Akums Drugs & Pharmaceuticals Limited (NSE: AKUMS) Q3 2026 Earnings Call dated Feb. 16, 2026
Corporate Participants:
Sandeep Jain — Co-Founder and Managing Director
Sumeet Sood — Chief Financial Officer
Sahil Maheshwari — Head Strategy
Ankit Jain — Investor Relations
Analysts:
Unidentified Participant
Abdulkader Puranwala — Analyst
Vivek Agrawal — Analyst
Madhav Marda — Analyst
Ikshit Naredi — Analyst
Sangeeta Purushottam — Analyst
Ashutosh Parashar — Analyst
Gaurav Tinani — Analyst
Presentation:
operator
Ladies and gentlemen, Good day and welcome to the Q3FY26 earnings conference call of Ekombs Drugs and Pharmaceuticals Limited. As a reminder, Ekoms Drugs and Pharmaceuticals Limited hosted by Ambit Capital. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on a touchtone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Gaurav Tinani from Ambed Capital. Thank you. And over to you, Gaurav.
Gaurav Tinani — Analyst
Thank you, Michelle. Good day everyone. On behalf of Ambit Capital, I would like to welcome you all to the Q3FY26 earnings call for Acums Drugs and Pharmaceuticals Limited. I now hand over the call to Mr. Ankit Jain to introduce Akum’s management. Thank you. And over to you Ankit.
Ankit Jain — Investor Relations
Thank you Gaurav for the introduction. Good afternoon everyone. Welcome to ACAM’s Q3 and 9 month FY26 earnings call. I am Ankit Jain and I head Investor Relations Pharmaceuticals Limited. On today’s call we are joined by Mr. Sanjeev Jain, Managing Director, Mr. Sandeep Jain, Managing Director, Mr.— Sumit 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 from what is expressed or implied in such statements.
At acams, 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.
Sandeep Jain — Co-Founder and Managing Director
Thank you Mr. Ankit. And once again appreciate everyone for taking time out to join us for our Q3 and 9 months FY26 earning call. Q3 FY26 was a strong quarter for Acams. 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 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 FY28. Our overall solid 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 1 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 FY27. These developments further showcase our progress towards establishing ACAMS as a global pharmaceutical company. During Q3FY26, the API business remained under pressure with pricing, softness, persistence across key molecules. However, the piece of decline, moderated and ongoing portfolio rationalization and cost optimization initiatives help contain losses and improve sequential performance. Building a future ready organization through automation is key focus for us. We have recently initiated our SAP S4 HANA transformation which will enable improved efficiency, automation and real time analytics across multiple functions within the organization.
Similarly, we have implemented Darwin Box 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 ACAMS 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. Sumit sir to continue the discussion with the finance Mr. Sumitzu.
Sumeet Sood — Chief Financial Officer
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 1160 crore an increase of 14.8% year on year. The Q3FY25 revenue stood at 1010 crore and increasing 14% quarter on quarter which was 1018 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. Q3FY25 was rupees 136 crore and increasing 42.8% quarter on quarter Q2FY26 was 127 crores. EBITDA margins were at 15.2% increasing 191 basis point year on year and increasing 309 basis points quarter on quarter. Profit after tax stood at 68 crore an increase of 2.1% and in Q3FY25 it was 66 crores and increased 58.5% quarter on quarter Q2FY26 was 43 crores. As you’re all aware there was a Labor code impact which came into the financials. The 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. So if we look at the CDMO business the revenue stood at 916 crores an increase of 16.3% year on year. It stood at seven hundred and eighty seven crores for the quarter FY25 and an increase of 13.8% quarter on quarter. During quarter two FY26 it was eight hundred and four 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 Q2FY26. 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 EVA prices continue to trend lower. However, the losses were also curtailed to 11 crores for the period Q3 of FY25 as well as for Q2 FY26 were 14 crore. So 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 minus 3%. Similar to the Q2FY26 quarter and significantly lower than Q3FY25 which stood at 8 crores. We continue to have a very strong cash surplus of 1573 crores. The cash flow from operations stood at 1109.5 crores and the free cash flow for the group was 944.5 crore. This from our side conclude the financial highlight for the quarter. I would request the moderator to open the forum for question and answer session. Thank you.
