Thank you, Nitesh. Good evening, everyone.

On behalf of Systematix Institutional Equities, I welcome you to the Q4 FY '26 earnings call of Vimta Labs. We thank the Vimta management for giving us an opportunity to host the call.

We have with us the senior management of the company represented by Ms. Harita Vasireddi - Managing Director, Mr.

Satya Sreenivas Neerukonda - Executive Director, Mr. Shivarama Krishna - Chief Financial Officer, and Ms.

Sujani Vasireddi - Company Secretary. I now hand over the call to the company management for opening remarks.

Thank you, Vishal. Good afternoon, and a warm, warm welcome everyone to our Q4 and FY '26 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.

The 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 a copyright material of Vimta Labs Limited and cannot be copied, rebroadcasted, 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, myself Shivarama Krishna [Kalambhotla?] , CFO, and Ms.

Sujani Vasireddi - Company Secretary. Now, I request our Managing Director Ms.

Harita Vasireddi to provide you with the updates for the quarter and year ended 31st March 2026. Thank you, and over to you, ma'am.

Thank you, Siva. Good evening, everyone.

Thank you for joining us on this call today. FY '26 has been a year of strong execution, resilience, and strategic progress for Vimta Labs.

As we reflect on the year, I'm pleased to say that we have continued to build on our core strengths while laying the foundation for the next phase of growth. Throughout FY '26, Vimta has delivered consistent growth across its core service lines supported by robust demand, disciplined execution, and unwavering focus on quality.

Pharmaceutical research and testing services remained our largest contributor, driven by good demand from both domestic and international customers. Food testing also demonstrated good momentum while our electronics and electrical testing and environmental testing continued to scale in line with expectations.

The broader environment continues to be favorable, driven by tightening quality norms, increasing regulatory scrutiny, innovation in pharmaceuticals and allied industries, and an expanding wellness ecosystem as such in the life sciences. These trends reinforce the relevance of our services and strengthen our confidence in the long-term outlook of the industry.

One of Vimta's defining strengths is its commitment to quality and compliance. During the year, we successfully underwent multiple regulatory and customer audits, reinforcing the trust that global customers place in our systems, science, and people.

These outcomes are a testament to the strength of our processes and the dedication of our teams. FY '26 also marked a strategic milestone with our entry into biologics contract research and development services.

The first year, which is this year, FY '27, will be about execution, learning, and building credibility. Our focus is on delivering well for customers, earning their trust, and establishing Vimta as a reliable partner in this complex and evolving space.

We believe the long-term potential is significant, but we will approach this opportunity with characteristic discipline and patience. Vimta continues to maintain very healthy EBITDA margins, clocking about 35.8% in '25 in FY '26, which we believe are among the best in the industry, even by global standards.

While there may be natural fluctuations due to capacity ramp-ups, maintenance costs, people investments, and, of course, now the geopolitical issues, our focus remains on sustaining margins in a stable and competitive range over the medium term. Our progress in FY '26 would not have been possible without the dedication and expertise of our people.

While talent availability and attrition remain industry-wide challenges, we have successfully retained critical scientific and leadership talent, which remains central to sustaining quality, innovation, and growth. As we look ahead, we remain confident.

The opportunities across pharmaceuticals, food testing, electronics are real and growing. At the same time, we remain mindful of the global uncertainties, cost pressures, and competitive intensity.

I would like to thank our teams, our customers, our partners, and all our shareholders for their continued trust and support. We remain committed to building long-term value through quality, consistency, and thoughtful growth.

Thank you for being with us, and we look forward to continuing this journey together.

Thank you, Ms. Harita.

Good evening, everyone, again, and thank you for joining our Q4 and FY '26 earning call. I'll begin with an overview of our financial performance for the quarter and the year ended 31st March 2026.

After that, we'll open the floor for any questions. Before we move into the financials, I'd like to highlight that following the divestment of our diagnostic and pathological services business in '24, the figures for the previous periods have been regrouped to ensure a like-to-like comparison with the current quarters.

I will start with the financial highlights for the quarter. Total income for Q4 FY '26 stood at ₹1,120 million as compared to ₹961 million in Q4 FY '25, up by almost 16.6% year-on-year, with a quarter-on-quarter increase of 11.5% when compared to Q4 FY '25.

The staggering growth was on account of our food and pharma division performing exceptionally well. EBITDA stood at ₹421 million in Q4 FY '26 as compared to ₹347 million in Q4 FY '25, up by almost 21.5% year-on-year.

