Thank you, Bhoomi. Good evening, everyone.

On behalf of Systematix Institutional Equities, I welcome you to the Q3 FY26 earnings call of Vimta Labs. We thank the Vimta Labs management for giving us an opportunity to host the call.

Today, we have with us the senior management of the company, represented by Ms. Harita Vasireddi, Managing Director; Mr.

Satya Sreenivas Neerukonda, Executive Director; Mr. Siva Ramakrishna, Chief Financial Officer; and Ms.

Sujani Vasireddi, Company Secretary. Thank you, and over to you.

Yeah. Thank you, Vishal.

Good evening, everyone, and a warm welcome to Q3 and 9 months FY26 earnings call of Vimta Labs Limited. Please note that the investor presentation and the financial results are available on the company website and the stock exchanges.

Also, anything said on this call which reflects our outlook for the future, or which could be construed as a forward-looking statement, must be reviewed in conjunction with the risks that the company faces. This conference call is being recorded, and the transcript, along with the audio of the same, will be made available on the website of the company, as well as on the stock exchanges.

Please also note that the audio of the conference call is the copyrighted material of Vimta Labs Limited, and cannot be copied, rebroadcast, or attributed in the press or media without specific and written consent of the company. From the management, we have with us: Ms.

Harita Vasireddi, Managing Director; Mr. Satya Sreenivas Neerukonda, Executive Director; Mr.

Siva Ramakrishna Kambhampati, CFO, myself; Ms. Sujani Vasireddi, Company Secretary.

Now, I request Ms. Harita Vasireddi, Managing Director of Vimta Labs Limited, to provide you with the update for the quarter and 9 months ended 31st December 2025.

Thank you and over to you, ma'am.

Thank you, Siva. Good evening, everyone.

I welcome you all to the Q3 and 9 months FY26 earnings call today. I will start with the business updates, and then our CFO will take over to discuss the financial performance for the period ended 31st December 2025.

I would like to report that Vimta Labs has recorded a quarterly sales revenue of ₹100.5 crores, showcasing sustained momentum, with a growth of 10.2% on a year-on-year basis. This growth is a result of the pharmaceutical and food testing services contributing majorly.

As innovation accelerates, quality norms become more stringent, the wellness sector continues to expand, and the demand for uncompromising product quality and safety continues to surge. With a wide array and advanced testing capabilities and strong domain proficiency, Vimta is well equipped to seize new growth opportunities in all our services.

Coming to discussing the services we provide in a little bit more detail, our biggest contributor to the revenue, that is the pharmaceutical testing and research services, they continue to do well, but I'd like to share that we saw some lag in booking clinical trials during the quarter, and we also faced certain unexpected operational challenges in the analytical services, which resulted in some revenues getting deferred to next quarters. On biologics contract research and development services, I would like to again inform that the equipment procurement and the facility setup is well on track, and we are confident of commercializing these services by quarter 1 of next fiscal.

Our food testing division experienced good momentum during the quarter, and we will see improved traction in the coming quarter with certain tailwinds in place. In the electrical and electronics division, revenues have remained steady, and we continue to focus on increasing our penetration into the markets.

From an operational standpoint, the installation of second chamber in our Life Sciences facility for EMI/EMC testing is well on track. The current chamber is running at 24/7, 80-85% utilization.

Anchored by a strong scientific and operational base and encouraging market momentum, we are optimistic about driving continued growth across our service offerings. With this, I will now hand over the call back to Siva for a detailed discussion on the financials.

Thank you.

Thank you, Ms. Harita.

Good evening, everyone, and thank you for joining us for our Q3 and 9 months FY26 earnings call today. I'll begin with an overview of our financial performance for the quarter and 9 months ended December 31st, 2025.

After that, we'll open the floor for questions. Before we move into the financials, I'd like to highlight that following the divestment of our diagnostic and pathological services business announced on August 30th, 2024, the figures for the previous period have been regrouped to ensure a like-for-like comparison with the current quarter.

