Thank you, Michelle. Good day, everyone.

On behalf of Ambit Capital, I would like to welcome you all to the Q3 FY '26 earnings call for Akums Drugs and Pharmaceuticals Limited. I now hand over the call to Mr.

Ankit Jain to introduce the Akums management. Thank you, and over to you, Ankit.

Thank you, Gaurav, for the introduction. Good afternoon, everyone.

Welcome to Akums Q3 and nine months FY '26 earnings call. I am Ankit Jain, and I head investor relations at Akums Drugs and Pharmaceuticals Limited.

On today's call, we are joined by Mr. Sandeep Jain, Managing Director; Mr.

Sandeep Jain, Managing Director; Mr. Sumeet Sood, Chief Financial Officer; and Mr.

Sahil Maheshwari, who is the head of our strategy. I will commence with our standard disclaimer that any discussion on today's call might include certain forward-looking statements, which are predictions or projections of future events.

Our business faces several risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied in such statements. At Akums, we do not undertake any obligation to publicly update any forward-looking statements, whether as a result of new confirmation, future events, or otherwise.

Having said that, I hope you would have had the opportunity to review our investor presentation and financial results that we posted on Friday evening. I would now like to hand over to our Managing Director, Mr.

Sandeep Jain, to discuss our performance. Thank you.

Namaskar sabko. Thank you, Mr.

Ankit, and once again appreciate everyone for taking time out to join us for our Q3 and nine months FY '26 earning call. Q3 FY '26 was a strong quarter for Akums.

Our healthy operating performance was characterized by strong execution across multiple key segments. CDMO registered a healthy top-line growth of more than 16%, driven by strong volumes.

The international branded formulation business saw significant improvement led by demand recovery across key markets. Domestic branded formulation continued its steady trajectory, aided by portfolio expansion, improved field coverage, and sustained momentum in core therapy areas.

The quarter also saw benefit of operating leverage playing out in the CDMO business, with improved capacity utilization as well as steady ramp-up of newer facility. While API pricing stayed under pressure, stabilizing in select molecules, and disciplined cost management has helped mitigate impact on the CDMO margins.

We continue to work towards reducing losses in the trade generic and API segment by way of portfolio rationalization and tighter control over overheads. Our European CDMO project is progressing as per our stated plan.

We successfully advanced on the regulatory and execution milestones. Following the receipt of EU GMP accreditation for our oral liquids facility, plant number two, and are on track to start supplies in FY '28.

Our oral solids facility, plant one, also received renewal of EU GMP certification, showcasing our continued commitment towards global quality manufacturing. Supply of finished oral formulation from plant one to Europe has already been commenced this fiscal.

The Zambia project also remains on track with commercial supplies from the Indian plants expected in H1 of FY '27. These developments further showcase our progress towards establishing Akums as a global pharmaceutical company.

During Q3 FY '26, the API business remained under pressure with pricing softness persistent across key molecules. However, the pace of decline moderated, and ongoing portfolio rationalization and cost optimization initiatives helped contain losses and improve sequential performance.

Building a future-ready organization through automation is key focus for us. We have recently initiated our SAP S/4HANA transformation, which will enable improved efficiency, automation, and real-time analytics across multiple functions within the organization.

Similarly, we have implemented Darwinbox to improve our employee experience and automate the HR functions. These initiatives across various functions throughout this group will enable us to prepare for the future.

While we continue to operate in a volatile business environment marked by disruptions, we as Akums remain focused on our long-term growth drivers that include innovation, operational efficiency, cost control, and strategic partnerships. We reiterate our commitment to creating long-term value for our shareholders.

Thank you for your continued trust and support. I shall now request our CFO, Mr.

Sumeet Sood, to continue the discussion with the financials. Mr.

Sumeet Sood.

Thank you, Sandeep sir. Good afternoon, everyone.

I will take you through the financial highlights for the quarter ended 31st December, 2025. Our operating revenue stood at 1,160 crore, an increase of 14.8% year-on-year.

The Q3 FY '25 revenue stood at 1,010 crore, and increasing 14% quarter-on-quarter, which was 1,018 crores. The total operating EBITDA for the quarter was healthy at 147 crores, an increase of 21% year-on-year, and increasing 55.4% quarter-on-quarter.

