Aakaar’s FY26 story is largely about operational tightening followed by recovery. The H2 rebound is clear in the numbers, and the company reported improvements in gross margin and debtor days. At the same time, the balance sheet still reflects a working capital intensive structure, with FY26 trade receivables of 37.22 crore and inventories of 19.7 crore.

The company also clarified that cash and cash equivalents of about 16.3 crore largely include unutilized IPO proceeds kept in fixed deposits, implying investors should separate operating cash generation from IPO funded liquidity.

Going into FY27, management’s stated priorities include sustaining growth, protecting margins through portfolio mix, and improving collections through a distributor led model. The execution of the distribution transition, regulatory timelines for imported products, and the ability to reduce working capital intensity will be key variables to track.