EBITDA margins for the quarter stood at 37.6%. Profit after tax in Q4 FY '26 stood at ₹211 million as compared to ₹183 million in FY '25, a growth of 15.2% year-on-year.

PAT margins for the quarter stood at 18.9%. Basic EPS was at ₹4.7.

Coming to yearly performance, total income for FY '26 was at ₹4,163 million as compared to ₹3,482 million in FY '25, up by 19.5% year-on-year. EBITDA for FY '26 was ₹1,489 million as compared to ₹1,262 million in FY '25, a growth of 18% year-on-year.

EBITDA margin for the year is at 35.8%. PAT was at ₹775 million as compared to ₹668 million in FY '25, increased by 16.1% year-on-year.

PAT margin was at 18.6%. Basic EPS for the full year was at ₹17.4 per share.

On the balance sheet side, we continue to have a net debt-free balance sheet with the cash and cash equivalents, including bank balances, close to ₹650 million. With that, we can now open the floor for any question and answers.

Thank you.

Hello, sir. Thank you for taking my question, and congratulations on the results.

My question would be that on your core verticals, would it be possible to give out the margin profile of each of the verticals? Going to the future, which vertical will grow the highest?

If you could also give some update on your biologics vertical. Thank you.

We don't differentiate the margins between our service lines. It's all treated as one service, so that information is not available.

Going forward, 90% of our revenues are driven by research and testing services for pharmaceuticals and food, this will continue. Both these service lines will continue to drive the growth of the organization.

Third question?

On the biologics vertical.

Biologics,

yeah. Vertical,

yeah, we have put in place the processes, systems, equipment, people to start working on contract research services for biologics and peptides development. The machinery and the people, infrastructure, systems, everything is ready.

Also,

when do you see this biologics to be a significant contributor to your revenue profile?

Maybe not in its maiden year, too soon to comment on that. This year, what we hope to do is build traction in the market, onboard at least a few good clients, and deliver well.

If I may ask, if it's possible to disclose how much of your service profile or the contract profiles are FTE versus FFS for these four verticals?

FTEs are only in the pharma service lines. Food and other businesses don't really have FTEs.

Even on the pharma side, it's limited to analytical services as of now. It's not a major percentage.

FFS would be the major percentage?

Yes, yes.

Okay. Thank you.

Thank you very much for giving me opportunity. I just want to know what are the growth drivers which you see panning out the next one or two years?

How does the business visibility going forward, matlab in terms of maybe, I'm not asking for matlab very bigger hypothetical, but let's take it on quarter-on-quarter basis or month-on-month basis, matlab how do you see that your long-term strategy is aligned with the revenues? Do you think in current environment, it does have any kind of impact on current environment in terms of revenue booking or maybe deferment of client due to this US trade or maybe supply chain issues arises due to Iran-US war?

Is there any impact of any global environment, point number one? Second, growth drivers in near term, and how do you see the visibility in near term in terms of when you talk to your clients or maybe new prospective clients?

That's it from my side.

The growth drivers for our industry, which we call contract research and testing, have more or less been same during the last decade. The only thing is outsourcing, whether it is for testing or research, whether it is pharmaceuticals, nutraceuticals, medical devices, or even for that matter electronics or food, the outsourcing is growing.

All these industries, on their own globally, are growing at the rate of anywhere between 7% to even 11%, 12%. That itself provides an opportunity for all the players within the industry.

Further to that, we have been dominantly playing with just a few markets. Our business development efforts are to go out overseas and gain more market share.

Other than that, there's nothing that is significantly or drastically shifting in terms of growth drivers within these industries. Coming to business visibility, what we see for our food, pharma, and electronics testing is that it's good visibility.

These are going to be industries that will flourish in the future as well because some of them are essential, and we see that more and more R&D spending is happening. The pipelines, especially for pharmaceutical, are shifting more towards large molecules.

The innovation aspect is I think on the upward trend because the shift is from small molecules to large molecules. We also see a lot of smaller companies coming into the space of R&D wherein even the large companies are collaborating with the smaller companies to strengthen their R&D pipelines.

All in all, I think for pharma, food, and electronics, good visibility. Coming to electronics, I think India's Aatmanirbhar initiative and the focus on indigenizing a lot of defense tools and vehicles, whatever, is high, and that calls for a lot of testing.

