Akums Profit PLUMMETS 36%! Pharma Giant's Global Expansion Gamble - What Investors Must Know!

Healthcare/Biotech

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Updated on 13 Nov 2025, 01:40 pm

Akums Drugs & Pharmaceuticals, a leading contract development and manufacturing organisation (CDMO), announced a significant 35.82% year-on-year drop in consolidated net profit for the second quarter ended September 30, 2025, settling at ₹43 crore. This decline comes as margins moderated amid a softer operating environment, with consolidated revenue standing broadly flat at ₹1,018 crore compared to ₹1,033 crore in the prior year. EBITDA fell by 22.3% to ₹94 crore, and the EBITDA margin contracted to 9.3% from 11.7%. The CDMO segment remained the primary growth driver, contributing ₹804 crore to revenue with a 7% YoY volume increase. The domestic branded formulations business showed improved margins, while branded exports maintained healthy margins. The company also reported milestones in international expansion, including the inauguration of a pharmaceutical plant in Zambia as a joint venture and its first commercial formulation supply to Europe.

Impact This news has a moderate impact on the Indian stock market. The sharp decline in profit and margins raises near-term concerns for investors regarding operational efficiency and profitability. However, the strategic international expansion into Zambia and Europe presents a long-term growth opportunity and diversification benefit. Investors will likely weigh the immediate financial pressures against the potential of these global ventures. Rating: 6/10.

Difficult Terms: * **CDMO (Contract Development and Manufacturing Organisation)**: A company that offers pharmaceutical development and manufacturing services to other drug companies. * **YoY (Year-on-Year)**: A comparison of financial data from one period to the corresponding period in the previous year. * **EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)**: A measure of a company's operating performance, excluding financing, tax, and non-cash depreciation/amortization costs. * **EBITDA Margin**: EBITDA as a percentage of revenue, indicating operational profitability per unit of sales. * **PAT (Profit After Tax)**: The net profit remaining after all expenses, interest, and taxes are accounted for. * **EU-GMP**: European Union Good Manufacturing Practice, a quality standard required for pharmaceutical manufacturing and sales within the EU.