Viyash Scientific Limited — Q3 FY26 earnings call

Call held 6 Feb 2026

Management summary

Viyash Scientific Limited reported strong Q3 FY26 results, with significant revenue and EBITDA growth driven by broad-based participation across segments and geographies. The company achieved substantial margin expansion and strengthened its balance sheet, despite one-time merger-related and tax expenses. Management expressed confidence in sustaining 20% EBITDA margins and outlined strategic growth drivers including companion animals and CDMO.

Highlights

  • Revenue from operations for Q3 FY26 was INR 858 crores, grown up by 10.9% year-on-year.

  • Adjusted EBITDA for Q3 FY26 was INR 180 crores, grown by 64.4% year-over-year, with margins expanding 700 basis points to 21.6%.

  • Net debt-to-EBITDA reduced to less than 4x, significantly strengthening versus the previous year.

  • For the nine months, revenue grew 11.9% to INR 2,500 crores, and Adjusted EBITDA jumped 58% to INR 500 crores, with margins at 20.1%.

  • The Mangalore site divestment was completed on December 31st, expected to save at least $1 million next year.

Concerns

  • One-time merger related expenses of INR 41.3 crores impacted Q3 FY26 profit before tax.

  • A one-time charge on account of MAT credit reversal of INR 7.7 crores also affected Q3 FY26 profit after tax.

  • API revenue for Q3 FY26 rose only 2.9% to INR 360 crores, attributed to a simple timing issue with CDMO contracts pushed to next quarter.

Key financials

2 periods

Q3 FY26

  • Total Revenue
    ₹858 Cr
    YoY +10.9%
  • Adjusted EBITDA
    ₹180 Cr
    YoY +64.4%
  • EBITDA Margin
    21.6%
  • PAT
    ₹48.5 Cr
    YoY +3.6%

9M FY26

  • Total Revenue
    ₹2,500 Cr
    YoY +11.9%
  • Adjusted EBITDA
    ₹500 Cr
    YoY +58%
  • EBITDA Margin
    20.1%
  • PAT
    ₹150 Cr
    YoY +212.5%

What they filed

Q1 FY27: revenue up 7.9%, net profit up 23.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue42 338 42 328 340 +710%342 +1%372 +786%354 +8%
EBITDA-2 58 -3 49 52 +2700%70 +21%63 +2200%47 −4%
Net profit4 51 4 17 23 +475%0 −100%36 +800%21 +24%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentRevenue (Q3 FY26)Revenue (9M FY26)
Formulations₹480 Cr₹1,360 Cr
API₹360 Cr₹1,100 Cr
CDMO——

Capital allocation

high confidence
  • Capex Capex disclosed
    We don't need much CAPEX for existing business whatever API. So, that can take care of some extent and also there will be something comes up warrants, it's going to come.
  • Debt 3.9× EBITDA
    • Repayment Started repaying a little bit high debt loan
    Net debt-to-EBITDA has reduced to less than 4x, a significant strengthening versus the previous year. [...] our current debt INR 200 odd crores is nothing actually for this Company.
  • Liquidity Liquidity disclosed Company expects to generate good free cash flow next year and is comfortable with its current debt position and cash generation for the next 12-18 months.
    We are going to generate good free cash flow next year, looking at our current debt INR 200 odd crores is nothing actually for this Company. [...] We don't do just to show topline numbers. So, we are very comfortable with this current debt position, free cash, whatever we are looking for cash generation next 12 months-18 months we can do a lot.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · Ongoing · High confidence 20%
    Yes, it's going to 100% sustain because now you see we have four segments. So, even if there is small issue in one segment, other segment is able to absorb those things. We are very confident to sustain these things. Earlier we indicated of course FY'27 we are going to achieve close to 20% but because of our initiatives last 3-4 quarters we are able to achieve now and we are very confident to maintain that 20%.

    — Dr. Hari Babu

  • EBITDA Profitability · FY27 · High confidence INR 800 crores
    when you reach to INR 4,000 crores-INR 800 crores odd crores EBITDA, however you can leverage actually data also, to do is there any good acquisition.

    — Dr. Hari Babu

Revenue

  • Revenue Revenue · FY27 · High confidence INR 4,000 crores
    So, when we say INR 185 crores this quarter, INR 187 crores last quarter, and also the topline is going to close to INR 900 crores, INR 860 odd crores or even if you take 15% growth we are pretty comfortable to reach that level, not even FY'28, in FY'27 that one, whatever. Of course, this pre-ESOP or all those things. But we are comfortable to achieve that. We are very confident to maintain the 20% EBITDA levels now.

    — Dr. Hari Babu

Growth

  • EBITDA Growth Growth · Long-term · High confidence 15%-20%
    we are confident and we are targeting minimum of 15%-20% EBITDA growth, that's what we look at.

    — Dr. Hari Babu

Synergies

  • Network Synergies Synergies · 12-18 months · High confidence INR 50-60 crores
    network synergies, that's one of the key thing. We also explained 50 crores-60 crores it takes 12 months-18 months, it's tracking very well, that 50 crores-60 crores, 18 months start from maybe now 3 months over another 15 months.

    — Dr. Hari Babu

Savings

  • Mangalore Divestment Savings Savings · Next year · High confidence 1 million dollars
    That's where we are going to save at least a million dollars in next year. That's one of the strategic initiative.

    — Dr. Hari Babu

CDMO

  • CDMO Revenue CDMO · Current FY · High confidence INR 70-90 crores
    this year we will end up doing 70 crores to 90 crores on CDMO.