Hyderabad is a hub for defense OEMs, I think we are in a good space for now. Even putting aside defense, overall the electronic industry, what we hear, what we see also happening on the ground level is that there is a lot more activity in terms of investments that is happening.

The manufacturers who were also predominantly playing only in the domestic market look now towards overseas markets to sell their products. All this is a healthy environment for testing lab as a third party to verify safety, compliance, and quality of the products.

Coming to what our long-term strategies are, they're perfectly I think aligned to how these industries are growing and the macro trends within the industry. Impact of war is there on us.

The cost of some input materials, consumables has gone up slightly. There is a slightly longer lead time for us in the supply chains, there is some impact directly on us as a result of this war.

What will the future impact be is a wait and watch. We'll have to see how things pan out for everybody.

Coming to last year, yes, I think the pharmaceutical industry was under strain because of the tariffs imposed by US. I think these have now been reversed, whatever small lull that we had observed last year, we are hoping that will quickly be reversed at least on the tariff side of things.

At least from environment point of view, it means global environment, don't worry, industry prospects outlook, this FY '27 would be better than '26, do you think? Based on your client interaction or experience, because more and more defense, electronics, and plus your pharmaceutical launches, I think I don't know how which segment going to benefit us, but based on your interaction with clients because see, all these are the very very high growth areas in terms of client's interest and visibility even from government point of view.

You are in sweet spot in terms of launching a new product, CDMO, and electronics, and plus food is again a growing industry. I'm just try to understand is there any matlab in terms of client deferment of new products, or is there any competition, or do you see in terms of structural growth, let's take it maybe FY '27 to FY '30, based on your clients' interaction, it means first is your clients and second is sector and third is competition in terms of margins?

How do you see going forward here?

In a flourishing industry, in a growing industry, competition is always going to be there, and competition only intensifies because it's a very good environment. Now coming to in near term, you're talking 2027 to 2030, if we talk subtracting the situation, geopolitical situation, and also putting aside the sudden surprise tariffs that these days countries are imposing on each other, now if you remove those factors, I think things should be good, better than what we have seen now.

Things should only become better. Given the uncertainties, now I can only comment when those things happen because it's anybody's guess.

I completely agree. Your company is very difficult to track because in other sectors we can track export data or maybe certain IP and growth and all.

In our kind of business, very difficult to get any basically growth drivers or maybe because all this business or in B2B and is not in public domain actually. Nobody can track it.

In terms of that's why if you give some visibility, let's take it can our company grow, let's take it, 20% to 25% kind of CAGR over next 3 to 4 years and maintaining the profitability? That is possible, or it is a very optimistic scenario?

It's a stretch number, but definitely doable. That's what we target each year.

Okay. Okay.

In terms of, let's take it, expertise, like any clients we are dealing, so that client is coming to us or he he also it means is it launching new product, he also What what I'm trying to understand is is client, is they price sensitive or not?

For some services which are very routine, low technology, low science, those kind of services, price competition will always be there. Then there are some specialty services where the scientific input is very critical.

There, I think Vimta has an edge. It's a mix basically, especially on the pharma side.

Food tends to be more and more leveled ground for everybody. Companies that move fast whenever there's a regulation change, there is some advantage that can be taken out of that, and that Vimta has been quite good at that so far.

Okay. It means from here, we're maintaining gross margin, and the incremental profit could be driven by only revenue growth, right?

Margins I think we're already doing well at EBITDA level, I would say. You can expect a correction of 1%, 2%, depending on how things are panning out right now.

Because if the input cost goes up, there could be some impact for us there. Also manpower is something that continuously keeps on increasing, but we try to offset with the top-line growth.

We can expect some correction, but more or less I think it will be maintained.

It would be manageable, or maybe it can be nullified due to revenue growth also?

Yes. Yes.

Thank you very much. Thank you, and all the best.

Thank you.

Hi, good evening, everyone. In one of your slides on the presentation that you've published, it says the pharma analytical testing industry is about $9.7 billion.

Could you kind of give us a sense considering this industry size, we're small and despite being small, we are meaningfully large in Indian context. Just wanted to understand why is that so?

Despite the industry being large, the Indian market seems to be much smaller. Where are the gaps?

Is testing not happening enough in India? What could be that reason?