Margins were at 12.7%, improving 65 basis points year-on-year, and increasing 338 basis points quarter-on-quarter, driven by improved profitability across segments. EBITDA with other income stood at 181 crores, increasing significantly by 33% year-on-year.

Q3 FY '25 was Rs. 136 crore, and increasing 42.8% quarter-on-quarter.

Q2 FY '26 was 127 crores. EBITDA margins were at 15.2%, increasing 191 basis points year-on-year, and increasing 309 basis points quarter-on-quarter.

Profit after tax stood at 68 crore, an increase of 2.1%, as in Q3 FY '25 it was 66 crores, and increased 58.5% quarter-on-quarter. Q2 FY '26 was 43 crores.

As you're all aware, there was a labor code impact which came into the financials. A one-time impact of 18.2 crore has been included as an exceptional item for the past period, and for the current period, nine months, it is 2.27 crores.

If we look at the five segments that we break down our financials in, the CDMO, the branded formulation, exports, trade generic, and API. If we look at the CDMO business, the revenue stood at 916 crores, an increase of 16.3% year-on-year.

It stood at 787 crores for the quarter FY '25, and an increase of 13.8% quarter-on-quarter. During Q2 FY '26, it was 804 crores.

Revenue growth was driven by double-digit volume growth. However, decline in API prices continued in this quarter as well.

On a quarter-on-quarter basis, APIs prices seem to be stabilizing. EBITDA for the quarter was 126 for the CDMO business, an increase of 3.7% year-on-year, and an increase of 49.2% quarter-on-quarter.

It stood at 84 crores in the Q2 FY '26. If we go to the domestic branded formulation business, the revenue stood at 115 crores, an increase of 4.2% year-on-year, and a decrease of 5.8% quarter-on-quarter.

EBITDA for the quarter stood at 25 crore, an increase of 25.1% year-on-year, and a decrease of 3.5% quarter-on-quarter. International branded formulation revenue stood at 50 crores, an increase of 18% year-on-year, and an increase of 120% quarter-on-quarter.

EBITDA for the quarter stood at 12.9 crores, an increase of 65.9% year-on-year, and an increase of 135% quarter-on-quarter. For the API business, revenue stood at 54 crores, an increase of 35.4% year-on-year, and an increase of 22% quarter-on-quarter.

EBITDA for the quarter was negative 7 crores, as cepha prices continue to trend lower. However, the losses were also curtailed to 11 crores for the period Q3 of FY '25, as well as for Q2 FY '26 were 14 crores.

The losses have been brought down due to continued efforts toward cost reduction and portfolio rationalization. Trade generic revenue stood at 25 crore, a decrease of 18% year-on-year, and an increase of 1.7% quarter-on-quarter.

The EBITDA for the quarter was -3%, similar to the Q2 FY '26 quarter, and significantly lower than Q3 FY '25, which stood at 8 crores. We continue to have a very strong cash surplus of 1,573 crores.

The cash flow from operations stood at 1,109.5 crores, and the free cash flow for the group was 944.5 crore. This, from our side, conclude the financial highlights for the quarter.

I would request the moderator to open the forum for question and answer session. Thank you.

Hi. Thanks, sir.

Thank you for the opportunity. My first question is pertaining to your CDMO growth, especially on the volumes front this quarter.

Could you help us understand this a little better?

Abdul, you are trying to ask where the volume growth has come from? Hi, this is Sahil.

Yes. Yes, sir.

Abdul, this was broad-based, right? Existing customers, whether through existing brands, new brands, existing channels, across therapies.

While we tried to dig deeper, but this kind of volume growth, Abdul, has to come from a base itself, right? We also could see that this came at a similar gross margin profile.

Roughly 37%-plus was the gross margin profile for the CDMO business, which is also better than 36.6%, which was for last Q3, right? A healthy volume growth driven by improved gross margins compared to last Q3, this was a broad-based recovery, I think, for the overall market only.

Just trying to just understand this a little better. That your CDMO does not include any revenues from your milestone income, or any licensing fee, or anything like that?

There's no one-off in this numbers?

No, Abdul, since we have not started the exports business for the European contract as of now, this is all manufacturing income.

Got it. Got it.

Just one more on the domestic branded generics. This particular segment has been growing at the single-digit kind of a growth rate, but the margins have improved.

Just wanted to understand how are we trying to work on this? Is margin a better focus here rather than top-line growth?

