Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Akums Drugs & Pharmaceuticals Limited (NSE: AKUMS) Q4 2026 Earnings Call dated May. 18, 2026
Corporate Participants:
Ankit Jain — Investor Relations
Sandeep Jain — Co-Founder and Managing Director
Sumeet Sood — Chief Financial Officer
Sahil Maheshwari — Head Strategy
Analysts:
Abdulkader Puranwala — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Acums Drugs Pharmaceuticals Q4FY26 results conference call. As a reminder, all participant lines will be in the listen only mode and there’ll be an opportunity for you to ask questions after the presentation concludes. Should need assistance please and conference call. Please signal an operator by pressing STAR and then zero on your touchstone phone. I now have the conference over to Mr. Abdul Pranwala. Thank you. And over to you.
Abdulkader Puranwala — Analyst
Thank you, operator. Good afternoon everyone and on behalf of ICICI Securities I welcome you all to the Q4FY26 earnings conference call of ACOMBS Drugs and Pharmaceuticals Limited. Today on this call we have with us the following members from the management team. Mr. Sandeep Jain and Managing Director Mr. Sumit Sood, CFO Mr. Sahil Maheshwari, General Manager Strategy and Mr. Ankit Jain, Head of Industry Revolutions. I now hand over the call to the management for the opening remarks followed by which we will open the line for Q and A.
Thank you and over to you Ankit.
Ankit Jain — Investor Relations
Thank you Abdul for the introduction. Good afternoon everyone and welcome to Akam’s Q4 and FY26 earnings call. I am Ankit Jain and I head Investor Relations at ACAM Drug and Pharmaceuticals Limited. I will commence with our standard disclaimer that any discussion on today’s call might include certain forward looking statements which are predictions of rejections of future events. Our business faces several risks and uncertainties that we cause our actual results to differ materially from what is expressed or implied in such statements.
At ecams. We do not undertake any obligations to publicly update any forward looking statements whether as a result of new confirmation of future events or otherwise. I hope you would have had an opportunity to review our investor presentation and financials that we posted on Thursday evening. I would now like to hand it over to our Managing Director Mr. Sandeep Jain to discuss our performance. Thank you.
Sandeep Jain — Co-Founder and Managing Director
Thank you Ankitji. Namaskar everyone and thank you for joining us today for our Q4 and full year FY26 earning call. During Q4 FY26 we maintained the business momentum on last quarter and ended FY26 on a strong north despite a very challenging H1 FY26. The operating environment through the first half was adverse characterized by sharp erosion in API prices and prolonged phase of low volume growth in the domestic market. We as ACMS managed to navigate the challenging phase due to the depth of our client relationship and quality of our manufacturing setup and at the same time continue to invest for the future to ensure long term sustainable growth.
Coming to operating performance for the quarter, CDMO once again delivered a healthy top line growth led by double digit volume expansion. We believe this reflects structural strength supported by growing customer preference for compliant manufacturers. Our international CDMO journey continued to gather pace following the EUGMT accreditation of our Plant 2 received in January. We have commenced dozier filing and country specific registrations across multiple European markets in line with our stated plan to commence commercial supplies from Plant 2 in FY28.
Supplies to Europe which began in the early part of this physical have continued to scale and along with the strong pipeline of 10 plus products for the European markets on the Zambia partnership the project remains on track with commercial supplies of approximately USD 25 million from our Indian facilities to Zambia expected to commence by the end of Q2 FY27 along with the project planning and erection of the local manufacturing facility. While accumented, the domestic branded formulation business reported modest revenue growth during the year.
Margins in the business expanded meaningfully validating the efficiency focused strategy. As we head into FY27 we expect this segment to grow at above IPM rates driven by new launches, focus on brand building and continued emphasis on field force productivity. Our international branded formulation business had a tough year with muted growth due to market specific disruption in our focus geographies. We expect this segment to return to growth as we are confident of the structural attractiveness of our chosen geographies in the API business.
Pricing pressure in the Cephalosporin persisted through most of the year resulting in continued losses. Our continued focus on cost optimization, portfolio rationalization, yield improvements and the gradual shift towards higher margin non cephalone sprayed products and regulated markets are expected to curtail losses for the coming year. The European audit of our API facility is expected in the upcoming quarter which would unlock regulated market opportunities at improved realization. The trade genic business turned a corner in this quarter going forward we expect a stabilized though much smaller profit oriented footprint going forward.
On the operational and digital infrastructure front, our SAP S4 HANA transformation initiated early this fiscal in progressing as per plan and will over time drive material improvements in efficiency, automation and real time analytics across functions. The Darwin box implementation across our HR function is delivering tangible employee experience benefits. We continue to invest steadily in capacity expansion R and D and modernization through the year with CapEx broadly in line with our can. Our newer facilities including the dedicated injectable plant, the Phenom facility and the new plant in Gaddy are all progressing through their respective ramp up curves with client audits and product approvals in advanced stages as volumes build in over FY27 and FY28.
These facilities will drive next leg of growth for the CDMO business. The Board has also recommended final dividend for the year FY26 for rupees 1 per equity share and a special dividend of rupees 2 per equity share. We thank all the stakeholders for their continued trust and patience through what was the transitional year and we reiterate our commitment to creating sustainable long term value for our shareholders. I shall now request our CFO Mr. Simi Sook to take you through the detailed financial for the quarter and the full year.