Now, I'll start with the financial highlights for the quarter. Total income for Q3 FY26 stood at 1,005 million rupees, as compared to 911 million in Q3 FY25, a 10.2% growth on an year-on-year basis.

Quarter-on-quarter has seen a slight decline of 3.9% when compared to Q2 FY26. EBITDA stood at 344 million in Q3 FY26, as compared to 343 million in FY25, up by almost 0.4% year-on-year.

EBITDA margin for the quarter stood at 34.3%. PAT in Q3 stood at 176 million, as compared to 175 million in Q3 FY25, a growth of 0.4% year-on-year.

PAT margin for the quarter stood at 17.5%. Basic EPS in Q3 FY26 was at ₹3.96.

Coming to 9 months' performance: total income for 9 months FY26 was at 3,043 million, as compared to 2,521 million in previous year, it has grown up by almost 20.7% year-on-year basis. EBITDA for 9 months was at 1,068 million, as compared to 915 million in FY25, up by almost 16.7% year-on-year.

EBITDA margin stood at 35.1%. 9 months FY26 PAT was at 564 million, as compared to 484 million in FY25, with a 16.4% year-on-year growth.

PAT margin was at 18.5%. Basic EPS for 9 months was at ₹12.76.

I'd like you to note that pursuant to the implementation of the new labor law from November 26, 2026, we have recognized an amount of ₹1.6 crore as past service cost. Considering the one-time nature of this impact, we have disclosed it under exceptional items in the P&L account.

On the balance sheet side, we continue to have a net debt-free balance sheet. With that, we can now open the floor for Q&A.

Thank you.

Hello, sir. Am I audible?

Hello?

Yes, go ahead.

A couple of questions from my side. First being regarding our growth outlook.

Could you provide color on expected revenue trajectory for next 12 to 24 months, specifically how should we think about the ramp-up timelines for your current available capacity and at what stage do you anticipate reaching peak utilization levels?

The markets are very favorable in this industry, whether you take food testing or within the pharma industry, be it pre-clinical research or clinical research, even the market for electronics testing. The environment is very conducive for companies to do well in this sort of a growing market.

Coming to Vimta, I think we have a good track record of 40 years, be it science or systems or our business fundamentals, they're all pretty strong. Growth, we are very confident when it comes to the near term and even the long term.

As such, we don't give any forward-looking statements with respect to numbers, I will refrain from doing that. I can just share my confidence on what we think would be a good growth future for the company.

In past communication, company set a revenue target of ₹500 crores for current fiscal. Given the numbers of nine quarters are out, is that expectation still intact?

Do you expect that quarter 4 would be a back-end surge to bridge the remaining gap to that target?

Typically H2 tends to be better than H1. Like I was mentioning in my opening remarks, there were a couple of events that happened that coincided for us and therefore you see that slight dip in quarter-on-quarter revenues.

We expect Q4 to be much better. That's been the trend and so far nothing says that we will not have a better Q4.

Now, are we going to come to the run rate of ₹125 crores, which is basically what I have been trying to share? Maybe not.

We may not touch that number, but I feel we'll not be disappointed with where we land at by the end of the year.

Okay. One more question from my side.

On the strategic shift towards CDMO and CRDMO, can you give a update when these projects are coming into pipeline and when can we expect the revenues in Q1 in FY27 you told. How much contribution can they provide to the top line?

Next fiscal will be the maiden year for the biologics contract research and development services. For maiden year, I don't think we should be really looking at how big the numbers will be.

It's more about going out there and picking up some clients who can trust us with their projects, and delivering them well so that we build confidence and good reputation with our first few projects. I think that's more important.

We will be ready to commercialize by Q1, and hopefully, we will have a project also, but I won't be able to say that now.

Okay. Thank you.

Thank you for your answer.

Hello. Hello.

Am I audible? Yeah.

Yes, you're audible.

Yeah. You mentioned in your commentary that there were some operational challenges we faced.

Could you just elaborate a bit on what went wrong?

