01 — At a Glance
The Quiet Pill-Maker Nobody Talks About (Until Earnings Season)
- 52-Week High / Low₹623 / ₹405
- Q3 FY26 Revenue₹1,160 Cr
- Q3 FY26 PAT₹68.5 Cr
- Latest EPS (Q3)₹4.21
- Annualised EPS (Q3×4)₹16.84
- Book Value₹200
- Price to Book2.35x
- FY25 Full Year EPS₹21.49
- Debt / Equity0.03x
- Cash Position₹1,573 Cr
Auditor’s Opening Note: Akums closed Q3 FY26 with ₹1,160 crore revenue (+14.8% YoY), ₹68.5 crore PAT, 22.8x P/E, and ZERO dividend. The stock sits at ₹470, having crashed -8% over 12 months despite profit growth of 2%. Management inherited ₹1,573 crore in cash and spent it on EU-GMP audits, Zambia deals, and making pills for Europe. They also got raided by Income Tax. Fun times.
02 — Introduction
The CDMO Playbook: Make Pills. Collect Cash. Repeat.
Akums Drugs is a contract development and manufacturing organization (CDMO). Translation: they don’t invent medicines. They make them. Big pharma companies throw the formula at them, slap their own branding on top, and Akums goes “₹X crore for 100 million tablets?” “Yes.” Deal done. Repeat 1,500 times. Profit.
Established in 2004, Akums is the market leader in India’s domestic CDMO sector with a 30.2% market share by value. That means if you’re a major Indian or multinational pharma company needing pills made, you statistically walk into an Akums facility. They operate 12 manufacturing units, make pills in 60+ dosage forms, and have 927 DCGI approvals. They also dabble in branded generics and APIs (Active Pharmaceutical Ingredients) — the latter being a spectacular loss-making hobby they’re trying to quit.
Q3 FY26 was the kind of quarter that makes investors squint at their screens. Revenue: ₹1,160 crore (+14.8% YoY). EBITDA: ₹147 crore (+21% YoY). But also: IT raids, labour code penalties, a CFO exit, and management’s cheerful announcement that they’re now “making pills for Europe starting FY28.” The stock dropped anyway.
The real story? Akums is executing on a strategy nobody asked them to execute on. They’re expanding to Europe. They’re investing in Zambia. They’re trying to fix their loss-making API business. They’re also holding ₹1,573 crore in cash like a nervous parent at a child’s first exam — knowing they need to do something, unsure what exactly will happen next.
Concall Note (Feb 2026): “We see double-digit volume growth in Q4 as well.” — Management, confidently. Translation: they’ve already counted the pills. Or they’re hoping very hard.
03 — Business Model: WTF Do They Even Do?
Pills. Capsules. Vials. Hopes and Dreams.
Akums runs three main business verticals, each with increasingly depressing margins:
CDMO (78.2% of revenue): The crown jewel. Pharma companies give Akums a formula and manufacturing spec. Akums buys raw materials, processes them through 12 plants, packs them into boxes, and ships them out. Revenue: ₹916 crore in Q3 (+16.3% YoY). EBITDA: ₹126 crore. Margin: 13-14%. It’s stable, it’s predictable, and it smells vaguely like success. In Q3, volumes grew double-digits “across client base, across therapy areas, across channels.” Translation: it wasn’t one big customer. It was real demand.
Branded and Generic Formulations (16.8% of revenue): Akums’ own brands, sold domestically. Revenue: ₹115 crore in Q3 (+4.2% YoY). EBITDA: ₹25 crore. Management explicitly said: “top-line growth was not a key driver for us.” Translation: they killed growth to protect margins. They cut headquarters. They fired unprofitable debtors. In 2026, expect “at par with industry growth” — which in pharma means 5-7%. Riveting stuff.
APIs (5% of revenue): The financial anchor tied to Akums’ ankle. Revenue: ₹54 crore in Q3 (+35.4% YoY). EBITDA: -₹7 crore (NEGATIVE). The entire business loses money because cephalosporin prices have collapsed 30%+. Management is now “focusing more on other products apart from cephalosporins.” Translation: they’re desperately praying international regulatory approvals materialise so they can sell at better prices. Until then, API is a ₹54 crore revenue business losing money quarter after quarter. Yay.
International Branded Formulations: Recovering nicely. Revenue: ₹50 crore in Q3 (+18% YoY). EBITDA: ₹12.9 crore. Margin jumped from 25% to 35%+. Management said “markets have performed well… recovery looks stable.” So after years of disruption, they’re finally exiting the pain zone.
CDMO Share78.2%The Money Maker
Branded & Gen16.8%Stable Shrink
API Share5%The Black Hole
Customer Base1,500+Make 38 of Top 50
Capacity Reality Check: They have 49.6 billion unit annual capacity across 12 plants. Utilization is ~47% overall. But practical peak is 55-60% because they make 20,000+ SKUs annually with extensive changeovers and cleaning. Hence: they’re already “at a mature stage” in terms of incremental margin upside. More volume might come, but margin expansion will be surgical.
💬 Here’s a fun question: If you’re a pharma CEO and you need 100 million tablets made, do you worry Akums will reject you? Or does Akums worry you’ll go to Gulf Oil? What’s the real power dynamic?
04 — Financials Overview
Q3 FY26: The Quarterly Numbers
