Acutaas Chemicals Limited Q3 FY26 Earnings Call Summary

Summary

Acutaas Chemicals Limited - Q3 FY26 Earnings Call Summary Wednesday, January 28, 2026 5:30 PM IST

Event Participants

Executives 3 Abhishek Patel (VP - Strategy), Bhavin Shah (CFO), Naresh Patel (Chairman and Managing Director)

Analysts 10 Abhijit Akela, Akshay, Bharat Shah, Chandra Rampuria, Jason Soans, Krishan Parwani, Pratik, Rikin Shah, Rohit Nagraj, Sajal Kapoor, Sudarshan Padmanabhan, Vignesh Iyer, Vivek Gautam

Financials & KPIs

Geographic & Segment Commentary

• Advanced Pharmaceutical Intermediates: This segment recorded ₹351.1 crores in revenue (+47% YoY), primarily propelled by the CDMO business. Management is strategically phasing out low-margin commodity products to focus on quality growth, with non-CDMO pharma growing at high single digits.
• Specialty Chemicals: Revenue reached ₹42.1 crores (+16.5% YoY) with an EBITDA margin of 12%. Performance was supported by a recovery in the Baba Fine Chem (BFC) business and steady volumes in commodity sub-segments.
• Battery Chemicals: A new dedicated block at the Jhagadia facility was inaugurated on January 19, 2026. Commercial operations for Vinylene Carbonate (VC) and Fluoroethylene Carbonate (FEC) are expected to ramp up in Q1 FY27.
• Semiconductor Chemicals: Business is in the seeding phase through BFC and the Indichem JV in South Korea. Management reported encouraging traction from Japanese and South Korean clients, with the South Korean plant expected to be completed by the end of CY2026.

Company-Specific & Strategic Commentary

• CDMO Portfolio Expansion: Four new products were validated in FY26, with revenue contributions expected to start in FY27. Management reiterated a CDMO-specific revenue target of ₹1,000 crores by FY28.
• Vertical Diversification: The company is transitioning into three independent growth engines: Pharma Intermediates, Battery Chemicals, and Semiconductor Chemicals, targeting full operational independence for each by FY28.
• Capex & Investments: Total FY26 capex is revised to ₹220 crores (from ₹250 crores) due to equipment delays. Investment in the Indichem (South Korea) JV reached ₹130 crores out of a planned ₹200 crores.
• Operational Efficiency: Realized significant energy savings through solar plant installations and internal process improvements, contributing to a reduction in overhead expenses.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Semiconductor Strategy

• Question: What is the status of the South Korea facility and BFC turnaround? (Rikin Shah)
• Answer: BFC has bottomed out and is seeing traction in new geographies. The Indichem capex started 4 months ago and should be completed by the end of CY2026. (Abhishek Patel)

Pharma Margin Sustainability

• Question: What led to the massive expansion in margins and is it sustainable? (Rikin Shah)
• Answer: The gross margin improvement of 1.2% is pure product mix; the rest is operational efficiency and asset utilization (40% at Ankleshwar). We have let go of low-margin products to ensure “quality growth.” (Abhishek Patel)

Battery Chemicals Commercialization

• Question: When will the new electrolyte additives contribute to the top line? (Krishan Parwani)
• Answer: Trial production is currently underway. Commercial supplies for VC and FEC are expected to start by the end of Q4 FY26, with meaningful scaling in Q1 FY27. (Abhishek Patel)

CDMO Pipeline

• Question: How many products are commercial in CDMO and what is the target? (Rohit Nagraj)
• Answer: There are currently 5 commercialized CDMO products. Four additional products were validated this year, providing a clear path to the ₹1,000 crore target by FY28. (Abhishek Patel)

Cash Outlay

• Question: What is the total cash outflow for FY26? (Krishan Parwani)
• Answer: Total outflow will be approximately ₹350 crores, comprising ₹220 crores in capex and ₹130 crores in JV investments. (Abhishek Patel)

Key Takeaway

Acutaas Chemicals delivered a landmark quarter, achieving its highest-ever EBITDA margins of 38.3% and crossing the ₹100 crore PAT threshold for the first time. The performance was characterized by a 43% YoY revenue jump to ₹393.2 crores, led by the CDMO segment and a strategic pivot away from low-margin commodity chemicals. The company is aggressively diversifying, having inaugurated its first battery chemicals block and progressed significantly on its South Korean semiconductor JV. Management demonstrated high confidence by upgrading full-year FY26 revenue growth guidance to 30% and EBITDA margin guidance to 32-35%. While product concentration in oncology remains a watch-point, the validation of four new CDMO products and the upcoming ramp-up of the Jhagadia battery facility in Q1 FY27 position the company to meet its ambitious FY28 targets. Moving forward, the successful integration of electronic-grade chemicals will be the primary catalyst for long-term value creation.