Questions and Answers:
operator
Thank you very much, sir. Thank you. We will now begin the question and answer session. Anyone who wishes to ask questions may please press Star and one on the touchtone phone. If you wish to withdraw yourself from the question queue, you may press Star and two participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press Star and one to ask questions at this time. The first question is from the line of Abdul Kadar Puranwala from ICICI Securities. Please go ahead.
Abdulkader Puranwala
Yeah. Hi sir. Thank you for the opportunity. My first question is pertaining to your CDM growth. Especially on the volumes front this quarter. So could you help us understand just a little better?
Sahil Maheshwari
So Abdul, you are trying to ask where the volume growth has come from. Hi, this is Sahel.
Abdulkader Puranwala
Yes. Yes sir.
Sahil Maheshwari
So Abdul, so this was broad based, right? So existing customers whether through existing brands, new brands, existing channels, so cross therapies. So while we try to dig deeper. But this kind of volume growth up to was has to come from a pace Itself. Right. We also could see that this came at a similar gross margin profile. So 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. So a healthy volume growth driven by improved gross margins compared to last Q3. So this was a broad based recovery I think for the overall market only.
Abdulkader Puranwala
Okay. To just understand this little better. So this 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 number?
Sahil Maheshwari
No. So Abdul, so we, since we have not started the exports business for the European contract as of now. So this is all manufacturing income.
Abdulkader Puranwala
Got it. And one more on the domestic branded generation. So you know, this particular segment has been growing at the single digit kind of a growth rate but the margins have improved. So just wanted to understand how are we trying to work on this? I mean is margin a better focus here rather than top line growth?
Sahil Maheshwari
So Abdul, so this is in line. With what our overall strategy for the fiscal had been. Right. So top line growth was not a key driver for us, it was how do we improve our profitability in this business. Right. So a better control over overheads, rationalization of where we the debtors or inventory where we could potentially lose money. So all of those things have played out well for us this time and hence while we still make a loss in this segment, the loss is not as stark as it used to be. Last Q3.
Abdulkader Puranwala
Got it. And Frank, just on the EU supplies, so when you’re talking about oral solid formulations, so how big is this opportunity and is this also a part of your CDMO business? Only when you’re recording revenues here.
Sahil Maheshwari
So I go top down. So yes. So since we are manufacturing a brand owned by someone else, so it will be classified under cdmo. Right. Then secondly, how big is the opportunity? So as the at the discussions with the customer. So this will largely be 35 million euro annually for us. And as was stated in the initial commentary, we have already received our approval for our plan 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 and subsequently in the next financial year we should start the commercial surprise.
Abdulkader Puranwala
Okay. Okay. And just last one on the cash part. So it’s sitting on cash accounts for some time. So any thoughts around that? How are you going to deploy?
Sahil Maheshwari
So Abdul, rightly so. 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. So 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. So that remains a key filter.
Abdulkader Puranwala
Thank you Sahil and thanks team.
operator
Thank you. Will take the next question from the line of Vivek Agarwal from Chitti Group. Please go ahead.
Vivek Agrawal
Yeah, thanks for the opportunity. Just trying to understand the CDMO volume 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? Thank you.
Sahil Maheshwari
Sure. So I’ll probably address in two parts. Vivek, thanks for the question. First of all, the CDMO is a make to order, right. So we cannot stock the stock quarterly. Right. So it’s a make to order. So 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. So this as of now looks sustainable in the near term at least.
Vivek Agrawal
And so what has suddenly changed? Right. So in the last I think three, four quarter maybe, I think we have consistently seeing issues in the volume. Right. And not just at the company level but at the industry.
operator
I’m sorry to interrupt you Mr. Agarwal. Can you kindly use your handset? Your audio is not that clear, sir.
Vivek Agrawal
Okay, sorry. So just trying again. So if we look at last one to two years. Right. So the volumes across the industry as well as for the company. Right. So it was under problem. Some challenges were also there. So what has changed in this particular quarter? If you can highlight.
Sahil Maheshwari
So while I won’t be able to comment on what the recorded data looks like. Right. So 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. So 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 playoff enforced regulations being stricter. Right. So that is one. The second is also the play across generic side. So.
Right. So that is also a channel which is growing and it is growing well for us. Right. So that is there. But having said that, the branded business also saw good volume growth. So it’s an overall volume growth across all therapeutic areas. All largely all channels of Distribution.