Over to you Mr. Sunil.
Sumeet Sood — Chief Financial Officer
Thank you sir. Thank you Sandeep Ji Good afternoon everyone. I will take you through the financial highlights. Revenue for the fiscal year 2026 stood at 4359 crores as compared to 4170 crore in FY25. An increase of 5.8%. Adjusted EBITDA stood at 522 crore. This is the highest that we’ve seen over the recent past. As compared to 461 crores in the previous year increasing by 13.3%. Adjusted EBITDA margin stood at 12% against 11.2% in FY25. PAT stood at 256 crores as compared to 344 crores in FY25.
Last year. There was a significant benefit of deferred tax asset that was created due to the restructuring of the group. This was 106 crores. I think important would be to look at the PBT which probably would insulate the tax the deferred tax asset. If we look at the PBT we were at 382 crores in FY26 compared to 341 crores in FY25 increase of 11.9%. If we look at the quarterly performance, Revenue stood at 1158 crores. This was 9.7% higher year on year and 0.1% lower quarter on quarter. Adjusted EBITDA stood at 152 crore.
This is 61.6 crore higher year on year Q4.25 was 94 crores and 3.3% higher quarter on quarter Q3.26 was 147 crores improved by driven by improved profitability in the CDMO segment and trade genetics segment turning EBITDA positive. Adjusted EBITDA margins were 13.1% versus 8.9% in FY25 and 12.7% in Q3 of FY26. The reported pack for the quarter was 81 crores compared to 150 crores for quarter 4, FY25 and 68 crores for Q3 FY26. As stated earlier, there was a significant deferred tax asset creation in Q4 last year.
If we look at the PBT for the quarter then The PBT is 121crores in Q4.26 compared to 75crores in Q4.25. If we go business the five segments that we’ve given. If we look at the CDMO, the CDMO performance has been good. The revenue stood for the year at 3485 crores compared to 3208 crores in FY25, an increase of 8.6%. EBITDA for the full year stood at 467 crores compared to 450 crores last year an increase of 2.9%. Q4 revenue was at 952 crores, a growth of 13.4% year on year and 4% quarter on quarter.
EBITDA stood at 137 crores improving 54.9% year on year and 9.1% quarter on quarter. The segment sustained its strong growth momentum while also benefiting from operating delivery driven by improved capacity utilization and ramp up of newer facilities. Domestic branded formulations FY26 revenue stood at 456 crores compared to 434 crores in FY25, an increase of 2.9%. EBITDA for the full year was 90 crores compared to 77 crores last year, an increase of 17%. Q4 revenue stood at 102 crores, decline of 1.5% year on year and 11.1% quarter on quarter.
EBITDA stood at 2022 crores similar to Q4 last year and declining 13.2% quarter on quarter. International branded formulation for FY26 revenue stood at 143 crores similar to last year which was also 143 crores. EBITDA for the full year stood at 36 crores compared to 28 crores last year, an increase Of 32.3% for Q4 revenue was 36 crore, a decline of 9.7% year on year and 28.5% quarter on quarter. EBITda stood at 10 crores improving 14.7% year on year and declining 22.3% quarter on quarter. For the trade generic business, the revenue stood for FY26 at 100 crores compared to 150 crore, 115 crores.
FY25, a decline of 13.2%. EBITDA for the full year stood negative of 10 crores compared to a negative 28 crores last year. For Q4 the revenue was 27 crore, a growth of 22.6% year on year and 10.2% quarter on quarter. EBITDA turned positive 1.4 crores from a negative 10 crores Q4.25 and a negative 3 crores Q3 FY26 for the API business in the current year the Revenue stood at 184 crores compared to 219 crores in FY25, a decline of 15.9%. EBITDA for the full year stood negative 40 crores compared to negative 44 crores last year.
For Q4, revenue stood at 41 crores, a decline of 18.8% year on year and 44.9% quarter on quarter. EBITDA stood at negative 12 crores compared to a negative 6 crores quarter 425 and a negative 7 crores. In Q3 FY26 the company’s operating cash flow stood healthy at 1181 crores compared to 465 crores last year. This is majorly attributable to the European contract that was assigned to the company. The free cash flow for FY26 stood at 958 crore versus 201 crore for FY25. We had a slight increase in the working capital days from a 91 crore to 100.
This was largely due to the buildup of inventory which was secured by advanced payment to creditors and we wanted to ensure the supply during the wartime. The company continues to maintain a strong liquidity position and cash and cash equivalent stood at 1682 crores and a healthy balance sheet of the company. We are well positioned to enter new fiscal year with positivity and confidence. I now request the moderator to open the forum for question and answers. Thank you.
Questions and Answers:
Operator
Thank you. We will now begin the question and answer session. Participants who wish to ask a question may press star and one on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to Use handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. We have the first question from the line of Sejal Kapoor from Anti Fragile thinking. Please go ahead.