Nothing went wrong. We are doing a lot of restructuring within our facilities to accommodate for expansion of our analytical facilities.

There, I think there is some dependency on external forces to help us do those modifications. There we experienced some unexpected delays.

This has impacted the productivities of certain teams.

Okay. I think you mentioned that there was some spillover of revenue into Q3—oh, into Q4.

What would be the quantum of that if you could just help?

That is too nitty-gritty and let's not get into that. I can just say that couple of things happened together and therefore you see that slight dip in revenues quarter-on-quarter.

Then I think from Q4 onwards, can we back up that assumption?

Yes.

Okay. All right, okay.

That's it from my side. Thank you.

Am I audible?

Yeah. Thank you for giving me a chance.

My question is about capex and the return on capital employed. What we can see is that the capex is on an increasing trend from two, three years back from ₹50 crores now to what the past two, three years it is more than ₹70 crores.

Then ROCE is something like getting not very regular at above 20%. What could be the reason behind it?

Are we seeing some concern in the market landscape, or there is some work in progress and we can see the ROCE going up beyond 20% in the next few quarters?

I think first on the capex spend, typically in our industry, we invest what comes out of our depreciation amount of the previous year. That is a minimum must because you don't want to be technologically obsolete and you also need capacities to expand or grow your revenues.

Because things like equipments, you add on the go. You don't buy and keep those capacities idle unless you are developing a new service.

That's typically the capex spend and we have been very much on target with that. The last couple of years, if you've been following the company, you may know that we have done a lot of infrastructure capacity expansion.

Also recently, we announced a foray into biologics formulation or process development services. That involved additional capex, so that's the reason you're seeing those additional numbers.

Coming to ROCE, I think we have some of the best in this TIC, CRO industry. I don't see a problem there.

Okay. Are we saying that we can get back 20% kind of ROCE in the next few quarters, or it would be remaining under 20%?

See,

the ROCE that you're seeing in the presentation is for the period of 9 months. Okay.

That is compared for the fully in the previous periods. Having said that, this, as MD has just mentioned, with the addition of biologics division where we are spending and the revenues are yet to come up, there is a slight dip in the ROCE in current financial year.

It will come back to regular levels.

Okay. Thank you.

Hey, hi. Thank you for the opportunity.

I have two questions, ma'am. One, we had discussed in past about the US exposure, where I believe you had mentioned that it was about 35% and exports and then 60% of that, which effectively translates into 20% of the top line to US.

Is that proportion remains the same if I look at it top-line contribution?

Yes, I think the exports percentage has actually slightly gone up in Q3. Exports, we are more or less doing good.

In Q3, we have export revenue.

I'm sorry, can you repeat that? I could not get it.

Almost 39% of our income is from exports, which is actually better than the first half of the year.

Okay. Out of 39%, what would be US export, ma'am?

About maybe 60% is from US. We have...

That proportion remains.

Yeah. Yes.

Sure. Second question, ma'am, on this top-line guidance, I did not follow.

Are we sort of still more or less aligned with that ₹500 crore top line for the next year or that may be sort of revised?

No, no. Next year, we're definitely aligned.

Okay. Next year annual target still remains ₹500 crore?

Like I said, I don't give out forward-looking statement with respect to numbers, but since this 2025-26 was a goal we took almost five, six years ago when we even had diagnostics, so that's when we shared this vision with the market because it's always good to share long-term plans so that you understand what we are working towards. Otherwise, we don't normally issue forward-looking guidances on numbers.

Okay. Okay.

Any plans on inorganic, ma'am? Because there are a lot of opportunities in the market for your line of business typically where it is a lot of unorganized players are there who are trying to sort of get exit.

Are we looking at that inorganic mode of growth or we are strictly no, no?

In principle, we too believe that the future would have some sort of inorganic component with regards to our growth. Is there anything on the cards right away?

I would say no.

Okay. That's helpful, ma'am.

Thank you.

Welcome.