Vivek Agrawal
Understood. But if you look at the margins, right. Although you have seen sequential improvement in the CDMO business, but it is still below YUI, right? Close to around 170, 180 basis point. So how you see the margin trajectory going forward? Maybe next three, four quarters. Thank you.
Sahil Maheshwari
So if you look at it Vivek, so the gross margins, we have been able to have a good gross margin profile for last year 36 odd percent. We have moved 37.345%. So that has been the track rate. Right. So the below expenses we as Sumitji mentioned, there was one off two odd crore in the employee expenses. But beyond that as well we continue to invest in technological upgrades which was also mentioned in an initial commentary and also continue to invest in our R and D which boils down to our margin profile. Right. Having said that, as of now these current level of margins are ones 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 of a right margin profile for this segment.
Vivek Agrawal
Understood? One question on API business. So how the business is shaping up right over the next one to two years Although the losses have come down in this particular quarter. So is it like that? Have you added more customers, products, how the things are moving towards additional regulatory approvals etc. So if you can just simple help us understand that how to look at the trajectory of this particular business. Thank you.
Sahil Maheshwari
So the API business was struggling because largely it was dependent on syphilis points which had extensive price erosion of over 30%. Right. So last year we had, last year we had almost a 90% plus cogs in this business. Right. So that cogs today has come down slightly. At Q3 we were at roughly 87% COGS. Right. So this is where we are focusing more on other products apart from syphilis porins. Right. Within syphilis porins 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 CEP that we announced in the last quarter.
A couple of CEP’s have already been filed. Then moving to the regulated marketplace within cephalosporins will give us a better margin and focusing on non CEFA products will also enhance our bottom line. So the focus is how can we reduce our overhead, improve our gross margins either through different portfolio or through different geographies. So that’s how we look at The API business.
Vivek Agrawal
Understood. Thanks. That’s from my side.
operator
Thank you. The next question is from the line of mother of Marda from fil. Please go ahead. Mr. Marda, I have unmuted your line. Please proceed with your question.
Madhav Marda
Hello.
operator
Yes, please proceed.
Madhav Marda
Yeah, yeah. My question was on the Zambia contract and the EUCDMO contract. Could you give an update on the timelines when we expect the business to start ramping up and what the revenue and margin outlook would be in the next couple of years?
Sahil Maheshwari
Sure, Madhav. So I’ll take Zambia first. So Zambia we expect, as you 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 the commissioning which will take roughly two years from now. Right. So 26, we’ll have a US$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.
And 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. So that is it. Margin profile. So this will be similar to our. 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 have in January received the EUGMP audit of Plan 2, which was successfully inspected in October of 2025.
We’ll now start with the regulatory filings and country registrations which might take a year 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 also be. This will slightly be better from the existing 13% of CDMO margins but will remain in the teens only.
Madhav Marda
Okay. And the annual revenue size is how much? If you could just remind us for the EUCDMO contract.
Sahil Maheshwari
Sure. So once we start commercializing, the annual run rate for the orders will be in the tune of 35 million million euros. And the contract is still December of 2032.
Madhav Marda
Okay, okay. All right. Great. All right. Thank you so much.
operator
Thank you. The next question is from the line of Ikshat Naredi from Naredi Investments. Please go ahead.
Ikshit Naredi
Hi. Good Afternoon sir. So 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?
Sahil Maheshwari
Thanks for the question. So if you see we have almost double our revenue from Q2. Right. So the markets have performed well. Most of the important markets which were of focus to us have done well. If you even look at the gross margins, something different in this business we were operating at a 20 gross margins which we have expanded to 35 odd percent. Right. In this quarter. Right. So the recovery has come both in terms of margins as well as in terms of top line to us. And the recovery looks stable as of Now. So in Q4 as well we expect decent performance from this segment.
Ikshit Naredi
Okay. And my second question is how will we benefit from the European FTA since that this is the next leg of growth for the CDMO business?
Sahil Maheshwari
While it is too soon to comment, but as we said for past 2, 3 years, Europe is one market which outside of India is a focus for us. Right. So 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.
Ikshit Naredi
Okay, next question is what are the margins for Zambia contract currently? How did they change once the plant is set up in Zambia?
Sahil Maheshwari
So as you said this, this will remain in teens, so largely 15, 17 odd percent is what we expect. So since this is also a government procurement. Right. So 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 few couple of percent points better a bit. So this is how we look at it.