Unidentified Participant
Hi. Thank you for the opportunity. Hi team, couple of questions. As your European and regulated market business ramps ramps up, which specific internal capabilities currently least scalable is it regulatory filing through port or quality systems or tech transfer, Is it leadership bandwidth or manufacturing facility? Because the capability that is required to compete successfully in highly regulated markets are somewhat different compared to Indian market. Right. So and that’s, that’s one part of the question.
And if you can also help in terms of, you know, what concrete investments are being being made today to get to a level where we can, you know, pitch Acoms as a high quality, you know, regulated market ready kind of a facility. Thank you.
Sahil Maheshwari
So Sajid. So this is Sahil from iKams. On the first question, obviously Reg market play requires stringent capabilities compared to the domestic capabilities. Few points. Why we think we are capable to serve those markets is one is we already serve large Indian customers and MNCs in Indian markets who themselves have a strict Kiara sheet of how they operate, right? So we have been serving MNCs for over 15 years now in India from the likes of all the large MMCs in India across their multiple product product be their regular established one for the new dcgis.
Right. Also we received our first European GMP approval way back in 22, right. So the capabilities we have been sending our capabilities and as you rightly mentioned, these are across R and D quality, production, regulatory everyone. So these capabilities since we already serve the larger ones in India and were also European gmp. So these are the capabilities which we think we have and as we go along we’ll further strengthen up those capabilities. The Plant 3 also received our Plant 3 also apart from European also received a visa approval this year, right.
So this again is a testament of our commitment towards regulated market. And we were also awarded the European CDMO contract which was after a thorough review by the partner. So it’s a learning journey. We are on the way and rightly so. We’ll have to strengthen capabilities as we go along secondly on the investments required. So this will be tied down to what projects in the future we get which capabilities with dozer forms we have to expand. But as we look today, we already have a European GMP approved facility for injectables.
We already have a European GMP facility for oral liquids and an injectable facility which is also VISA approved. Right. So for most of the important dosage forms which contribute to value and volume are already European GMP approved. And as we go along, we have plans for some additional plans to get European GMP approved over the next 18 months.
Unidentified Participant
Sure, that’s helpful. Very thoughtful. Thank you. And on the gross margin side, if you see ever since the IPO listing today, we are sitting at one of the highest or best ever gross margins this business has reported, which is very positive indeed. Now there are two kind of loops that are playing out in parallel for us as a business. One is the negative loop of what’s happening in the Middle east, which is something external. Everyone is facing, you know, crude linked inflation in solvents, etc. And we can only be backward integrated to a certain extent.
We cannot start manufacturing KSM and all the rest of it. So there will be some negative pressure coming from that side of the negative loop. In parallel there is also a positive loop that will play out which will be as we move from India into more complexity, more specialty regulated markets, we obviously expect to get a fair share of the pricing power with that should help our gross margins move up. But these two groups are kind of contradicting each other. So what I’m trying to understand here is what is what in your view is the net effect of one negative loop, which is a cyclical loop, hopefully, fingers crossed, and this situation will hopefully change at some point.
And the other one is much more structural loop, which is a positive loop, higher complexity, better specialty products and higher demanding markets giving us pricing power. So what is the net effect on the gross margin? In a nutshell,
Sahil Maheshwari
So I quickly address, as you rightly said, one is external, which is not really in our hands, but as a business model, it’s a pass through business model. So whatever is the cost of input material gets passed on as part of a CDMO contract. And on top of it is our conversion and margins. So while the uncertainty in the global environment creates a cyclical period of shortages, price hikes, but all of that gets pass through. Secondly, what is internal to us is how we can ramp up our unique differentiated dosage forms, our product offerings, our capabilities.
This is which we are constantly focusing on. If you look at really last three years we have been investing over 100 crores in our R and D which is a result of which we can at a larger base as well, we can gradually move up our gross margins.
Unidentified Participant
No, that’s helpful. And very finally, very quickly. Sorry to interrupt,
Operator
Request to kindly come back in queue for follow Up. Questions?
Unidentified Participant
Yeah, sure, no problem. Thank you.
Operator
Thank you. Participants are requested to kindly restrict to two questions per participant. We have the next question to the line of Aditya Shera from Incred Asset Management. Please go ahead.
Sandeep Jain
Hi sir. So last two quarters the volume variance has been north of 25%. So what is driving this and what is your outlook on the same? And the price variance has been a negative 3.5% on an average in the last few quarters. With API prices rising 10 to 20% on an average, will this reverse going forward? And if prices sustain, can we deliver a double digit growth in the CNO business by virtue of the same?
Sahil Maheshwari
Sure. So as you rightly pointed out, over the last two quarters in the H2 the volume growth has been significant. What we have seen, as we also discussed this in Q3, this is primarily led from existing customers only. Right? So this is not new geographies or new customers. So what we are seeing is increased demand for existing brands from the existing customers only. So honestly what it’s driving is still to be thought through and looked at. But because the overall IBM is still growing at a percent percent half.
But we think that this is a sustained growth because similar double digit growth is also visible as we sit in may for the Q1. Right. So that’s on the volume growth pricing wise. API prices over the last full financial year were a bit soft. Right? The whole of the year the API prices crashed by over 20 25% as a bust. Due to the current ongoing global geopolitical situations, the API prices have slightly gone up single high digits, they have gone up as a basket. Will they come down sharply soon? That is still to be seen.
