Summary
Viyash Scientific Limited - Q3 FY2026 Earnings Call Summary Friday, February 06, 2026, 4:00 PM IST
Event Participants
Executives 4 Dr. Hari Babu (MD & Group CEO), Rajaram Narayanan (ED & CEO Animal Health), Ramakant Singani (CFO), Ms. Zarna (Investor Relations)
Analysts 5 Aditya (Sowilo Investment Managers), Bharat Sheth (Quest Investment Advisors), Ishika (Individual Investor), Kaustav (BMSPL Capital), Krisha (Individual Investor), Sahil Sanghvi (Monarch Networth Capital), Sajal Kapoor (Antifragile Thinking)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹858 crores | +11% YoY; Reflects broad-based participation across segments and geographies. |
| Adjusted EBITDA | ₹185 crores | +64.4% YoY; Significant growth driven by operational efficiencies and vertical integration. |
| Adjusted EBITDA Margin | 21.6% | +390 bps YoY; Sustainable shift to 20%+ levels due to product mix optimization. |
| Profit After Tax (PAT) | ₹48.5 crores | After one-time merger costs (₹41.3 cr) and tax regime change (₹7.7 cr). |
| Net Debt-to-EBITDA | < 4.0x | Reduced from previous year; Significant strengthening of the balance sheet. |
| Formulations Revenue | ₹480 crores | +20% YoY; Strong performance in Animal Health across Europe, Brazil, and India. |
| API Revenue | ₹360 crores | +2.9% YoY; Growth tempered by timing of CDMO contracts; SeQuent API base now stabilized at ₹100cr/quarter. |
| Gross Margin | 54.5% | +316 bps YoY; Driven by backward integration and shift toward high-value regulated markets. |
Geographic & Segment Commentary
- Animal Health (Formulations): Strong foundation in Europe (Spain/Turkey) with direct field force expansion in Benelux and Sweden. Focus remains on companion animals and leveraging the Boehringer Ingelheim partnership in India.
- Emerging Markets: Turkey and Brazil showed robust performance; Turkey facility is now EU-GMP approved, facilitating exports to Europe. Brazil is becoming a hub for expansion into Mexico and Southeast Asia.
- Human Health (Formulations): Strategic shift moving mature products to low-cost Indian manufacturing. Developing complex, high-value products in US/India to differentiate from generic competition.
- API & CDMO: Animal Health API business reached ₹400 crores annually for the first time since 2022. CDMO segment generated ₹70-90 crores this year, with significant growth expected as validation projects commercialize by 2030.
Company-Specific & Strategic Commentary
- Merger Integration: Legal and statutory actions for the SeQuent-Viyash merger are complete. Full R&D integration achieved with 200+ scientists and 20+ doctorates; four new Animal Health products validated post-merger.
- Vertical Integration: 45% of high-volume US products are now backward integrated to improve cost-competitiveness. New production line for Albendazole in India received EU approval in 30 days.
- Companion Animal Pivot: Identifying this as the fastest-growing sector; US market has ~18.6 crore pets whereas generic penetration is only 15-16% globally.
- Network Optimization: Divested Mangalore testing site (closed Dec 31) to internalize activities, expected to save $1 million annually in FY27.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA Margin | 20% sustainable | Management confident in maintaining 20%+ base due to segment diversification and synergy capture. |
| FY28 Target | ₹4,000 cr Revenue | Company aims to hit current run-rate adjusted targets by FY27-28 through 15-20% organic CAGR and M&A. |
| Synergy Capture | ₹50-60 crores | Expected over 12-18 months from network optimization and corporate shared services. |
| API Growth | Double-digit | FY27 projected as the first year of double-digit growth for Animal Health API in several years. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory Approvals | Synergy capture and cross-selling depend on regulatory timelines (18-24 months) for site transfers and product filings. |
| US Market Supply Chain | Management is still “studying” the complex US Animal Health supply chain before committing to large-scale organic expansion. |
| ESOP Costs | New ESOP schemes approved by the board will impact reported PAT over the next 1-2 years. |
Q&A Highlights
Integration & Synergies
- Question: Are synergies fully captured and is the 20% margin sustainable? (Krisha)
- Answer: 20% margin is 100% sustainable due to segment diversification. Operational synergies (₹50-60cr) have not yet fully kicked in and will reflect in FY27 (Dr. Hari Babu).
CDMO Strategy
- Question: What is the current size and focus of CDMO? (Sahil Sanghvi / Sajal Kapoor)
- Answer: Current revenue is ₹70-90 crores. Focus is on “Life Cycle Management” for innovators, leveraging EHS and quality speed. Full commercialization of recent validations expected in 3-4 years (Dr. Hari Babu).
Companion Animals
- Question: Why the focus on companion animals? (Sajal Kapoor)
- Answer: Genericization is only 15% vs 90% in human health. Largest portfolio of companion animal APIs (60% coverage) belongs to Viyash, providing a massive genericization runway (Dr. Hari Babu).
Financial One-offs
- Question: Explain the ₹48-49 crore exceptional charges. (Krisha)
- Answer: Includes ₹29 crores stamp duty, ₹11-12 crores advisor/success fees, and ₹7.7 crores MAT credit reversal. These are strictly one-time (Dr. Hari Babu / Ramakant Singani).
Key Takeaway
Viyash Scientific delivered a milestone Q3 FY26, reporting the first combined results of the SeQuent-Viyash merger with revenues of ₹858 crores (+11% YoY) and a sharp margin expansion to 21.6%. The company successfully integrated its R&D and manufacturing networks, validated four new products, and divested non-core assets to realize $1 million in annual savings. Strategic focus is shifting toward the high-margin “Companion Animal” segment, supported by a new distribution deal with Boehringer Ingelheim and a dominant 60% share in relevant APIs. With net debt-to-EBITDA falling below 4x and a stabilized API base of ₹100 crore per quarter, management is pivoting toward aggressive organic and inorganic growth. Viyash remains confident in its ₹4,000 crore revenue target, underpinned by a 20% sustainable EBITDA floor and accelerating CDMO opportunities.
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