    — Dr. Hari Babu

  • CDMO Growth CDMO · Next 3-4 years · Medium confidence Faster growth
    But that will go much faster of 3 years I can say. So, these things will take 3-4 years. [...] most of this growth will come from 2-3 years.

    — Dr. Hari Babu

API

  • Animal Health API Growth API · Next year · Medium confidence Very fast growth
    Animal Health APIs are going to grow very fast next year.

    — Dr. Hari Babu

What to watch in Q4 FY26

API Revenue Growth

Next quarter (Q4 FY26)
Current 2.9% YoY in Q3 FY26
Target Higher growth, recovery from timing issues

Why it matters

API is a core business segment, and its growth was temporarily impacted this quarter; recovery is key for overall performance.

API, one of the reason is a little bit timing issue. Last quarter we had a few CDMO contracts. Okay that's pushed to next quarter. This quarter it was less but it's a simple timing issue. But we are growing constantly on that.

Risks & concerns

  • One-time merger related expenses

    medium

    INR 41.3 crores in Q3 FY26 for merger execution, stamp duty, and advisor fees.

    Management acknowledged

  • One-time MAT credit reversal charge

    medium

    INR 7.7 crores in Q3 FY26 due to government tax regime change, with potential for positive impact next quarter.

    Management acknowledged

  • API revenue growth slowdown

    low

    Q3 FY26 API revenue grew only 2.9% due to timing issues with CDMO contracts pushed to next quarter, not a structural problem.

    Management downplayed

  • Regulatory approvals for operational synergies

    low

    Operational synergies require regulatory approvals, which typically take 18-24 months, but the company is on track.

    Management acknowledged

Q&A highlights

6 direct
Sustainability of 20% EBITDA margins Direct
Yes, it's going to 100% sustain because now you see we have four segments. So, even if there is small issue in one segment, other segment is able to absorb those things. We are very confident to sustain these things.

Analyst questioned the sustainability of the achieved margin, and management provided a confident rationale based on diversification and past initiatives.

Asked by Krisha

Breakdown of exceptional items Direct
One is this merger related asset transfer stamp duty. That's a purely one time. There is no change on that to the INR 29 crores. Then the second one is advisors and success fee consultant, was purely merger related, the INR 10 crores-INR 11 crores. That's a purely one time. The third thing is the tax. Tax returns are INR 7.7 crores MAT credit, whatever we return.

Analyst sought clarification on one-time costs, and management provided a detailed breakdown, confirming their non-recurring nature.

Asked by Krisha

Future growth drivers and priorities Direct
Companion animal is the big segment to grow and other things CDMO and also integrated play for merger entity. These are the things we are looking for both organic as well as inorganic growth. Since our balance sheet is very strong now, we can leverage the balance sheet.

Analyst asked about strategic direction, and management clearly outlined key focus areas for future growth, emphasizing a strong balance sheet for funding.

Asked by Ishika

CDMO revenue contribution and growth timeline Partial
this year we will end up doing 70 crores to 90 crores on CDMO. It's either CDMO or CMO for big players. This year it's going to go INR 70 crores-INR 90 crores. [...] But that will go much faster of 3 years I can say. So, these things will take 3-4 years.

Analyst inquired about the quantitative impact and timeline of CDMO, and management provided current year estimates and a longer-term growth outlook.

Asked by Sahil Sanghvi

Low single-digit API growth in Q3 Direct
API, one of the reason is a little bit timing issue. Last quarter we had a few CDMO contracts. Okay that's pushed to next quarter. This quarter it was less but it's a simple timing issue. But we are growing constantly on that.

Analyst questioned a specific slowdown, and management attributed it to a temporary timing issue, reassuring about underlying growth.

Asked by Sahil Sanghvi

CDMO differentiators and focus areas Direct
both Animal Health and also human health whatever we started targeting life cycle management, but this requires two areas very strong. One is EHS sustainability and the second is quality credibility. And we believe, since we focus from beginning of the establishment, always top focus on EHS and quality and also most important it's tested by various innovators.

Analyst probed for competitive advantages in CDMO, and management detailed their strategic focus on lifecycle management, EHS, quality, efficiency, and speed.

Asked by Sajal Kapoor

North America Animal Health formulation strategy post-merger Partial
We are exploring. We are going step-by-step, first midterm where we want to grow like emerging markets and Europe since we have established distribution. [...] The next phase is definitely yes, US also we are exploring. We are exploring two options whether organic or inorganic.

Analyst asked about a new market opportunity post-merger, and management confirmed exploration but indicated a phased approach with immediate focus on other regions.

Asked by Kaustav

Impact of ban on antibiotics/antiprotozoals in India Direct
It's not a general ban across all antibiotics and protozoals, there were 1 or 2 products very specifically which were identified by the government and those are products which almost everybody had but for us it was a very small amount and it doesn't sort of impact us.

Analyst raised a regulatory concern, and management clarified the limited scope and minimal impact on the company's business.

Asked by Aditya

3 min read 8 chapters

Detailed narrative

Strong Q3 FY26 Performance and Margin Expansion

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.

Solid 9-Month FY26 Financials

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.

Strategic Focus on Companion Animals and CDMO

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.

Post-Merger Integration and Synergies

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.

API Business and Market Diversification

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.

Financial Strength and Capital Allocation Strategy

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.

Strategic Divestment and Regulatory Success

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.

Addressing Regulatory Concerns

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.

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