Ikshit Naredi
Okay. Okay. And my last question is any updates on the trade generics business wind up and for API business, how long will. It take to turn around? And also is there any guidance you would like to give for FY26 and FY27?
Sahil Maheshwari
So three questions. So first trade Gen Z. So trade Gen Z as of now as you see. So this is recovering, right? So 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. So 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 a break even at a break even.
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 Acumentis and other businesses all look in good shape. Right. So 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.
Ikshit Naredi
Okay. Okay. Thank you. Thank you, sir.
Sahil Maheshwari
And the growth drivers for the next year already in place as which were initially as not just the domestic but the Zambia and other contracts. So that’s how we look at the business.
Ikshit Naredi
Okay. Okay. Thank you.
operator
Thank you. Thank you. A reminder to all the participants that you may please press star and one to ask questions. The next question is from the line of Sangeeta P from Cogito. Please go ahead.
Sangeeta Purushottam
Yeah, hi, can you hear me?
operator
Yes, ma’. Am. Please proceed.
Sangeeta Purushottam
Hello. So 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 1 1/2 percent. But your volume growth has been significantly higher, which means that you’ve probably gained a lot of market share. Is there any, you know, if you could give some color to. Are there any forces acting on the industry which are, you know, for players like you, which are, you know, 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 also mentioned in your preamble that you would like to take the company, 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. So at some stage do you have plans to also extend the CDMO business to US players? And how are you really thinking about it? If you could answer these two, please.
Sandeep Jain
Sure. Sangeetha, 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. So 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. So 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.
So this is a portfolio play. Right. We have been able to take on most of the key things. This is what the business is accomplished across multiple product lines, across dosage forms, across therapeutic areas, across multiple clients over 1500. Right. So this is the strength of ecoms and this is where we stood. Right. And as we said, quarter four also looks good in terms of the volume traction. Right. So that is one not just across branded pharma, but across the that trade pharma, across non pharma, like new brand cosmetics and other channels. Right. So we have been able to do and generate volumes across all of these fronts.
So 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 decades 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 European.
Sangeeta Purushottam
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 for API prices to rise. Is this formula a cast in stone or is that, you know, 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?
Sahil Maheshwari
Sure. So on the first. So there’s nothing cast in stone, but that’s how the industry works. Not just us, but our peers and the other people in this industry. So it is usually how the model has been set out in the industry is a percent of the cost to us. And whether the API prices come or down, this usually remains intact that the person the percent might differ by the complexity of the product. So for a complex product, I might charge a percent higher than the simple product with where my margin on the input cost might be lower, but it always remains as a percent of my input costs. That is one. What was the second question?
Sangeeta Purushottam
Yeah, does this apply to your European partners also? Is that how you pricing it with them for your.
Sahil Maheshwari
Sorry, yes. So for the Europe. No, 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.
Sangeeta Purushottam
Okay. All right. Okay. Thank you. Thank you very much.
operator
Thank you. The next question is from the line of Akshay Shah from BVD Asset managers. Please go ahead.
Unidentified Participant
Thank you for the opportunity. Sir. Sir, on page number 12 we have mentioned that due to Kodak mix change our revenue has decreased by 49 crore. So can you explain it? What was the reason for it and is it structural or one of the.
Sumeet Sood
So I think this is just a better way of. We wanted to showcase our growth into various key lever heads. Right. So 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 margin. Honestly it’s a make make to order what we do. So. Right. So if we track the last four quarters we have been able to be in the range of 37 odd percent gross margins in our CTMO business. So this might fluctuate here and there in terms of quarterly performance. But nothing is a downward trajectory we expect.
Unidentified Participant
Okay. So sir, I wanted to understand that we are going from base formulation businesses to niche formulation business. So our product mix should change upwards and our our revenue should grow from product mix change and not decline. So this quarter it has declined. So that’s why I was asking the question.
Sumeet Sood
Rightly so as I said so. But this all depends on if you really look at it the nine month it has largely remained stable. If you flip to the next slide, the impact of product mix is not there. So this is a business. Right. So you have to look in larger periods to really ascertain where the product mix is changing. Because as we continue to invest in R and D then we launch the product and it’s ultimately a prescription product for the marketing company. They go and sell, then they the repeat business comes. Right. So it’s best if we look at on a longer horizon and as you could see it has no impact on our ebitda.
