Vimta Labs

Vimta Labs reported a Q3 FY26 revenue of INR 100.5 crores, marking a 10.2% year-on-year growth, primarily driven by pharmaceutical and food testing services. Despite this, the quarter saw a 3.9% sequential decline in revenue. EBITDA stood at INR 34.4 crores with a 34.3% margin, and PAT was INR 17.6 crores, both showing a marginal 0.4% YoY growth. Basic EPS for the quarter was INR 3.96.

For the nine months ended December 31, 2025, total income reached INR 304.3 crores, a robust 20.7% increase year-on-year compared to INR 252.1 crores in the previous year. EBITDA for this period was INR 106.8 crores, up 16.7% YoY, with a margin of 35.1%. Net profit after tax for the nine months grew by 16.4% to INR 56.4 crores, resulting in an EPS of INR 12.7.

The company's biologics contract research and development services are progressing as planned, with equipment procurement and facility setup on track for commercialization by Q1 FY27. Management is confident in this timeline but remains cautious about providing specific revenue projections for this new vertical in its early stages, emphasizing building reputation with initial projects.

Q3 FY26 experienced a lag in booking clinical research orders and unexpected operational challenges in analytical services. These issues stemmed from restructuring within facilities to accommodate expansion and dependencies on external sources for modifications, leading to some revenues being deferred to subsequent quarters. Management expects Q4 to be much better, aligning with the typical H2 strength.

The Electricals & Electronics division maintained steady revenues, with a focus on market penetration. The installation of a second EMI/EMC testing chamber in the life sciences facility is well on track, complementing the existing chamber which runs at 80-85% utilization. The company has already doubled its capacity in this segment this year, addressing a gap in the Hyderabad region's defense sector.

Export revenue showed an increase in Q3 FY26, contributing approximately 39% to the total income, an improvement over the first half of the year. Of this export revenue, about 60% is derived from the US market, indicating a significant international presence and strong performance in overseas markets.

Vimta Labs maintains a net debt-free balance sheet. While capex has been increasing over the past few years due to infrastructure expansion and new service forays like biologics, the company typically invests an amount equivalent to its previous year's depreciation. The Return on Capital Employed (ROCE) saw a slight dip in the current financial year due to these investments but is expected to return to regular levels in the coming quarters^⏳.

Vimta Labs has been on a digital transformation path for five years, utilizing in-house teams and AI-embedded technologies to enhance efficiency and scale processes. Despite continuous escalation in input material costs (chemicals, reagents) and manpower costs, the company aims to maintain EBITDA margins within a plus/minus 1-2% range in the near term through these efficiency improvements.