Summary
Vimta Labs Limited - Q3 FY 2025-26 Earnings Call Summary Wednesday, January 28, 2026, 4:00 PM IST
Event Participants
Executives 4 Harita Vasireddi (Managing Director), Satya Sreenivas Neerukonda (Executive Director), Siva Rama Krishna Kambhampati (CFO), Sujani Vasireddi (Company Secretary)
Analysts 5 Aditya Chheda (InCred Asset Management), Diksha (SP), Disha (Sapphire Capital), Preet Jain (Niveshaay Investment Advisors), Tanay Malpani (Individual Investor)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income | ₹100.5 crores | +10.2% YoY, -3.9% QoQ; Growth driven by Pharma and Food services. |
| EBITDA | ₹34.4 crores | +0.4% YoY; Margins at 34.3% impacted by onetime labor law costs. |
| PAT | ₹17.6 crores | +0.4% YoY; PAT margin at 17.5%. |
| 9M FY26 Revenue | ₹304.3 crores | +20.7% YoY; Reflects strong performance in H1. |
| 9M FY26 EBITDA | ₹106.8 crores | +16.7% YoY; Margins at 35.1%. |
| EPS (Basic) | ₹3.96 | Q3 figure; 9M FY26 EPS stands at ₹12.7. |
| Net Debt | ₹0.00 | Management confirmed the company remains net debt-free. |
| Export Revenue | 39% of Total | Up from H1; ~60% of export revenue is derived from the U.S. market. |
Geographic & Segment Commentary
- Pharmaceutical Services: Remains the largest revenue contributor. Q3 saw a lag in clinical research order bookings and unexpected operational delays in analytical services due to facility restructuring, deferring some revenue to Q4.
- Food Testing: Experienced good momentum with seasonal tailwinds expected in Q4, which historically is the strongest quarter. Growth is supported by continuous expansion of NABL certification scope and evolving regulatory norms.
- Electrical & Electronics (E&E): Revenue remained steady with capacity doubling this year. The second EMI/EMC chamber in Hyderabad is now qualified, with the first running at 80-85% utilization; growth strategy involves opening more local labs to serve OEMs.
- Biologics (CRDMO): Facility setup and equipment procurement are on track for Q1 FY27 commercialization. Initial focus is on building reputation with pilot projects (up to 50 liters) before scaling further.
Company-Specific & Strategic Commentary
- Digital Transformation: Implementing an in-house digital transformation roadmap (started 5 years ago) to build AI components into lab processes and neutralize rising manpower/reagent costs.
- Capacity Expansion: Significant infrastructure investments made in the Shamirpet Genome Valley facility to accommodate analytical service expansion and the new biologics division.
- Clinical Research Shift: Transitioning from Bioequivalence (BE) studies to larger Phase II clinical trials; Phase III trial capabilities are being explored but impact on top line is currently minimal.
- Inorganic Growth: Management acknowledged that while no immediate targets are on the cards, inorganic moves are considered part of the long-term growth principle.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Target | ₹500 crores (FY27) | Confident in reaching the long-term target set 5-6 years ago despite Q3 lag. |
| Q4 FY26 Performance | Higher than Q3 | Historically H2 is stronger than H1; seasonal tailwinds in Food and clearance of Pharma backlog expected. |
| EBITDA Margins | +/- 1-2% from 35% | Confidence in maintaining healthy margins through operational efficiencies despite high talent attrition. |
| Biologics Launch | Q1 FY27 | First projects expected in FY27; will serve as the “maiden year” for this vertical. |
Risks & Constraints
| Risk | Context |
|---|---|
| Operational Delays | Facility restructuring and dependency on external vendors for modifications caused unexpected productivity drops in Q3. |
| Manpower Attrition | Industry-wide high attrition remains a norm; Vimta is focusing on retaining “key and critical” scientific talent to sustain growth. |
| Cost Escalation | Continuous price increases in chemicals, reagents, standards, and post-COVID manpower costs are impacting gross margins. |
| Geographical Bias | In E&E testing, logistics constraints prevent customers (e.g., EV/Drone makers) from traveling long distances, requiring localized lab investments. |
Q&A Highlights
Revenue Trajectory
- Question: Is the FY26 revenue target of ₹500 crores still intact given the 9M results? (Preet Jain)
- Answer: While we may not touch the required run rate of ₹125cr/quarter immediately in Q4, we will not be disappointed with the year-end landing. The FY27 target of ₹500 crores remains firm. (Harita Vasireddi)
Operational Challenges
- Question: What specifically caused the operational challenges mentioned in the commentary? (Disha)
- Answer: We are restructuring facilities to expand analytical labs, causing dependency on external sources and unexpected delays that impacted team productivity. (Harita Vasireddi)
Biologics Strategy
- Question: What is the potential scale of the biologics division? (Vishal Manchanda)
- Answer: We are starting with formulation and process development up to 50-liter scale. Project sizes vary significantly based on whether we handle troubleshooting or full process development from clone to pilot. (Satya Neerukonda)
Capital Allocation & ROCE
- Question: Why has capex increased to ₹70cr+ while ROCE has dipped? (Santosh Keshri)
- Answer: Higher capex is due to the new biologics facility and infrastructure expansion. ROCE dip is temporary as these assets are yet to generate revenue; it will return to regular levels (above 20%) soon. (Siva Rama Krishna)
Key Takeaway
Vimta Labs reported a steady Q3 FY26 with 10.2% YoY revenue growth to ₹100.5 crores, although sequential performance was hampered by facility restructuring and clinical order lags. The company maintains a robust financial profile with EBITDA margins at 34.3% and a net debt-free balance sheet. Strategically, Vimta is successfully diversifying beyond traditional pharma testing into Electronics (doubling capacity) and Biologics, with the latter set for commercialization in Q1 FY27. Despite macro pressures like high manpower attrition and rising reagent costs, management is leveraging a five-year digital transformation initiative to sustain 35% EBITDA margins. With 9M FY26 revenue at ₹304.3 crores and strong seasonal tailwinds in Food testing, the company remains on track for its long-term growth targets while transitioning into a high-value CRDMO player. Commercialization of the Biologics wing remains the primary watch-point for FY27.
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