But still the prices remain lower than what they used to be in April of last year. While the price has still gone up, they are still lower than the April prices. So the API stop softening still continues. If we have to compare it 12 months prior to it. Right. So volume growth looks positive. I believe the APIs won’t go down sooner from these levels. So that’s how we see the CDMO outlook from here.
Sandeep Jain
Got it sir. Next question was on the trade general turning EBITDA positive. If you can share your outlook on how do you see the trade genteel API business for FY27 and beyond? And a question on the tax rate expected for FY27 and 20. That’s it.
Sahil Maheshwari
I’ll maybe address the business side first and so much you can chime in for the tax on the trade. As you rightly said, we turned EBITDA positive. We over the last couple of years have really cut the business short and now it’s EBITDA positive. We are only doing the business in pockets where it makes sense for the business. This is expected to remain, as we mentioned in our opening statement, is expected to remain at similar levels of revenue with similar levels of ebitda. So this will not meaningfully contribute to the group’s top line or profitability as we move along on the epi.
This was a year of myth, honestly. The EPI prices continued to remain low and hence our costs, the cogs remain elevated which resulted that our fixed overheads and our variable expenses of manufacturing could not be fully utilized and we could not be EBITDA positive. The EPI prices have started to go up. We have also started to venture into exports are in March of this year we also started our European inspections. So all of those ceps have been filed in Visa Brazil as well. Right. So this year we are hopeful we should do much better than what we delivered last year in API.
And similar to a trade generics turnaround in 26, we are hopeful we can do some significant turnaround in APIs this fiscal year. On the tax,
Sumeet Sood
On the tax rate. If we were to look at some of the entities which are making losses, it does give an effective tax rate of 32 odd percent. But you know, going forward we think 29 on overall is something we can build into our business models. Right. But right now coming at around 32%.
Sandeep Jain
Got it sir, thanks.
Operator
Thank you. We have the next question line of Praveen Jayaraman from eventispark. Please go ahead.
Sandeep Jain
Thank you for the opportunity. Hope I’m audible. Sir, my question is on the model side. So in CDMO for Q4 FY26 our margins have expanded to 13.4% even though we had a product mix base which was adverse product mix of around 100 crores. Can you explain the model followed here? Sir, like I understood, it is a cost plus margins. Whether it’s a percentage margins or a margin fixed on an absolute basis. My question stems out on the case where even though the base portfolio carries lower absolute conversion margin compared to the niche, how could this adverse mix improve EBITDA margins this quarter?
What am I missing here, sir? Like on a sequential basis.
Sahil Maheshwari
Sure. So if you really compare it with last Q4 you will see an aberration. But look at standalone any other quarter, whether it is quarter three in general, every quarter you will see these are the regular margins. Q4 of 25 was a year where we had Significant dip in EBITDA driven again by the product portfolio and some year end provisions as well. Right. So this essentially in Q4 we had less of those low margin products and hence this looks to be a regular quarter.
Sandeep Jain
So is it a percentage margins or absolute one or like the model,
Sahil Maheshwari
This model is a percent margins on the input cost. So the input cost then depending on the product type, the dosage form, the quantity, the percent margins is applied on top of it.
Sandeep Jain
Okay. Okay, thank you. My second question is on schedule M. So now the deadline has passed and we heard like inspections would have started by now. So like have we seen any visible improvement like we getting some volume growth or customers approaching us on this angle due to MSME’s schedule M getting impact implemented.
Sahil Maheshwari
So while this remains within the purview of the government schedule M and is being followed through. Right. We’ll have to look for how this gets rolled out and implemented. But obviously even prior to scheduling, the customers we serve are largely cost quality conscious customers.
Sandeep Jain
So my question stems from the point like we said that there are some pricing disruptions caused by MSME people on due to the schedule and as now it is being implemented. Like still are they doing this cost cutting to retain customers or with this getting implemented we could expect those customers to come back to us.
Sahil Maheshwari
I will like to skip this question because honestly we have no visibility on ground of how the government plans to roll this out.
Sandeep Jain
Okay, so can I add one more question on the injectable side?
Sumeet Sood
Yeah, it’s okay.
Sandeep Jain
So the new injectables facility, what would be the utilization and what would be the contribution from this facility going? Fix it.
Operator
Ladies and gentlemen, the management line has dropped. Request you kindly stay connected where we rejoin the management. Sa. Sam. Ladies and gentlemen, we have the management line reconnected, so you may go ahead.
Sandeep Jain
Sir.
Unidentified Participant
Yes, Praveen, we are back. Yeah.
Sandeep Jain
Okay, so my last question was on the injectable specialty. So the new one, what was the utilization exit which we had and what would be the contribution from this specific coin it
Sahil Maheshwari
For the newer facility or overall injectables
Sandeep Jain
New facility?
Sahil Maheshwari
Newer facility. We are still ramping up. The utilization is in early teens and we expect that this year we will have significant ramp up in the injectable facility.
Sandeep Jain
Okay, sir, thank you for answering all my questions. That’s it from myself.
Operator
Thank you. We have the next question line of Ankur Kumar from Alpha Capital. Please go ahead.
