Akums Drugs and Pharmaceuticals shatters records with 52% adj PAT growth – new facilities announced

Akums Drugs and Pharmaceuticals Limited, a leading name in the Indian pharmaceutical industry, has announced its unaudited financial results for the first quarter of FY25, showcasing significant growth and strategic advancements. As the largest India-focused Contract Development and Manufacturing Organization (CDMO), Akums has continued to strengthen its market position, particularly in the domestic market where it commands over 30% share.

Financial Highlights Reflecting Strong Growth

For Q1 FY25, Akums reported a robust 21.1% year-on-year (YoY) growth in adjusted EBITDA, increasing the margin to 12.7%. The adjusted Profit After Tax (PAT) saw an even more remarkable surge of 52.1% YoY, elevating the margin to 5.6%. The company’s consolidated revenue grew by 5.1% YoY to ₹1,019.1 crore, underpinned by strong performance in its core CDMO segment.

The CDMO division, which represents 77% of Akums’ total revenue and 93% of its adjusted EBITDA, grew to ₹782 crore, marking a 5.6% YoY increase. This growth was driven by a notable 13.9% rise in sales volume, alongside a 106 basis points improvement in EBITDA margins to 15.5%. This segment’s EBITDA grew by 13.4% YoY to ₹121.2 crore, reflecting efficient capacity utilization and an improved product mix.

Strategic Initiatives and Expansion Plans

Akums continues to invest in expanding its manufacturing capabilities. The company has commenced commercial production at its new injectable facility in Akums Healthcare Ltd., starting from August 22, 2024. This facility, with an annual capacity of 362 million units, is set to consolidate Akums’ leadership in the injectable CDMO space, further solidifying its market position.

Additionally, the Board of Directors has approved a significant investment of ₹265 crore to establish two new production facilities in Jammu. These facilities are intended to enhance Akums’ production capabilities across pharmaceutical and nutraceutical products, thereby supporting the company’s long-term growth strategy.

Challenges and Future Outlook

Despite the overall positive performance, Akums faces challenges in its Active Pharmaceutical Ingredients (API) segment, which, although showing a revenue improvement of 82.6%, continues to operate at a loss. The company is focused on achieving breakeven in this segment by improving operational efficiencies and optimizing the cost structure.

The company’s leadership has expressed confidence in sustaining this growth trajectory. Sanjeev Jain, Managing Director of Akums, highlighted the company’s ongoing efforts to optimize operations and leverage its strengths in the CDMO segment to deliver sustainable growth and value to stakeholders.

Market Response and Share Performance

The market has responded positively to Akums’ performance, although there has been some volatility in its stock prices. As of the latest trading sessions, Akums’ shares have shown fluctuations, reflecting both market conditions and investor sentiment following the quarterly results announcement​.

With these developments, Akums Drugs and Pharmaceuticals Limited is well-positioned to capitalize on its market leadership and continue its growth momentum in the highly competitive Indian pharmaceutical industry.