The invention discloses a dermaceutical cream containing steroids and an antibacterial agent in the form of Fusidic acid, which Fusidic acid is formed in situ from Sodium Fusidate as the starting raw material, wherein Sodium Fusidate is converted into Fusidic acid under oxygen-free environment. The cream of the present invention has greater shelf-life stability and the finer particle size of the API than the conventional creams containing Fusidic acid. The cream of the present invention contains Fusidic acid as the API that has been formed in situ from Sodium Fusidate, and steroids in a cream base comprising an acid, a co-solvent, an emulsifier and a waxy material along with water, preferably purified water.