Unidentified Participant
Hello sir. Thank you for taking my question. I wanted to understand in terms of cdmo, what kind of overall revenue growth are we Expecting this year because you said API prices have improved which will be a pass through but they are still lower than last year. And volume growth you said we will expecting double digits overall. What kind of revenue numbers margins are we expecting?
Sahil Maheshwari
So as I said we have visibility for 45 to 60 days of our of our revenue book, right? So what we said is in Q1 Q2 as we can see we can we expect a double digit volume growth, right. So while H2 still has to be seen through the pricing as I also mentioned in my last, are transiently high, whether they stay at the current levels, go down, go further up, we still have to see as we go along. But this is what we can say for H1 and as we talk through in the next quarter we can give more flavor on the SKU3 and Q4
Unidentified Participant
And any color on the margins itself we have seen improvement in Q4. So what kind of numbers can we expect
Sahil Maheshwari
Similar margin profile what we currently have?
Unidentified Participant
Got it sir. And sir, on API side you said you expect this year to be much better in terms of reduction in losses. So can we expect it to EBITDA losses to reduce to trade generic levels or how should we think?
Sahil Maheshwari
So we while the losses will be sizably reduced is what we expect. We’ll have to wait for at least couple of quarters to think through whether we can turn monthly EBITDA positive or not that the goal and aspiration on a full year basis we might still see some losses.
Unidentified Participant
Got it sir. And sir, tax rate you said 29%. So when do we expect to go to 25% type as a normal range?
Sumeet Sood
See, I think the way we look at it is when some of our entities continue to make losses, right? If the API business was to turn around and the trade generic business was to turn around, we would be coming at the tax rate that you’re saying. Let’s say we have 100 rupees profit and we were to pay a 25% tax over there. But that 25, if it’s taken as a delta to an 80 because of the losses, you’ll see a higher percentage. So I think the way the taxes should come down is once most of our businesses come down at the normal rate and while this number is looking also differential because of the deferred tax asset, I think to answer your question broadly is the way I said that once all most of the businesses are, you know, pad positive, we’ll come at the normal rate.
Unidentified Participant
Got it sir. So the last question would be we have good cash increase, we have Good cash flow from operations also. So what is our plan? We gave only 18 dividend payout this year. So what is our plan on the cash usage?
Sahil Maheshwari
So primarily given it, we are extensively a growth focused organization. The primary usage of the cash still remains in assessing organic or inorganic opportunities for growth. Dividend also was a way to reward the shareholders. So we expect that we’ll soon utilize some parts of the cash for growth. We are already in process of expanding our oral solid facilities. Since you have seen we have had almost 20% plus volume growth over two quarters. The quarter also looks good. And hence we see that we now would need to ramp up our oral solids facility as well.
So we are in process of ramping up. So that’s where some parts of the capex of this year will go. And also we are actively evaluating our objectives around niche businesses if we can acquire inorganically. Right. So this is where we expect the cash utilization to happen.
Unidentified Participant
Sure, sir. Thank you and all those.
Operator
Thank you. We have an excision line of Rohit Birani from Narendri Investments. Please go ahead. Sorry from Widget Global. Please go ahead.
Sandeep Jain
Yes, thank you for giving me the opportunity. My question is related to the execution of lease deed which we have done for land in G2. I wanted to know the purpose of this execution and expansion plans from this land in future.
Sahil Maheshwari
So simply, if you really look at the history of Kualinpur at Haridwar, we have gradually expanded our operations there by acquiring nearby land sites and so on. Right. This is how we have grown historically across Haridwar. Right. So this is simply one of those activities we will need for expansion of our capacities as well as building utility supports and so on.
Sandeep Jain
Okay, understood. And my second question is related to the European contract of €200 million. How much of this is expected from the first year? Will it be a €40 million commitment every year? Or there is some clause of, you know, initially the amount being lower and gradually the execution going up year on year.
Sahil Maheshwari
So this is an established brand already marketed with predictable volumes being sold in the European market. Right. So this is not a new launch to your question. So how we look at it, once we start the launch, whichever month or quarter it is, once we start, we will have almost 35 million euro on a Mac basis.
Sandeep Jain
Okay. Okay. So initially it will be 35 million and thereafter 35. Broadly.
Sahil Maheshwari
Broadly, this is how it is. 35 for the next six years till 2032.
Sandeep Jain
Okay. Okay, understood. Thank you so much.
Operator
Thank you. We have the next question from the line of Archer Maheshwari from Narezhari Investments. Please go ahead.
Unidentified Participant
Yeah. Hi, I had just one question. On international branded business side. The revenues have seen a sharp decline but the margins have improved to 28%. Is there a reason for that?
Sahil Maheshwari
So certainly. So what we are focusing on is a more we are investing into marketing while the business is small. Which honestly was not one of the best years for the exports business. And we are hopeful this business will be shaped well this year. Margin expansion has come from two reasons. One is we are focusing on marketing of brands rather than just pure B2B play. It is more B2B2C wherein we are doing a marketing. So seven, eight countries, we have our own field force, extensive field. We have over 10 countries where we have our country managers.
Right. So that’s there. Also we got some benefits of the us so since it’s USD we some got got some benefits from the Forex gain.
Unidentified Participant
Right.