Abdul, this is in line with what our overall strategy for the fiscal had been, right? Top-line growth was not a key driver for us.

It was how do we improve our profitability in this business, right? A better control over overheads, rationalization of the debtors or inventory, where we could potentially lose money, all of those things have played out well for us this time.

Hence, while we still make a loss in this segment, the loss is not as stark as it used to be last Q3.

Got it. Sahil, just on the EU supplies, when you're talking about oral solid formulations, how big is this opportunity?

Is this also a part of your CDMO business only when you're recording revenues here?

I'll go top-down. Yes, since we are manufacturing a brand owned by someone else, it will be classified under CDMO, right?

Then secondly, how big is the opportunity? As the discussions with the customer, this will largely be a 35 million euro annually for us.

As was stated in the initial commentary, we have already received our approval for our plant two, from which we'll be supplying this to the Europe. Now the process of filing and registering the product across multiple European countries will begin.

Subsequently, in the next financial year, we should start the commercial supplies.

Okay. Okay.

Sir, just last one on the cash part. Sitting on cash for some time, any thoughts around that?

How are you going to deploy that?

Abdul, rightly, we are actively evaluating multiple things which will complement our existing business. Right, there are a few discussions, but nothing as of now is binding in nature.

While we are evaluating, the idea is to remain cognizant of what we are buying, at what price we are buying, and whether or not it will be incremental to our current business. That remains a key filter.

Okay. Thank you, Sahil, and thanks, team.

Yeah. Thanks for the opportunity.

Just trying to understand the CDMO volumes a bit better. Is it a kind of a one-off kind of situation, or how sustainable actually, if you can help us understand the current performance as far as the volume growth is concerned, can it sustain the next few quarters, few years as well?

Thank you.

Sure. I'll probably address in two parts, Vivek.

Thanks for the question. The CDMO is a make-to-order, right?

We cannot stock, destock quarterly, right? It's a make-to-order, it's market-driven.

Secondly, on sustenance, since we are already have a visibility of Q4, in Q4 as well we see a double-digit volume growth. This as of now looks sustainable in the near term at least.

What had suddenly changed, right? In the last, I think, three, four quarters, maybe I think more than that, we are consistently seeing issues in the volume part, and not just at the company level, but at the industry--

Sorry. Just trying again.

If you look at last one to two years, right, the volumes across the industry as well as for the company, right, growth was under problem, some challenges were also there. What has changed in this particular quarter, if you can highlight?

While I won't be able to comment on what the recorded data looks like, right, they largely cover branded, there's a portion of the market which is not covered, but what we manufacture is ultimately getting stocked up and then the results show up in that market analysis, right? What has changed, I think there are two things which we can think through have a positive impact on us.

First and foremost is there might be some play of enforced regulations being stricter, right? That is one.

The second is also the play across generic side, right? That is also a channel which is growing, and it is growing well for us, right?

That is there, but having said that, the branded business also saw good volume growth. It's an overall volume growth across all therapeutic areas, largely all channels of distribution.

Understood. If you look at the margins, right, although you have seen sequential improvement in the CDMO business, but it is still below YoY, right, close to around 170, 180 basis points.

How do you see the margin trajectory going forward maybe next three, four quarters? Thank you.

If you look at it, Vivek, the gross margins, we've been able to have a good gross margin profile. We were largely at 36-odd percent, we have moved 37.3%, 4%, 5%, so that has been the track rate, right?

The below expenses, we, as Sumeet ji mentioned, there was one-off 2-odd crore in the employee expenses, but beyond that as well, we continue to invest in technological upgrades, which was also mentioned in initial commentary, and also continue to invest in our R&D, which boils down to our margin profile, right? Having said that, as of now, these current level of margins are once which looks predictable in the near term, while the aspiration is how we can further enhance these margin profiles, but at least looking at this, this is what we think would be a right margin profile for this segment.

Understood. One question on API business.

How the business is shaping up, right, over the next one to two years, although the losses have come down in this particular quarter? Is it like that have you added more customers, products, how the things are moving towards additional regulatory approvals, et cetera?

If you can just simple help us understand that how to look at the trajectory of this particular business. Thank you.

Sure. The API business was struggling because largely it was dependent on cephalosporins, which had extensive price erosion of over 30%, right?

Last year we had last year we had almost a 90%-plus COGS in this business, right? That COGS today has come down slightly.

