Akums bets on global CDMO expansion, cosmetics play to drive next growth phase

Akums Drugs & Pharmaceuticals is looking to broaden its growth drivers beyond the domestic pharmaceutical manufacturing business, with an expansion of its global contract development and manufacturing organisation (CDMO) operations and an entry into colour cosmetics forming key parts of its next growth phase.

The company's strong September-quarter performance has provided momentum to these plans. Akums reported a 31.9% year-on-year increase in revenue to ₹1,342 crore in Q2 FY27, while EBITDA more than doubled to ₹195 crore. Net profit surged 168% to ₹115 crore from ₹43 crore in the year-ago quarter.

Speaking to Fortune India after the results, Arushi Jain, Director, Akums Drugs & Pharmaceuticals, said the growth was led by the CDMO business, supported by healthy volume expansion, better capacity utilisation and operational efficiencies.

“The growth in the quarter was driven by healthy double-digit volume growth in our CDMO business, along with improving operational efficiencies,” Jain said, adding that better realisations in the API business and stronger gross margins also contributed to the improvement in profitability.

The CDMO segment, which remains the company's principal growth engine, reported a 38.6% increase in revenue to ₹1,115 crore in Q2 FY27 from ₹804 crore a year earlier. EBITDA from the business nearly doubled to ₹168 crore from ₹84 crore.

Jain said the company was seeing increasing penetration in the Indian pharmaceutical market, alongside sustained demand from existing and new customers. Improved capacity utilisation and operating leverage also helped translate revenue growth into stronger earnings.

Akums' EBITDA margin expanded to 14.5% in the quarter from 9.3% in Q2 FY26. For the first half of FY27, revenue rose 22.9% to ₹2,509 crore, EBITDA increased 65.3% to ₹369 crore, and profit after tax doubled to ₹216 crore.

H2 outlook remains positive

On the outlook for the second half of the financial year, Jain said the company remained optimistic about demand, particularly in its CDMO business. She said Akums would continue to focus on strengthening customer relationships, expanding manufacturing capabilities and improving operational efficiencies.

The company is also looking to sustain profitable growth rather than pursue expansion at the expense of margins. Its priorities include improving manufacturing productivity, optimising capacity utilisation and deepening its engagement with pharmaceutical customers.

Global CDMO expansion gathers pace

International markets are expected to become an increasingly important part of Akums' growth strategy. The company has two products approved in Europe, eight products filed and more than 30 products in its research and development pipeline. These products are expected to be commercialised over the next three to four years.

Akums is also progressing with a European CDMO project, with supplies expected to commence in FY28. In Africa, its joint venture with the Zambian government is expected to begin commercial supplies from its Indian manufacturing facilities in Q4 FY27. However, revenue recognition is expected in Q1 FY28, considering the longer shipping timelines.

The company has completed technical discussions for setting up a manufacturing facility in Zambia, which is expected to become operational in 2029.

Jain said the international expansion strategy would draw on Akums' manufacturing scale, formulation expertise, product development capabilities and quality standards. The company sees these capabilities as important to building relationships with global pharmaceutical customers and increasing its presence in regulated markets.

Oriflame deal opens cosmetics opportunity

Alongside its international expansion, Akums is diversifying into adjacent manufacturing categories through the acquisition of Oriflame India's manufacturing business.

“The acquisition of Oriflame India's manufacturing business provides us with an entry into colour cosmetics and strengthens our capabilities in skincare and wellness manufacturing,” the company said.

The acquisition broadens Akums' manufacturing portfolio beyond pharmaceuticals and gives it an entry into the beauty and personal care segment. It also adds colour cosmetics to its capabilities, alongside skincare and wellness products.

The move is part of the company's effort to leverage its manufacturing infrastructure and expertise across a wider range of product categories. While CDMO remains the core growth driver, the cosmetics business offers another avenue to diversify its manufacturing operations.