Acutaas Chemicals Ltd (BOM:543349) (Q2 2027) Earnings Call Highlights: Revenue Surges 42. ...

Q & A Highlights

Q: With the CDMO revenue target of INR1,000 crore now expected a year ahead of schedule, what gives management confidence, and how does the path to INR2,000 crore by FY30 look? A: Abhishek Patel, VP of Strategy, said the INR1,000 crore CDMO target is now expected to be achieved in FY27, one year ahead of the original FY28 schedule, based on current orders from existing and new CDMO contracts. He added that 8-9 products are expected to enter the revenue stream over the next 1.5 years, and the company is confident of doubling CDMO revenue to INR2,000 crore by FY30, with the second INR1,000 crore expected to be more diversified across molecules and customers.

Q: What is driving the revised revenue growth guidance of around 30% and the higher EBITDA margin guidance of 38%-40% for FY27? A: Naresh Patel, Chairman and Managing Director, said the company revised its revenue growth guidance for the current year from 25% to around 30% and raised its EBITDA margin guidance to the 38%-40% range from FY27. Abhishek Patel added that the margin upgrade is supported by a favorable product mix, with a large portion of revenue coming from pharma intermediates and growth driven by the higher-margin CDMO segment, along with operating leverage as utilization at Unit 2 Ankleshwar (30% in Q2 FY27) and the specialty chemicals business scales up.

Q: How is the battery chemicals business progressing, and what is the outlook on realizations given recent price volatility? A: Abhishek Patel, VP of Strategy, said Q2 FY27 was the first quarter of commercial revenue from the battery chemicals business, with initial commercial shipments of the third product dispatched and pilot-scale validation batches of the fourth product sent to customers. On pricing, he said the company has long-term supply contracts with revised pricing linked to key raw material prices and exchange rate fluctuations, so it does not ride spot price spikes; realizations are expected to remain in the early double-digit dollar range rather than USD30-35 levels.

Q: What is the status of the South Korea semiconductor chemicals plant, and when should revenues ramp up? A: Naresh Patel, Chairman, said the South Korea plant was inaugurated ahead of schedule and will manufacture chemicals for photoresist, packaging, etching and other semiconductor applications. Multiple qualification batches have been submitted to customers in South Korea, showing strong customer traction. Abhishek Patel added that FY28 will be a year of ramp-up for initial products, with no large revenue or profitability commitment for the current financial year, and that the target market is the Korea, Japan and Taiwan semiconductor ecosystem rather than Indian customers for now.

Q: What is the CapEx plan for FY27 and beyond, including the new electronic-grade chemicals project? A: Abhishek Patel, VP of Strategy, said H1 FY27 CapEx was INR1,239 million and full-year FY27 CapEx is expected at around INR3,000 million. Additional planned CapEx of INR1,650 million includes around INR1,000 million for electronic-grade chemicals, INR450 million for the second phase of electrolyte additive CapEx, and the remainder for maintenance, excluding planned R&D CapEx and land acquisition. The electronic-grade chemicals plant will take about 1.5 years to complete, with production expected to start in H1 FY29, and the company expects at least 3x asset turnover from the project.

Q: What was the performance of the advanced pharmaceutical intermediates and specialty chemicals segments in Q2 FY27? A: Abhishek Patel, VP of Strategy, said the advanced pharmaceutical intermediates segment delivered revenue of INR4,020 million in Q2 FY27, up 53.1% year-on-year, with core business growing more than 25% year-on-year on new product ramp-up and strong growth in top products. The specialty chemicals segment revenue was INR349 million, down 20% year-on-year, due to phasing out of old commodity products and a temporary pause in BFC shipments after the US customer's ownership change; shipments have now resumed and the company is on target to deliver BFC growth this year.

Q: What are the key financial metrics for Q2 and H1 FY27? A: Bhavin Shah, CFO, said Q2 FY27 revenue from operations was INR4,369 million, up 42.7% year-on-year, with gross profit of INR2,715 million (up 59%) and gross margin of 62.1%, up 637 basis points. EBITDA was INR1,760 million, up 84.6% year-on-year, with margins at 40.3%, up 914 basis points, and PAT was INR1,231 million, up 71.4%, with PAT margins at 28.2%. For H1 FY27, revenue was INR7,666 million, up 49.3%, EBITDA was INR2,890 million, up 97.7% with margins at 37.7%, and PAT was INR1,981 million, up 71% with margins at 25.8%. Net cash and cash equivalents stood at around INR3,009 million as of September 30, 2026.

Q: What is the utilization level at the Ankleshwar unit, and will further CapEx be needed to reach the INR2,000 crore CDMO target? A: Abhishek Patel, VP of Strategy, said the company has invested INR330 crore in the Ankleshwar unit, with utilization at 30% in Q2 FY27, expected to reach around 40% by the end of FY27 and peak utilization by FY28. He said no further CapEx is required to reach the INR2,000 crore CDMO revenue target by FY30, though the company has already started planning for future expansion, beginning with land acquisition, with the size and scale of the next CapEx round to be decided later.

Q: How should investors think about the gross margin expansion to 62.1% was it driven by raw material softening or product mix? A: Abhishek Patel, VP of Strategy, said the gross margin expansion is a function of both product mix and raw material prices, and the company cannot bifurcate between the two. He clarified that raw material prices did not soften in the quarter, indicating the expansion was driven by a favorable product mix, particularly the higher contribution from the pharma intermediates business compared to the same period last

For the complete transcript of the earnings call, please refer to the full earnings call transcript .