At Q3, we were at roughly 87% COGS, right? This is where we are focusing more on other products apart from cephalosporins, right?

Within cephalosporins, the idea is how we can only focus on products which make business case for us. Secondly, we also expect that in the coming quarter, we should sometime go for European audit as well and start supplying the CPs, as we announced in the last quarters, a couple of CPs have already been filed.

Then moving to the regulated market play within cephalosporins will give us a better margin, and focusing on non-cepha products will also enhance our bottom line. The focus is how can we reduce our overheads, improve our gross margins, either through different portfolio or through different geographies.

That's how we look at the API business.

Understood. Thanks.

That's from my side.

Hello.

Yeah. My question was on the Zambia contract and the EU CDMO contract.

Could you give an update on the timelines when we expect the businesses are ramping up and what the revenue and margin outlook could be in the next couple of years?

Sure, Madhav. I'll take Zambia first.

Zambia, we expect, as we mentioned in the initial commentary, in H1 we should expect the supplies of $25 million, which was a part of the contract, which will happen from the Indian company to the Zambia, right? In parallel, we are actively doing the project planning of it and will soon start the erection of the facility along with commissioning, which will take roughly two years from now, right?

So '26, we'll have a $25 million of revenue in the calendar year '26 coming in, and then similarly in calendar year '27 as well, we'll have $25 million of revenue coming in in the CDMO. Sometime in calendar year 2028, we should start with the supplies from the Zambia facility only to Zambia, and then further explore what all we can do with that in the other neighboring nations.

That is it. Margin profile, this will be largely similar to our existing CDMO business for the current two years, and then we'll see how the margin profile plays out when we start doing it from the Zambia.

On the European contract, as we said, we in January received the EU GMP audit of plant two, which was successfully inspected in October of 2025. We'll now start with the regulatory filings and country registrations, which might take a near or so.

Once it is there, the clients will start placing us the order, and then we'll start the commercial supplies. As we said, this will slightly be better from the existing 13% of CDMO margins, but will remain in the teens only.

Okay. The annual revenue size is how much, if you could just remind us, for the EU CDMO contract?

Sure. Once we start commercializing, the annual run rate for the orders will be in the tune of 35 million euros, and the contract is till December of 2032.

Okay. Got it.

Got it. Understood.

All right. Great.

All right. Thank you so much.

Thank you.

Hi. Good afternoon, sir.

My first question is, can you please elaborate on market-wise performance in international branded segment? I recall we had a disruption in some markets.

How have they recovered?

Thanks for the question. If you see, we have almost doubled our revenue from Q2, right?

The markets have performed well, most of the important markets which were of focus to us have done well. If we even look at the gross margins, in this business we were operating at a 25% gross margins, which we have expanded to 35-odd percent, right, in this quarter, right?

The recovery has come both in terms of margins as well as in terms of top line to us. The recovery looks stable as of now, in Q4 as well we expect a decent performance from this segment.

Okay. My second question is, how will we benefit from the European FTA, since this is the next leg of growth for the CDMO business?

While it is too soon to comment, but as we said, for past two, three years, Europe is one market which outside of India is a focus for us, right? All these positive regulations and efforts which the Government of India has undertaken will certainly help us and the Indian community as a whole to do business in Europe.

Okay. My next question is, what are the margins for Zambia contract currently?

How will they change once the plant is set up in just Zambia?

As we said, this will remain in teens, largely 15%, 17-odd percent is what we expect. Since this is also a government procurement, right, these are not the branded margins you expect, but this will certainly be couple of margin points above than our CDMO business.

Once we start doing it from the Zambian plant only, there might be some efficiencies in logistics, procurement, cost reductions, so that might give us couple of percent points better EBITDA. This is how we look at it.

Okay. My last question is, any updates on the trade generics business wind-up?

For API business, how long will it take to turn around? Also, is there any guidance you would like to give for FY '26 and FY '27?

Three questions. First, trade generics.

Trade generics, as of now, as you see, this is recovering, right? While the process is on how do we rationalize and minimize the operations, we still see maybe Q4 we might have some hit on the bottom line, but much of the pain is a thing of past.

On APIs, we are still doing what we can do, right? I do not have a timeline in mind of when this will turn positive on a monthly basis, but I can assure you that the management actions are in the right direction to bring it at a breakeven, and by the efforts I've just mentioned in the earlier question.

