ACUTAAS

Chemicals Posts Robust Q1 Numbers

-> Strong Q1 FY26 Performance:

reported robust Q1 FY26 results, driven by a 23% year-on-year growth in its pharma intermediates business, which accounts for 80% of sales. -> Margin Expansion: Gross margins expanded, likely due to strong performance in the non-CDMO business. The specialty chemicals business (20% of sales) remained flat. -> Positive Outlook for CDMO: Revenue visibility is strong with additional approvals for the oncology drug, Darolutamide (Nubeqa), and another key CDMO contract starting in Q4 FY26. -> Strategic Investments & Capex: The company is investing in new ventures like semiconductor and battery chemicals. A JV with J & Materials (75% stake) will manufacture semiconductor chemicals, commercializing by early CY27. The company has a capex of Rs 250 crore for FY26, including Rs 180 crore for electrolyte additives and Rs 30 crore for a new R&D plant. -> Balance Sheet Strength: The strong balance sheet and cash flows from the intermediates business provide a solid foundation for these new investments, which currently have a gestation period. -> Upcoming Benefits: The company's new solar capacity (15.8 MW) is expected to provide benefits starting from Q3 FY26, while new electrolyte additives will contribute to the top line from FY27.