Akums CDMO revenue rose 39% and Q2 EBITDA margin hit 15.1%

Akums Drugs and Pharmaceuticals Ltd reported CDMO revenue of Rs 1,115 crore in Q2 FY27, up 38.6% year on year, while CDMO EBITDA margin rose to 15.1% from 10.5%. Akums generated Rs 168 crore of CDMO EBITDA, as API revenue declined 35.3% to Rs 29 crore.

How did Akums’ segments perform in Q2 FY27?

Akums’ CDMO business was the largest disclosed segment in Q2 FY27, with revenue of Rs 1,115 crore, up Rs 311 crore from Rs 804 crore in Q2 FY26 and Rs 151 crore from Rs 964 crore in Q1 FY27. The 38.6% year-on-year and 15.6% quarter-on-quarter increase accounted for Rs 310 crore of the Rs 324 crore increase in total quarterly revenue to Rs 1,342 crore.

Domestic branded formulation revenue reached Rs 132 crore in Q2 FY27, up 8.2% from Rs 122 crore a year earlier and 14.4% from Rs 115 crore in Q1 FY27. International branded formulation revenue increased 95.2% year on year to Rs 44 crore from Rs 22 crore, and rose 26.7% sequentially from Rs 35 crore; Akums said this growth came from a weak base.

Trade generics revenue was Rs 23 crore in Q2 FY27, up 10.1% from Rs 21 crore in Q1 FY27 but down 5.4% from Rs 24 crore in Q2 FY26. API, or active pharmaceutical ingredient, revenue fell to Rs 29 crore from Rs 32 crore sequentially and Rs 44 crore a year earlier, representing declines of 9.1% and 35.3%; Akums said the reductions in API and trade generics were in line with expectations.

Why did Akums’ CDMO margin improve in Q2 FY27?

Akums’ CDMO EBITDA was Rs 168 crore in Q2 FY27, compared with Rs 84 crore in Q2 FY26 and Rs 163 crore in Q1 FY27. The CDMO EBITDA margin increased by 4.6 percentage points year on year to 15.1% from 10.5%, although it was below the 17.0% reported in Q1 FY27.

Akums’ company EBITDA margin rose to 14.5% in Q2 FY27 from 9.3% in Q2 FY26. Akums attributed the 5.2-percentage-point movement to a 1.1-percentage-point gross-margin improvement, a 1.9-percentage-point employee-expense benefit and a 2.2-percentage-point other-expense benefit, with the latter two reflecting operating leverage.

Domestic branded formulation EBITDA declined to Rs 24 crore in Q2 FY27 from Rs 26 crore a year earlier, despite revenue rising to Rs 132 crore, as its margin fell to 18.2% from 21.6%. International branded formulation EBITDA increased to Rs 10 crore from Rs 5 crore, while its margin moved to 22.6% from 24.5%; trade generics turned from a Rs 3 crore EBITDA loss to Rs 1.2 crore of EBITDA.

API remained loss-making at negative Rs 6 crore of EBITDA in Q2 FY27, compared with negative Rs 14 crore in Q2 FY26 and negative Rs 4 crore in Q1 FY27. The loss therefore narrowed year on year but widened sequentially while API revenue declined to Rs 29 crore.

What changed in Akums’ first-half segment performance?

Akums’ H1 FY27 revenue rose to Rs 2,509 crore from Rs 2,042 crore in H1 FY26, with CDMO contributing Rs 461 crore of the Rs 467 crore increase. CDMO revenue rose 28.5% to Rs 2,079 crore from Rs 1,618 crore, while API reduced the revenue bridge by Rs 29 crore and trade generics by Rs 4 crore.

CDMO EBITDA increased to Rs 332 crore in H1 FY27 from Rs 204 crore in H1 FY26, and its margin rose to 16.0% from 12.6%. Company EBITDA margin increased to 14.7% from 10.9%, which Akums attributed to a 1.3-percentage-point gross-margin improvement, a 0.9-percentage-point employee-expense benefit and a 1.6-percentage-point other-expense benefit.

Domestic branded formulation revenue grew 7.8% to Rs 247 crore in H1 FY27, but EBITDA declined to Rs 36 crore from Rs 42 crore as margin fell to 14.5% from 18.4%. International branded formulation revenue increased 36.2% to Rs 78 crore and EBITDA rose to Rs 17 crore from Rs 14 crore, although its margin declined to 21.4% from 23.5%.

Trade generics revenue fell 7.4% to Rs 44 crore from Rs 48 crore in H1 FY26, but the segment moved from negative EBITDA of Rs 8 crore to positive EBITDA of Rs 1 crore. API revenue declined 32.5% to Rs 60 crore from Rs 89 crore, while its EBITDA loss narrowed to Rs 10 crore from Rs 20 crore.

How did Akums’ working capital and cash flow change?

Akums reported net working-capital days of 98 in H1 FY27, compared with 91 in H1 FY26 and 105 for FY26. Debtor days fell to 63 from 67 in both comparison periods, creditor days increased to 82 from 76 in H1 FY26, and inventory days rose to 117 from 100.

Adjusted operating cash flow was Rs 256 crore in H1 FY27, compared with Rs 198 crore in H1 FY26 and Rs 227 crore in FY26. Adjusted operating cash flow as a proportion of EBITDA was 69.2%, below 88.7% in H1 FY26 and above 43.5% in FY26; Akums defines adjusted operating cash flow as operating cash flow excluding the Rs 954 crore advance received in FY26.

Akums annualised its half-year return ratios, reporting return on equity of 12.2% in H1 FY27 versus 6.8% in H1 FY26. Return on capital employed rose to 19.4% from 13.1%, while return on invested capital increased to 22.2% from 13.0%.

Conclusion

Akums’ segment data show that CDMO supplied most of the revenue increase and the largest disclosed EBITDA contribution in Q2 FY27 and H1 FY27. CDMO revenue rose 38.6% to Rs 1,115 crore in the quarter, while API revenue contracted and the branded formulation and trade-generics businesses produced differing revenue and margin outcomes.

The next results will clarify whether CDMO can sustain growth after its margin moved from 17.0% in Q1 FY27 to 15.1% in Q2 FY27. They will also show whether API can reduce its negative EBITDA below Rs 6 crore, whether trade generics remains EBITDA-positive after Rs 1.2 crore in Q2 FY27, and how inventory days progress after reaching 117 in H1 FY27.