On the guidance for the year, I think as we said, quarter four we continue to see a good volume traction to us. The exports, the Akums and other businesses all look in good shape, right?

This is what I can summarize, and then once we are through with quarter four, we'll be able to better guide on the next year.

Okay. Thank you, sir.

The growth drivers for the next year are already in place, which were initially ours, not just the domestic, but the Zambia and the other contracts. That's how we look at the business.

Okay. Thank you.

Hi. Can you hear me?

Hello. Okay.

Yeah. Firstly, congratulations for a good quarterly performance.

I just wanted to delve a little deeper into the reasons for your volume growth in the CDMO business. You've mentioned in the presentation that the market growth was about of 1.5%, but your volume growth has been significantly higher, which means that you've probably gained a lot of market share.

If you could give some color to are there any forces acting on the industry which are for players like you which are leading to a market share gain, or what really lies behind it, or is it just something specific to you and your customer relationships? Just a little bit more color on that.

My second question was that you've also mentioned in your preamble that you would like to take the company and make it an international CDMO player. Now what we see is that one large market, which is the US, is not at the moment in your portfolio.

At some stage, do you have plans to also extend the CDMO business to US players? How are you really thinking about it, if you could answer these two, please?

Sure, Sangeeta. Thanks for your questions.

On the first, on volumes, as we were discussing earlier, this has been a broad volume growth, which we saw across client base, across therapy areas, right? While the market volume grew at roughly one-odd percent, which you rightly mentioned, this is a historic growth.

I think one is we manufacture and then give it to the marketing company, we might see an uptick. That can be one.

Or secondly, while we don't exactly know the causes, to be honest, what drove it, it could be a higher confidence for other brands as well that our existing partners have shown in us. This is a portfolio play, right?

We have been able to take on most of the key things. This is what the business is, across multiple product lines, across dosage forms, across therapeutic areas, across multiple clients over 1,500, right?

This is the strength of Akums, and this is where we stood right. As we said, quarter four also looks good in terms of the volume traction, right?

That is one, not just across branded pharma, but across trade pharma, across non-pharma like nutra and cosmetics and other channels, right? We have been able to do and generate volumes across all of these fronts.

That is on volumes.

On the US,

on the US specifically, so as we said, our immediate focus in regulated markets is Europe. I think this is a journey.

We are still a two-decade-young company, right? As we go and set out our foots outside India into regulated markets, we wish to first tap the opportunity which is there in Europe.

We are not saying we'll not be in US or don't know when the right time will come as of now, but we are positive that one day we would have operations in US, but as of now, the focus is Europe.

Okay. If I can squeeze in one more question.

My understanding is that the way your pricing works with your clients is that your markup is on a percentage basis, which means that like in the past when the API prices have declined, the absolute amount of say EBITDA or gross margin, whatever you earn, actually comes down, and the reverse will happen if API prices to rise. Is this formula a cast in stone or is that something that you would look to revise where maybe you make a certain amount of absolute profit per volume?

Also, does the same formula apply for your European partners also?

Sure. On the first, there's nothing cast in stone, but that's how the industry work, not just us, but our peers and and the other people in this industry.

It is usually how we the model has been set out in the industry is a percent of the costs to us. Whether the API prices come or down, this usually remains intact, that the percent the percent might differ by the complexity of the product, right?

For a complex product, I might charge a percent higher than a simple product with where my margin on the input costs might be lower, but it always remains as a percent of my input costs. That is one.

What was the second question?

Would that still apply to your European partners also? Is that how the pricing would be then for Europe?

Sure. No, for the Europe, it's a fixed pricing which we have currently agreed for this particular contract.

As we move ahead, we get more experience and expertise, it might change, but for the current one, it is a fixed-pricing contract. Right.

Okay.

All right. Okay.

Thank you very much.

Thank you for the opportunity, sir. Sir, on page number 12, we have mentioned that due to product mix change, our revenue has decreased by 49 crore.

Can you explain it, what was the reason for it and is it structural or one-off?

I think this is just we wanted to showcase our growth into various key lever heads, right? As we said, our gross margins compared to last year have largely improved, right?

If you look at it, the adjusted EBITDA has a 1.1% improvement of the gross margins itself. Honestly, it's a make-to-order what we do, right?