Unidentified Participant
Okay, thank you sir. And sir, on schedule M implementation as we know that the due date for implementation was 31st December. So how are we seeing it on ground? Has the government become more enforceive in terms of regulation and small players are becoming, it is becoming unviable for them and they are closing down. Any thoughts of you for on ground situation on that?
Sumeet Sood
No Comment.
Unidentified Participant
Okay. Okay. Thank you sir.
operator
Thank you. You may please press star and one to ask question. The next question is from the line of Ashutosh Parashar from mit. Please go ahead.
Ashutosh Parashar
Yeah, Hi. Hi Sahil. Hi. Ankit Vipin Goel from Investments. I had a couple of questions on. One is on the.
operator
I’m sorry to interrupt you, sir. I’m sorry to interrupt you. Your voice is not clear, sir.
Ashutosh Parashar
Yeah. Hi. Am I audible now?
operator
Yes. May I request you to please repeat. I mean introduce yourself again, sir.
Ashutosh Parashar
So Vitamin one from Mirabilis Investments. Hope you’re doing well. Ankit and Sahil, I had a couple of questions on the injectables facility. So one on injectables and the other one on the minimum import price which was recently announced. So the first one on the injectables facility. So this was commercializing phases as per my understanding in Q4. Q2 last year was the first phase and then liabilized while commercializing Q3 and then further FSS in Q4. So can you help us quantify the first the current utilization across all these lines and second on the revenue contribution so far from this facility.
Sahil Maheshwari
So 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. And hence the utilization and the revenue contribution to the overall CDMO PNL is minimal. But 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.
Ashutosh Parashar
What would be the profitability here? And like as per, I think last quarter there was some, we were I think doing some 17 growth or so losses. So how far is it from breakeven and oversip current profitability?
Sumeet Sood
So for the nine months. Hi, this is Sumit. For the nine months Sahil was explaining that the business has not been as much because it’s to still peak out. So there on an EBITDA level, you know we have a 17.9 crore loss in the AHL overall business. Right. So once we have the revenue, you know, triggering they should. They should turn around.
Ashutosh Parashar
So does that mean is it. Has it broke? Has it breakeven? Because until last quarter it was 17 crore loss in the first half. And if it’s, if it’s the same in nine months then.
Ankit Jain
So H2 till H1 there were three plants that we had mentioned 17. But Sumin sir has stated it’s for two class.
Ashutosh Parashar
Okay. Okay. And the next one was on this, on the government had recently moved Peng and six APA from restricted list to the restricted list and implemented a MIP on those. So these are I believe our upstream products for the cephalospherin. So how do you see this influencing our API business in terms of maybe pricing or volumes or margins?
Sahil Maheshwari
So essentially mip, this is a industry wide phenomena, right? So any movement in the prices will apply to all, whether it is up to our CDFO business, API business or to any of our peers or partners or competitors. Right. So 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.
Ashutosh Parashar
This will be a positive impact. Right? So because prices the predicted size MIP is higher than the current prevailing price. So any idea on like what what percentage of positive impact can can be expected on API on the API business? Or let’s say the CDMO business where we have semantic CDMO is a larger piece.
Sahil Maheshwari
Right. So API is low, but within CDMO as well. If you as you know that we have limited dependence on any one product class or therapy. Right. So while there is a marginal increase that might yield result into marginal positive upside for us, but this will not certainly move the needle for us. So the business whether or without MIP should be similar.
Ashutosh Parashar
Got it. Okay. That’s it from my test. Thank you.
operator
Thank you. The next question is from the line of Bhavan Shera from INAM Holdings. Please go ahead.
Unidentified Participant
Yes, 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 in double digit volume growth.
Sahil Maheshwari
So this is our base, the existing business only. Bhavin. So as we said, the new facilities are still ramping up and there was no major product launch in the quarter. Right. So these were our existing portfolios for which we received a better order book.
Unidentified Participant
And somewhere I saw overall utilization was at 47% in the presentation.
Sahil Maheshwari
Correct.
Unidentified Participant
So is there also you mentioned there was partial operating leverage benefit on the margin expansion because volume growth and capacity relation going up, which means in quarter four also looks good and the base is going up. So we still have a significant operating leverage in terms of margin expansion when this which reaches a critical size.
Sahil Maheshwari
So I think we are already at a critical size Bhavan. So as we had mentioned in our initial calls, right. So 55, 60 odd percent is something which we can reach in our utilization level. So we still have few points here from growth for us. Right? But 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.
