VIYASH

Viyash Scientific Limited reported robust Q3 FY26 results, with revenue from operations growing 10.9% year-on-year to INR 858 crores. Adjusted EBITDA surged 64.4% year-over-year to INR 180 crores, leading to a significant EBITDA margin expansion of 700 basis points, reaching 21.6%. This strong performance was broad-based across all segments and geographies, reflecting successful integration post-merger.

For the nine months ended December 31, 2025, the company's total revenue climbed 11.9% to INR 2,500 crores. Adjusted EBITDA for this period jumped 58% to INR 500 crores, with overall margins improving 580 basis points to 20.1%. Profit Before Tax increased 3.5x from INR 49.8 crores to INR 220 crores, and Profit After Tax more than tripled to INR 150 crores, demonstrating strong operational leverage.

Management highlighted companion animals as a top growth segment for FY27, citing low generic penetration (15-16% vs. human health) and expansion opportunities in the USA, Europe, and India. The CDMO business is also a key focus, with current FY revenue projected at INR 70-90 crores. Significant growth is anticipated from CDMO next year, though full commercialization of new products is expected to take 3-4 years.

The company has largely completed legal and statutory actions for the merger, with R&D fully integrated for both Animal Health and human health. Four new Animal Health products have been validated, and cost improvement projects are underway. Network synergies of INR 50-60 crores are being tracked over the next 12-18 months, contributing to margin improvement and operational efficiency.

While Q3 FY26 API revenue growth was a modest 2.9% to INR 360 crores due to timing issues with CDMO contracts, management expects 'very fast growth' in Animal Health APIs next year. The company aims to maintain its 55% formulation and 45% API revenue mix, with CDMO growth compensating for regular API segments. The SeQuent API business is projected to cross INR 400 crores for the first time since 2022.

Viyash Scientific Limited has strengthened its balance sheet, with net debt-to-EBITDA reduced to less than 4x and current debt around INR 200 crores. The company expects to generate significant free cash flow next year, which will fund organic investments and selective acquisitions. Management is confident in achieving INR 4,000 crore revenue and INR 800 crore EBITDA by FY27, emphasizing sustainable growth and strategic leverage.

The company successfully completed the divestment of its Mangalore site on December 31st, a move expected to save at least $1 million next year by moving all activities internally. Additionally, Viyash received approval for an Albendazole product in Europe within 30 days, showcasing strong regulatory capabilities and contributing to significant volume growth for the product.

Regarding a ban on certain antibiotics/antiprotozoals in India for livestock, management clarified that it was specific to 1-2 products, had a very small impact on the company, and they are well-covered due to their focus on injectable formats and continuous new product launches. This demonstrates the company's ability to adapt to regulatory changes with minimal disruption.