Hi, sorry I was on mute. Ma'am, in your opening comments, you hinted that there's some positive traction on the food front that you are witnessing and we'll probably see good numbers from next quarter.

Can you share some color on are there any positive regulatory developments there?

No. Food tends to be seasonal business, and Q4 is typically the quarter which does the highest numbers in the whole year.

That's why I mentioned tailwinds, because in Q4 you generally see that seasonal benefit.

Right, right. There are no important regulatory changes happening in this space that can help a lot of...

Quite a few are happening. They're continuously happening.

A lot of effort is being put to continuously expand our scope under the NABL certification also. That is actually a good thing for the laboratory, and these are continuously happening.

We can't say there is any major one, but small, small ones, they are the ones that add more and more testing revenue for the laboratories.

Okay. Second one on the clinical trial research space, have we been able to kind of get more clinical trial research projects?

Yes. Like I mentioned I think even in the previous call, we're already working on a couple of more projects.

We have initiated these projects, the new projects that we have got?

Yes. One is on its way, and the other one is under initiation.

We'll see their impact going forward in subsequent quarters?

Small portion of our revenues, because it's just a year since we started. Even if it was doing well, the impact on the overall top line will still be very, very small.

I wouldn't attribute any growth in the previous quarters to clinical trials. It's yet to become significant for us.

Okay. These are the Phase 3 trials, right, unlike bioequivalence trials which are different?

These are larger Phase 3 trials, and probably they fetch you more revenues than bioequivalence trials. That's the understanding?

It depends. What we have done already are a Phase 2 trial.

Phase 3, we are yet to do any. It could be different kinds of trials.

Now the population size can vary as small as 60-90 subjects. The bigger trials which are in hundreds of crores could have much bigger populations.

Here the variation is very high.

Okay. You take the entire ownership of the trial or you basically help the sponsor conduct the trial for them?

We do the entire trial for them.

Okay. Basically, the sponsor will be Vimta Labs if I kind of go and do a clinical trial search, Vimta Labs should be the sponsor name in those trials?

Sponsor is the customer.

Okay. Will your name figure up in the clinical trial name...

No, I don't think so.

Okay. Yeah.

Like in some trials I could see like IQVIA names, IQVIA being the sponsor, while the drug is owned by a company, but probably IQVIA is a sponsor there of that trial.

I see. I'll have to then reconfirm.

Yeah.

Okay. Okay.

Just on final one on the biologics front, any direction you would like to give in the next 3, 4 years, how do you expect this business to shape up? Can this be like one of your large verticals in the overall business?

I think it's too soon for me to comment on it. We should go through a year and see how we are able to navigate in this market.

Allow me to come back to you maybe after a year on this. It does have the potential.

Uh-huh. Is this fair to say a biosimilar project would probably be much larger in terms of the value size?

If you get a customer on board for a biosimilar project, the potential revenue size of that single project should be typically larger than other projects that you would have on the analytical side?

When it comes to biologic...

Can I

take that? Sure, go ahead.

Yeah. It depends, Vishal, at what stage are we onboarding the projects.

Biologics, we do multiple services for any biologics, biosimilars and peptides. One is analytical services, one is characterization, one is on the clinical side we do pre-clinical studies, and the new one which we are starting now is the formulation development service.

If someone already has developed the process and he has some challenges in the process, he's only looking for troubleshooting and all, the project size may be a little smaller than if you get the full project, let's say, he already has a clone which they have developed or they have secured a licensed clone, and from there all the way up to the process, up to the pilot scale development. These are larger projects, right?

It depends on what is the amount of exposure on that particular project to us. Definitely, if you get the full scale, let's say, like what we are setting up here, up to 20 liters, 30, 50 liters.

As the scale increases, the project size or the project value also increases.

Okay. We have capabilities across all the segments in place, we'll not need to hire, you have personnels and you also have equipments, both?

We have human, yes. The team is on board, the equipments are on board, the site is ready now.

Up to the process level, lab scale, we are ready. Then the next scale-up would be maybe after a year once we see how traction builds up in the market.