Unidentified Participant
Second is on the interest cost which also includes a notional portion of 20 crores in Q3 and 58 in Europe contracts will start from next year.
Sahil Maheshwari
Voice. Can you please a bit.
Unidentified Participant
On the interest cost. I think, I believe that the interest card also includes around 20 crores in quarter three and 58 crores in nine months which is a notional interest charge on Europe contract liabilities. So this will start reversing from entire amount will start reversing from next year when the European contract start.
Sumeet Sood
So the way it will start reversing is with the basis that we will make the supplies. So 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. So based on the proportion of the amount being adjusted, this will also get adjusted.
Unidentified Participant
So just my question was the notional interest provided there won’t be any cash out. Go on the same, right?
Sahil Maheshwari
No, no. There is. There is no cash out. There is no cash out .
Sumeet Sood
Accounting entry.
Unidentified Participant
My last question. What was the capital expenditure in this quarter and nine months?
Sumeet Sood
So the total capital expenditure that the company has made till now is 165 crores for the nine months.
Unidentified Participant
Okay.
Sumeet Sood
And 57 crores for this quarter.
Unidentified Participant
Sorry, 57 crores for the quarter.
Sumeet Sood
Yes.
Unidentified Participant
Okay. And FY27. Any guidance on numbers?
Sumeet Sood
You know we’ve been stably investing based on the requirement of business. The maintenance and modernization capex. We think our capex investment will be in our trail of what we’ve done in the past.
Unidentified Participant
Thank you sir.
operator
Thank you. The next question is from the line of Ikshat Naredi from Naredi Investments. Please go ahead.
Ikshit Naredi
One more question. I can see Your domestic business grew 4% and previously we gave a guidance of mid 15 digits. But your EBITDA margins in domestic business grew well. So can you please explain about this.
Sahil Maheshwari
So to do any incremental. So since we operate on high gross margins in that business and to do incremental business, my other costs largely remain the same. Right. So my manpower cost largely remain the same same which is the other second chunk of the cost. Right. So any improvement in the top line gives an extensively positive benefit on the bottom line.
Ikshit Naredi
And this top line grew 4% only. So can you explain about this?
Sahil Maheshwari
Sure. So as we mentioned in a couple of calls earlier and this as well. Right. So the focus has been for now on growing volumes and new products and how we can improve our HQ wise headquarter wise performance. Right. So we are reducing a few HQs where in line with our overall strategy and price growths which we have took over this current fiscal has been minimal which if you remove from the overall IBM as well you will see a similar pattern kind of growth from next fiscal as well. What we think we should be at par with the industry growth.
operator
Thank you. The next question is from the line of Sangeeta from Cogito. Please go ahead.
Sangeeta Purushottam
Hello, can you hear me?
operator
Yes, yes ma’.
Sangeeta Purushottam
Yeah, so my question was regarding your capacity utilization. You know 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 your clients or you know, you have just invested in anticipation of the growth that you see. And what is this likely to go up to going forward?
Sahil Maheshwari
Sure. So as you saw this quarter, Right. So there was an increased demand. Right. So we always keep a buffer capacity to serve quarters and demands of excessive growth. Right. So 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. So this not wherein we can achieve or double from here on. Right. So we continue to invest in capex. And Sumitji 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.
Sangeeta Purushottam
Right. So 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?
Sahil Maheshwari
Sure. So we manufacture over 20,000 SKUs annually. Right. And this is across 1500 customers. Right. So the changeovers are extensive in this business. Right. So whenever I produce. So this is a capacity which has been calculated on the total number of hours the machines can operate. Right. And then I have changeovers after every involves cleaning changeovers and so on. And then I also have preventive maintenance schedules. Right. So hence the overall effective utilization comes down to these levels.
Sangeeta Purushottam
Okay, thank you.
operator
Thank you ladies and gentlemen. That was the last question for today. I would now like to hand the conference over to Mr. Ankit Jain for closing comments. Thank you. And over to you, sir.
Ankit Jain
Thank you everyone, for attending the Q3 earning calls for ACAM. If you have any remaining questions, you can reach out to the investor relations teams. Thank you and have a good day.
operator
Thank you, members of the management. Thank you, sir. Thank you, sir. On behalf of Ambit Capital, that concludes this conference. We thank you for joining us. And you may now disconnect your lines. Thank you.