Sahil Maheshwari
Which resulted in the gross margins to be up by over three and a half, 4%.
Unidentified Participant
Right. Right. Thank you. And just one more thing sir. The domestic business does not seem to be doing well. How do we ensure that the domestic business, you know, delivers at par with ICM over the next few years?
Sahil Maheshwari
So this year if you really seen through, we hardly took a price hike. Right. So what we thought through was more cautious approach on price growth while the focus was on volume growth. Right. So in the future what we think through is this year we expect we should grow in line with the IPM where the volume growth, the price growth and the NI growth will all play a part. And we expect to be double digit top line growth in the domestic formulation business.
Unidentified Participant
Right. Thank you. Those are my questions. All the best.
Operator
Thank you. We have our next question from the line of Avnish Tiwari from Vikarya. Please go ahead.
Unidentified Participant
Hi, can you just repeat that in the serial business you get a markup on bill of material. So when the APA prices are going down, what does it do to your absolute amount of profits you make or percentage margins you report. And relatively when API price are going up then we experience a reverse of that phenomena.
Sahil Maheshwari
Yes, you answered it correctly. These are percent margins and hence if the input materials go down, the absolute margins also go down.
Unidentified Participant
Absolute profits go down. Okay. And the second question I have in the trade genetics side, you are a manufacturer of these drugs then why are you not making money? What’s wrong with this industry structure that you should be the lowest cost producer of these drugs and directly selling to pharmacists distributors. So what is it that this segment is having an issue in industry structure.
Sahil Maheshwari
So this is honestly a question of how and where we deploy our capital trade Gen ZX historically has been an area where you have elongated working capital cycles across inventory and receivables. Right. And hence we thought through at one point in time, four, five years back 22, we did almost 400 plus crores in our trade gender business. Right. We scaled down simply because it had elongated working capital cycles and the margin profile was not what we expected these to return and hence it’s a conscious call of capital reallocation.
Unidentified Participant
Okay, thank you.
Operator
Thank you. We have an exclusion line of DIA from Sapphire Capital. Please go ahead. Yes, we can hear you.
Unidentified Participant
So what was the capex for FY26 and how much are we going to spend in this year?
Sumeet Sood
So FY26 we did a capex of 222 crores and this year we are targeting to keep our CapEx 2 or 300 crores. That’s the target for our CapEx.
Unidentified Participant
All right, sir. And any top line targets for the whole year FY27.
Sumeet Sood
No, ma’, am, we, we do not want to answer this question. We don’t want to state future numbers. Thank you.
Unidentified Participant
Thank you.
Operator
Thank you. We have the next question line of Avnish Berman from Varkaria. Please go ahead.
Sandeep Jain
Yeah, hi, good afternoon. Thanks for taking my question. A couple of questions. When we had a phase of API declines in the last year it was kind of led by CEPA Crisis. And now when you please correct that understanding if it’s wrong. And now when you say that sequentially there has been a little bit of bounce back, is it fair to assume that the bounce back is also led by FIFA API pricing?
Sahil Maheshwari
So that. So in the API business or the CDMO business? The CDMO business you’re talking about.
Sandeep Jain
Yes, but I want a view on the FIFA API pricing.
Sahil Maheshwari
Sure. So the, if you see and analyze the data, not the SIFA, but most of the APIs over the last year have gone down as simple as paracetamol went down, metformin went down inte infectives went down. So all of those went down. Rightly. The ones which suffered a significant decline in prices are the ones which picked up in this April postwar. So those numbers still have to come out because these are the numbers we’re talking about till March and likely we’ll have received order in February. Right.
So till the time the impact on API prices was not seen. Talking about Q1 across most of the APIs, whether it is syphilis, foreign, non syphilis, foreign chronic APIs and so on, whether imported domestically sourced. We have seen that the API prices as a basket have started to go up.
Sandeep Jain
Okay, and just to clarify, I think this question was asked earlier. When the API prices are going up, then your absolute gross profit growth is higher than the volume growth. Is that a fair understanding
Sahil Maheshwari
Since the margins are linked to a percent? Rightly so. Right. So factory operates as a at a non formula linked fixed expenses. Right. The labor, the unit manpower and so on. So one, since the percent is on the gross input cost as and when it fluctuates, it fluctuates my absolute margins.
Sandeep Jain
Okay. The last question was on the volume growth, of course. I mean last couple of quarters have seen such a strong volume growth for a very large player like yourself. And you mentioned that it’s coming from existing customers which means that you are gaining wallet share from your existing customers. So I just wanted a little more color on how is that happening? I mean are you gaining from let’s say a little bit of the unorganized or less organized sector or are you gaining from other competitor which are already compliant with schedule N?
And if yes, then why is that happening?
Sahil Maheshwari
So this is broad based. I think there’s some volume share gain from their in house production. There is some volume gain share from what they used to manufacture it from other CDMOs. Right. So while we have not done that analysis of what percent comes where, but this will also meaningfully change every month, on month, on quarter, quarter. But what we are seeing is either new brands from in house or other CDMOs or existing brands which are sold more, which we already had are sold more into the channel and hence we get a better order book for it.