Got it, sir. Thank you very much.

That's all from my side.

Hello. Am I audible?

I would like to congratulate the team that we have become a significant name in the CRO industry. I have two questions.

One question is on the line of the EBITDA margins. We are maintaining a very healthy EBITDA margins from financial year 2023.

Do we expect the momentum to continue in terms of margin?

These EBITDA margins, I always say plus-minus 1% or 2%, they will be maintained at least in the near term.

Okay. There is the trend of an increase in the use of AI, which is significantly boosting the EBITDA margins for various companies.

In our field, do we see the use of AI?

Yes. We work with a lot of technologies and all these technology companies have already built their AI components into these technologies which we have been using for quite some time.

In addition to that, Vimta has set on a digital transformation path almost five years ago. We have our own in-house digital transformation team that keeps working on our processes to make them more efficient and also help scale up the processes.

This is a continuous activity and that's picking up a lot of momentum for us, especially last year. We expect to see a lot more of this happening in the next year in our laboratories.

We can expect a further improvement in margins.

Margins, there is a plus side and a minus side also. On one side, we are definitely pushing our efficiencies, which is helping us the escalation in cost of manpower and also some input material.

We use a lot of chemicals, reagents, standards, columns. On that side, there is a continuous escalation in prices.

Manpower, like in any other industry, even we have been severely impacted with the rise in costs, especially post-COVID. All these years we have been able to successfully neutralize that by countering it with more efficiencies in our workflows.

Relating to manpower, there is an increase in competition in the CRO landscape specifically. Is there any manpower attrition or we are just in line?

We are on par with the industry, I would say, but is the attrition low? No, attrition is quite high across the industry, and it looks like now that's going to be the norm.

Hopefully we are able to retain the team managerial position.

Yes, we are able to retain people who are key and critical for the sustainability of science and growth within the organization.

Thank you. My next question is regarding the CRTO landscape, that we are in the top five positions in almost all of the segments we have put our foot in.

In the electronics and electrical segment, how do we plan to get that status? Because there are several sectoral tailwinds there.

How can we capitalize on that? Is there any plan in line?

Yes, we have already doubled our capacity this year for electronics and electrical testing division. The growth is as per our expectation.

Here, just like in the food industry, you need more testing centers, because if you're testing, for example, a drone or if you're testing an electrical vehicle, very unlikely that you will bring your vehicle all the way from Pune to test it in Hyderabad. There are such constraints in this industry.

We have filled a gap that existed especially in the Hyderabad region. Our majority of business comes from defense, and some of you may know Hyderabad is a good home for a lot of OEMs that supply to the defense sector.

That's a gap that we were able to come in and quickly fill. We were touching our capacities on the EMI/EMC testings, therefore we added one more chamber which got qualified in the last quarter itself.

Going forward, to keep continuing to grow this business, we would have to open up more laboratories. That's the way to grow this business.

Thank you. That's all from my side.

Hello. Good evening.

Thank you for the opportunity. My question is on the employee expense and other expense.

While they are flat sequentially, if picture of investments/expenses growth for the Q3 and 9-month is it related to the new facility and whether some of these investments are ahead of the revenues, etc.? Since the YoY growth in both of these segments is higher than the revenue growth, we would like to better understand the nature of investments or increasing expenses in both employee and other expenses.

Employee expenses, like you said, it's flat. As a percentage, it's slightly higher because of the slight dip in the top line.

There is nothing significantly that has grown there. Other expenses, yes, we are increasing our marketing efforts overseas, there will be some additional expense on account of this in the coming quarters as well.

Facility expenses that we have added recently.

Yes, that's a large facility that we added, there will be a little additional expense coming from there as

well. Noted.

Thank you.

thank everyone for joining the call and thank you for the nice questions. I want to thank you and Vishal and Systematix, and the host for hosting this call.

Thank you and have a pleasant evening. Bye-bye.

Thanks, Vishal. Thanks, Bhoomi.