If we track the last four quarters, we have been able to be in the range of 37-odd percent gross margins in our CDMO business. This might fluctuate here and there in terms of quarterly performance, but nothing as a downward trajectory we expect.

Okay. Sir, I wanted to understand that we are going from base formulation businesses to niche formulation business.

Our product mix should change upwards and our revenue should grow from product mix change and not decline. This quarter it has declined, so that's why I was asking the question.

Rightly, so as I said, this all depends on if you really look at it, the nine months, it has largely remained stable if you flip to the next slide. The impact of product mix is not there.

This is a business, right? You have to look in larger periods to really ascertain whether the product mix is changing, because as we continue to invest in R&D, then we launch the product, then it's ultimately a prescription product for the marketing company, they go and sell, then the repeat business comes, right?

It's best if we look on a longer horizon, and as you could see, it has no impact on our EBITDA.

Okay. Thank you, sir.

Sir, on Schedule M implementation, as we know that the due date for implementation was 31st December. How are we seeing it on ground?

Has the government become more enforcive in terms of regulation and it is becoming unviable for them and they are closing down? Any thoughts of you for on-ground situation on that?

No comments. Yeh toh sir government ka matter hai, ispe zyada comment

karna accha nahi hai hamare liye. Okay.

Thank you, sir.

Hi, Sahil. Hi, Ankit.

Vipin Goel from Mirabilis Investments. I had a couple of questions, one is on the injectables--

Yeah. Hi.

Am I audible now?

Vipin Goel from Mirabilis Investments. Hope you are doing well, Ankit and Sahil.

I had a couple of questions on the injectables facility. One on injectables and the other one on the minimum import price which was recently announced.

The first one on the injectables facility, this was commercialized in phases as per my understanding. In Q4 Q2 last year was the first phase, and then lyophilized vials were commercialized in Q3, and then further FSFS in Q4.

Can you help us quantify first the current utilization across all these lines and second on the revenue contribution so far from this facility,

please? The utilization, as you rightly said, this has been in phases.

We are still ramping up, right? We are doing the client audits.

The utilization is relatively low, it is in teens as of now, right? Hence, the utilization and the revenue contribution to the overall CDMO P&L is minimal.

What we expect is as we proceed in the next financial year over Q2, Q3, this should start ramping up well and should contribute to our overall injectable CDMO business.

What would be the profitability here? As per I think last quarter we were I think doing some 17 crore or so losses.

How far is it from breakeven and what's the current profitability?

For the nine months, hi, this is Sumeet. For the nine months, Sahil was explaining that the business has not been as much because it's to still pick out, there on an EBITDA level we have a 17.9 crore loss in the HL overall business.

Right, once we have the revenue triggering, this should turn around.

Okay. Does that mean has it break even?

Because until last quarter, it was 17 crore loss in the first half. If it's the same in nine months, then it's breakeven?

Ankit here. H2 till H1, there were three plants that we had mentioned, 17, but Sumeet sir has stated it's for two plants.

Okay. All right.

The next one was on the government had recently moved 10 G and 6-APA from restricted list to the restricted list and implemented a MIP on those. These are, I believe, upstream products for the cephalosporin.

How do you see this influencing our API business in terms of maybe pricing or volumes or margins?

Essentially, MIP, this is a industry-wide phenomenon, right? Any movement in the prices will apply to all, whether it is us to our CDMO business, API business, or to any of our peers or partners or competitors, right?

This will ultimately get absorbed, passed on as per the various cases, and we don't see MIP to really impacting any of our business units.

Okay. This will be positive impact, right?

Because prices the restricted, besides the MIP is higher than the current prevailing price. Any idea on what percentage of positive impact can be expected on the API business or let's say the CDMO business where we have pen and clavicular?

CDMO is the larger piece, right, API is low. Within CDMO as well, as you know that we have limited dependence on any one product class or therapy, right?

While there's a marginal increase that might result into marginal positive upside for us, but this will not certainly move the needle for us. The business whether or without MIP should be similar.

Got it. Okay.

That's it from my side. Thank you.

Sir. Congratulations on good set of number and very good volume growth.

The question on the volume growth was does part of the volume growth was adding a new product segment, or your existing past product also have seen double-digit volume growth?

This is the existing business only, Bhavin. As we said, the new facilities are still ramping up, and there was no major product launch in the quarter, right?

These were our existing portfolios for which we received a better order book.