So all of it is contributing. So since as you rightly said on a large base such large volume growth, so most of the parameters will have to play out for this to sustain this.
Sandeep Jain
Okay, thanks. This was helpful. Thanks.
Operator
Thank you. We have the next question line of Saket Kapoor from Kapoor and company. Please go ahead.
Sandeep Jain
Yes. Sir, I’m new to this company in the sector so pardon me for my question. Sir, if we take our mix of revenues and as alluded by you that we have pressure on the API segment and that getting negated with the current year. So if you could just give us some more understanding with the
Abdulkader Puranwala
Type of commissioning of order especially for the I think Zambia nation which you mentioned, how should the current year probably shifting up in terms of the different vertical? Sir, I guess a good summary of the same.
Sahil Maheshwari
So CDMO we have talked about Extensively. Right. At least for the H1 we see strong volume growth and the API prices I think should remain at current levels. So that’s how we look at the CDMO segment. The domestic marketing we talked about we should be targeting an IPM level low single digit, a high single digit, low double digit kind of growth in the domestic accumentis for exports as well. While the last year was flat, this year we expect to do a double digit growth in that segment as well. And the margins should sustain, the margin profile should sustain.
On the trade gen ZX we have already done positive as we said this will not meaningfully contribute to our top line and bottom line growth forward and should not drain our P and L going ahead on the API segment While we had a -40 crore consistently for the last three years every year on our P and L this year we expect the losses to come down sharply. We expect that while the full year would still remain negative, this will be sizably lower and would have a significantly lower drag on us pnl. So this is how the five business verticals will shape up.
Apart from this, as you rightly said, one more element is on Zambia. Zambia will flow in into our CDMO revenues. So this will be as we said a $25 million which at today’s rate will be 230 odd crores addition to our top line which we expect to deliver in Q2 Q3 sequentially as we roll out the orders and get confirmed purchase orders. And this will be slightly at a margin similar to CDMO business. Right. So this is how the overall year is somewhat we are thinking through the European CDMO contract will kick in from the next fiscal.
Abdulkader Puranwala
Then with the Jambia order is it a multi year contract that will be executing or a one time exercise?
Sahil Maheshwari
So this is for two years, $25 million each. FY27, FY28 in parallel we have to commission the facility whether it takes two years, two and a half years. This is our internal target. Right. So FY29 is something somewhere we believe calendar year 29 we will start the revenues from the Zambian facility which will gradually scale up in which we have a 51% equity share.
Sandeep Jain
Okay, so this is different than the order which we are executing of $25 million for the current year. I could not get it.
Sahil Maheshwari
So the initial two years will seize. These supplies from the Indian facilities will cease
Sandeep Jain
After
Sahil Maheshwari
FY28. And once in FY29 or FY30 we have the plant cleared for commercial production. We will start ramping up the accessibility from and supply to Zambian government, local Zambian private market or neighboring nations from that facility. Zambia today is largely a 200 million dollar pharma market and we expect to gain a sizable share within that market where the government itself procures over 80% of the products which are largely imported.
Sandeep Jain
And what is the total investment that we have in the facility in the Gambian nation
Sahil Maheshwari
Across building, across products, tech transfer facilities, machine land, everything tangible, intangible. This is a $45 million which will be born 51% by us.
Abdulkader Puranwala
Right, thank you sir. I joined the queue and all the best to the team.
Sahil Maheshwari
Thank you.
Operator
Thank you. We have the next line of Richa from Equity Master. Please go ahead.
Unidentified Participant
Thank you for the opportunity. Am I audible?
Operator
Yes, we can hear you.
Unidentified Participant
Yeah. So my question is on the European contract for which you have already received an advance. From what I understand it’s not based on, you know, cost plus basis, but it’s a lump sum contract. So could you just give some insight on, you know, how the margins could play out in case. In case there’s an inflationary environment in the raw material site.
Sahil Maheshwari
So. Right, Richard, So this is while we were finalizing the contract. So this is an established product, established molecule over last few decades now. So we have already taken into our costing the inflationary patterns of that API and the input materials. Right. So as at the current API prices, we are fairly confident this remains our comfort zone, zone of the margins we are thinking through. And you’re right, this is a fixed price contract till 2032.
Unidentified Participant
So at current API prices, the margins that you expect are more or less in line with the current CDMO or is it expected to be higher?
Sahil Maheshwari
It should be similar or high teens. So this is what we expect.
Unidentified Participant
Okay. And apart from this European contract, what kind of international mix do you expect within the CDMO itself? Let’s say two to three years from now.
Sahil Maheshwari
Right. So similar efforts are being driven across oral solids injectables, across niche products like hormones and anti infectives. Right. So we expect that over the next two, three years we will have eight to 10 global customers for whom we speak will serve, whether large or small. That has still to be played out. But we expect within CDMO we should have eight to 10 customers which could be Indian players or European global players as well, for whom we’ll do CDMO services.
Unidentified Participant
Okay. Okay, thank you so much.
Operator
Thank you. We have the next question on the line of Abdul, please go ahead.
Abdulkader Puranwala
Yeah, hi. I hope I’m audible. So thank you for the opportunity. So first Question, you know, just to follow up on the previous participants so about you know, having a CDMO relation with 8 to 10 overseas customers. So I mean sail, if you can talk about, you know, what stage we are into in terms of discussion and you know, what kind of an investment we will have to do to bring or you know, take that relationship ahead with those customers.