I wouldn't say that testing is not happening in India because regulators such as US FDA, EMA leveled the ground for everybody, and India remains on the generic side, one of the largest players in these markets. Having said that, the R&D side of things, I think, is on a much lower scale in India compared to these developed markets.

Maybe that's one of the main reasons. The numbers that I know is by 2030, the Indian analytical testing market will be around approximately $300 million.

It's really, really small compared to the global market. The main reason why we will not be able to tap into all that big-sized global market is because this tends to be something that is outsourced to local players.

Because it's not worth shipping a sample overseas for a simple analysis or a short-term analysis, only where the project is of higher value would the customer also benefit in going to a country like India, which gives the advantage of both time, price. I think these are the factors.

If NCE R&D picks up in India, that would be a trigger for the industry to become larger?

On the analytical side, yeah, could be.

When I say NCE, I mean new chemical entity R&D.

Yes. Possible.

More R&D definitely is more work on all sides of testing and research, right? Not only for analytical, but also for preclinical, clinical research, everywhere.

Like and your existing revenue, would large part of and

your existing pharma analytic revenue, would large part of that be driven by ANDA filings in the US generic filings in the US, or there is something else beyond the ANDA filings that you support?

Analytical testing, I think by and large remains on the ANDA side. I would ask Sreenivas to supplement if there's anything else here.

Mostly on the ANDA side and for their product release.

Product batch release, you said?

Sorry?

You said product release.

Other general product release, which is already, what you call, approved in the market, and if they are filing ANDAs, then to support their ANDA filings. It includes both approved products, ANDA, new products, 505(b)(2)s, NDAs.

There could be some part of IND analysis, which is also done. Majority is towards the generic 505(b)(2), NDA, and ANDA.

Okay. On the biologics business that you've started, would you only do contract research and manufacturing there, or would you also do some off-the-shelf products which you can offload to some companies willing to do biosimilars in the US?

You'd kind of do the initial development on biosimilar and keep it ready, and maybe someone wants to kind of leverage that. Is that also a strategy?

To start with, it is mostly contract research. That's what we are going to start.

We are going to develop products for our sponsors or clients. Maybe at a later stage, but initially that's the plan.

Okay. Have you signed clients yet on the biosimilars side?

We have good enquiries, and we will be closing them soon. We have a good attraction from Europe, from India, a couple of them from US as well.

We're just finalizing the product and the modality.

Great. Thank you.

I'll come back in the queue. Thank you very much.

Yeah.

Hello. Thanks for the opportunity, ma'am.

I want to understand what has led to the growth this quarter. I think we have achieved highest ever revenue.

Do you think we'll be able to keep up with this momentum, maybe ₹120, ₹130 crore every quarter in the revenues?

Yes, that's the intent to keep moving at this momentum. The prime drivers for Q4's good revenues are our preclinical and also food has done well, food testing, because Q4 tends to be a good quarter for food testing.

These were the main reasons. We could have done better because in some areas we did not see the kind of growth that we were expecting.

Definitely, the intent and effort will be towards maintaining this momentum.

Ma'am. That's helpful.

Ma'am, one more question. On the environmental testing front, how is the performance?

I understand we are only providing post-project monitoring, just wanted to get some color on that.

It's a very tiny part of our of work that we do at Vimta. We have moved away from EIA, which is environmental impact assessment, and now speaking only to PPM, which is post-project monitoring.

In this transition where we were moving away from EIA getting into PPM, what we could do is just keep the revenues there. Maybe next years these years, we will try to push up the revenues, but as such, this is not a high focus area for the company because the growth opportunities are not that high in this segment.

Got it, ma'am. Got it.

Ma'am, how has food been this quarter, and has the war impacted in any way?

There was an impact, especially the last fortnight of March, because we serve exporters and we also support import testing at the NFL in Navi Mumbai. There was an impact in the last fortnight.

Ma'am. Understood.

That's helpful, ma'am. I have more questions, but I will join back in the queue.

Thank you.

Sure, yeah. A reminder to all the participants that you may press star and one to ask a question.

Hello. Thanks for the opportunity.

My first question is on the export side, could you please quantify what is the percentage of export revenues?

In Q4, it has been around 38%.

Okay. One more question, now that we have a new facility up and running, what are the overall utilization levels?

Utilization will slowly pick up because you don't build a facility wherein you're going to occupy it immediately. That's not how you plan facilities.

Utilization will pick up this year, a little more next year, more the following year. That's how it is done infrastructure-wise.