Somewhere I saw overall utilization was at 47% in the presentation?

Correct.

Also you mentioned there was partial operating leverage benefit on the margin expansion, because volume growth and capacity utilization going up, which means in quarter four also looks good and the base is going up. We still have a significant operating leverage in terms of margin expansion when this reaches a critical size?

I think we are already at a critical size, Bhavin. As we had mentioned in our initial calls, right, 55%, 60-odd percent is something which we can reach in our utilization levels.

We still have few points here from growth for us, right? Having said that, the business of CDMO as today we speak is at a mature stage, and these are largely the margin profiles which we'll operate in.

Second is on the interest cost, which also includes a notional portion of 20 crores in Q3 and 58 in nine months. Europe contracts will start from next year.

Bhavin, your voice, can you please repeat this question?

Yeah. On the interest cost, I believe that the interest cost also includes around 20 crores in quarter three and 58 crores in nine months, which is a notional interest charge on Europe contract liabilities.

Entire amount will start reversing from next year when the European contract start?

The way it will start reversing is with the basis that we will make the supplies. The entire sum will not go at one go, but based on the supplies it will go away, because that much of advance will keep getting adjusted, because part of the money has been received in advance and part of the supplies will get paid from there.

Based on the proportion of the amount being adjusted, this will also get adjusted.

Just my question was that notional interest provided, there won't be any cash outgo on the same, right?

No, there is no cash outgo.

Last question. Yeah.

Accounting entry.

Accounting entry. My last question, what was the capital expenditure in this quarter and nine months?

The total capital expenditure that the company has made till now is 165 crores for the nine months.

Okay.

And 57 crores for this quarter.

Sorry, 57 crores for the quarter?

Yes.

Okay. FY '27, any guidance on numbers?

We've been stably investing based on the requirement of business, the maintenance and modernization capex. We think our capex investment will be in a trend of what we've done in the past.

Thank you, sir. Yeah.

Sir, only one question. I can see that domestic business grew 4% and previously you gave a guidance of mid-to-teen digits, but your EBITDA margins in domestic business grew well YoY.

Can you please explain about this?

Sure, since we operate on high gross margins in that business, and to do incremental business, my other costs largely remain the same, right? My manpower cost largely remain the same, which is the other second chunk of that cost, right?

Any improvement in the top line gives an extensively positive benefit on the bottom line.

For the year, this top line grew 4% only, can you explain about this?

Sure. As we mentioned in a couple of calls earlier and this as well, right, the focus has been for now on growing volumes and new products and how we can improve our headquarter-wise performance, right?

We are reducing a few HQs, were in line with our overall strategies, and price growths which we have took over this current fiscal has been minimal, which if you remove from the overall IPM as well, you will see a similar kind of growth. From next fiscal as well, what we think, we should be at par with the industry growth.

Okay. Thank you.

Hello. Can you hear me?

Yes.

Hello. Yeah.

Sir, my question was regarding your capacity utilization. At the moment, it's less than 50%.

Now how do you actually think about capacity utilization? Is this some kind of a strategic tool that you use that you will always keep some level of excess capacity in order to meet requirements of your clients, or you have just invested in anticipation of the growth that you see?

What is this likely to go up to going forward?

Sure. As you saw this quarter, right, there was an increased demand, right?

We always keep a buffer capacity to serve quarters and demands of excessive growth, right? That always remains the core of our capex investing.

On the second, while we operate at 47-odd percent, the peak we can do is roughly 55%, 60%, right? This not wherein we can achieve or double from here on, right?

We'll continue to invest in capex, as Sumeet ji was mentioning, in line with our previous years of investing into capex, and this will be to serve the dosage forms where we currently see that we are stretching out on capacities. All

right. Sir, could you just help me understand that why is it that your peak capacity can only go up to 55%, 60% and can't go higher than that?

Sure. We manufacture over 20,000 SKUs annually, right, and this is across 1,500 customers, right?

The changeovers are extensive in this business, right? This is a capacity which has been calculated on the total number of hours the machines can operate, right?

Then I have changeovers involves cleaning, changeovers, and so on, and then I also have preventive maintenance schedules, right? Hence, the overall effective utilization comes down to these levels.

Okay. Thank you.

Thank you, everyone, for attending the Q3 earning calls for Akums. If you have any remaining questions, you can reach out to the investor relations teams.

Thank you, and have a good day.