Sahil Maheshwari
So but as Abdul, these are long term contracts, right. And require sizable time investment as well. So as I heard you read Abdul, so you’re talking future CDMO export customers, right?
Abdulkader Puranwala
Yes, yes.
Sahil Maheshwari
So these are, these require sizable investment in time, dossier clearances and so on. Right. So require two, three years till we ramp them up. So keep in terms of manufacturing capabilities, we are largely through. So we are only taking our, those facilities which we have already constructed so we are not thinking to a new facility, a new doses form and then take it up to the global levels. We already have a new injectable facility. We already have a hormone facility in continuation with the existing approvals.
Right. So that is there. So our pitch remains similar. An Indian manufacturer with capabilities across R and D, regulatory quality, a track record of serving MNCs for over a decade now with cost conscious, quality conscious manufacturing. Right. So the pitch remains similar and this is how we proceed. It could be a cross tech transfer from their existing manufacturing site or a complete completely new development which in most of the cases we are helping our partners in our R D centers only.
Abdulkader Puranwala
Got it, got it. And one more if I may. So on the GLP front, you know, we have seen a good amount of traction getting developed with the generic pharma companies. So are we also supplying GLP drugs either in an injectable or an oral solid dosage form to our customers?
Sahil Maheshwari
So obviously we all recognize and acknowledge GLP is a large and a massive opportunity. As of now we are still evaluating when to enter at which states to enter. Given if you also have read some news last week when we have been witnessing in the industry itself, the pricing still remains very volatile and going down south. Right. So since we first have to think through who will our EPA partners be, who what is the right stage of investment into any dosage form if required. So we’ll enter the GLP market.
We’ll inform in our subsequent calls what is our strategy going forward.
Abdulkader Puranwala
All right, got it. Thank you.
Operator
Thank you. We have the next question line of Sijal Kapoor from Antifragile Thinking. Please go ahead.
Unidentified Participant
Thank you.
Operator
Hello. Yes, please go ahead with the question. Yes,
Unidentified Participant
Hi. Thank you. Thank you for the follow up. So just a quick one really. And given the net cash on the balance sheet we have and the sustainable operating cash flow, there must have been many options on the table in terms of should we do X or Y in terms of both domestic and international expansion. Can you just help me out with one or two areas which the team evaluated and decided not to pursue despite a strong cash position. Thank you.
Sahil Maheshwari
Sure. So if I talk about inorganic growth for safe. So there are some dosage forms we still don’t have. For example meter dose inhalers we don’t have. For example, we still don’t have oncology injectables. Right. And few other dosage forms in small molecules within the large spaces we are still not present into the large molecules. Right. So these are few opportunities we evaluated and obviously we have to be cognizant of also the investment and the return expectation. Right. So at times it does not match up to our expected valuations or it does not match up to the plant standards or the product standards we wish for.
Hence these are the areas where some of the conversations drop. Also on organic front, we were also contemplating long back on the expansion of our oral solids which I recently mentioned. We are kicking off now. So these are the decisions that you take as the business and the volumes progresses, which are the areas where we can invest similarly. For example, in the acumente space as well, we can have options of brand or a portfolio acquisitions as well. But the current valuations in the market for branded player significantly higher than what we currently trade at.
Right. So all of those decisions come into play and we and the team have been consciously evaluating a lot of opportunities and hopefully we should deploy some capital in the near future.
Unidentified Participant
Very helpful. Thank you. That’s all I had. Thank you so much.
Operator
Thank you. We have the next question from the line of nitesh from Christ Capital. Please go ahead.
Unidentified Participant
Hi, thank you for taking the question. Just with respect to our international CDMO contracts, when I’m looking at FY28, so we will have around 70 million of revenue, right. From Zambia and the EU contract which is around 680 crores of top line. So you know, is this the right way to say that, you know, export CDMO will be around 15 percent of 15 percent share in our CDMO revenues in FY28
Sahil Maheshwari
Simply on the Excel looks a good number. Yes. So this is how we think through that next year we should, once we start, right. As I said, on a mad basis the European contract will give us 35 million euros and the Zambia ones are FY driven. Right. So we’ll have FY $25 million this time in 28 and FY 27 and 28 each.
Unidentified Participant
So just to follow up, you know, these, you know, these contracts will effectively have assuming will have better margin just because of, you know, favorable FX movements. So do we see a CDMO margin which has been in the 13 to 14% level, improve to a 15, 16% level?
Sahil Maheshwari
We can think through that. The base margins for the business once both of these contracts are in full swing, will improve. Okay, thank
Unidentified Participant
You.
Operator
Thank you, ladies and gentlemen. That was the last question. I would now like to hand the conference over to Ankit Jain for any closing comments.
Ankit Jain
Thank you everyone for attending the Q4 and FY26 earning. Call for ACAMS. If you have any remaining questions. You can reach out to the investor relations team. Thank you and have a good day.
Sandeep Jain
Thank you. Namaskaran.
Operator
Thank you. On bfo, Occam’s Drugs and Pharmaceuticals. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.