Okay. One last question, ma'am.

You have mentioned that new biologics contract research will commence from FY '27, that is next quarter means. How are we placed at the moment, and how are the efforts being put to bring in new projects for the company?

Some projects are under discussion, like I was mentioning in my opening remarks. The people, systems, infrastructure, equipment, it's all ready, and we are discussing some projects, and we hope something will materialize soon.

Okay. That's all from my side.

Thank you so much, ma'am. All the best.

Yes. Thank you for the opportunity.

Ma'am, I would like to know about the subsidiary that has been approved in US. In which segment are we looking into, and also what sort of investments are we going to incur for the US subsidiary?

The purpose of undertaking this is to be closer to our customers because we have a sizeable population there, and also to give them greater confidence. We are on their soil, it gives greater confidence for them.

As of now, that is the intent that we have. If something develops in the future beyond this, I will certainly come back to all of you.

Okay. Does it give advantage to us in case of tariffs if we set up a subsidiary in US?

No, not much. There's hardly any impact of tariffs on the services that we provide.

As MD has just mentioned, this is the main purpose of opening the subsidiary there is to be closer to the customers.

Right. My last question is

Right in terms of a long customer [unclear]

Yeah. Got it.

Yeah. My last question is with the new capacity that has come up, what sort of revenue can we look into, say, once it fully gets utilized?

When we took up this project of expansion, the idea was to have a facility that can take care of our growth at least for the next four, five years. I think we are good so far.

We have moved into these facilities, and we see growth happening as you have seen the last financial year. The idea is to keep on continuing this momentum.

Okay. Thank you very much, and wish you all the best.

Thank you.

Thanks. Ma'am, how are the electronics and electrical testing scaling, and what is that medium-term potential?

Last year for us has not been very exciting in this segment. We were hoping that we would pick up some more momentum here, but we had leadership challenges which are fixed now, leadership challenges on both the technical and operational and BD side.

This is fixed now. Despite those challenges, I think the team has progressed.

It is very encouraging for us. We have retained most of our customers, and the word of mouth is strong for us in this region.

Now since that factor is addressed, we hope to see some strong movement coming here.

Got it, ma'am. That's helpful.

Ma'am, also with a net debt-free balance sheet and ₹650-plus million cash, how does management plan to deploy capital going forward?

Very good question. As of now, there are no firmed-up thoughts on what we will do with this money, but it's good to always have cash on hand, especially in these uncertain times.

For now, I have no specific information to share.

Ma'am. I understand that.

Ma'am, one more question if I may squeeze in. Are there any plans for acquisition, capacity expansions, or investing in any new service lines?

Like

I said, nothing concrete as of now, but if something materializes, I definitely come back to you.

All right, ma'am. Ma'am, how should investors think about margins in the biologics business compared to the core testing business?

Honestly, now we think the margins should be around this region. Now, our expectation is that it might be a percent or a few percent here and there.

The reason why we say this is because the early projects may come more from the domestic clients and also the other aspect is the cost of input material is quite high here. Once we develop some traction here and we have a track record of successful products or processes that we have developed under our belt, we can go overseas.

I think when we go overseas, the margins can be good.

All right, ma'am. That's from my side.

Thank you, ma'am.

Ma'am, our original plan was to clock ₹500 crore revenue annualized, where do we stand? Is it possible to achieve it in FY '27?

Secondly, how confident we are to maintain our EBITDA margin over 35%?

Yes, we have had a very good CAGR during the last 5 to 7 years. We want to maintain that CAGR, and if you extrapolate that, then yes, the number that you're talking about is what we are also targeting.

Our goal was to hit 500 by last year, but because of divestment of diagnostics, we said we will try and get to those run rates by Q4. Again, Q4, some headwinds in terms of external factors.

I think we put a very strong effort, and we would have really gone close to that number. Some things did not happen for us which we were expecting.

Going forward, we are hopeful, very, very hopeful. There are uncertainties in the environment now, as you all know.

One more question, ma'am. Is there any plan to raise money to ramp up the capex plan?

We have cash of ₹65 [crore?] on hand, but is there any plan near term by way of rights issue or some other way?

As of now, we don't need anything from that kind of a method. If there is, then we will definitely share that news.

Okay. Thank you.

Thank you to all the participants who took the time to join the call. I also wish to thank Systematix, especially Vishal, for being here and facilitating this call.

Good day to all of you.