Viyash Scientific is an integrated pharmaceutical company spanning animal health formulations, human health formulations, APIs, and CDMO services, with manufacturing and R&D in India, Spain, Turkey, Brazil, and the US. The animal health business, which includes large animal and companion animal products, is the core, with a strong presence in Europe and emerging markets, while the API business crosses an INR400 crore annual run rate after five years of stagnation. The CDMO segment works with 8 to 10 large innovators under relationships lasting 10 to 15 years. In FY26, the company expanded gross margin by 321 basis points to 54.3% and EBITDA margin by 590 basis points to 20.5%, with Q4 EBITDA margin at 21.7%, reflecting operating leverage and a product mix shift toward higher-value complex products and life cycle management. This margin level, well above the 13-15% typical for manufacturing, indicates a business with pricing power and a defensible niche.
The persistence of these economics rests on several barriers that are hard to replicate. The company holds EU GMP-approved sites in Spain and Turkey, which are critical for selling into European markets, and it has backward-integrated key APIs, covering about 45% of US product volume and shifting six intermediates in-house. High-potent API capability from 0.5 kg to 100 kg batches is a differentiator with few competitors, and the R&D platform of 200+ scientists includes specialized cytotoxic handling and process safety. Animal health genericization is only about 15% versus 85-90% in human health, leaving a long runway for pricing and volume growth. The company also covers 80-90% of the large animal product portfolio, and its long-standing innovator relationships create significant switching costs in CDMO, where tech transfer and optimization lock in customers. These are not commodity economics; they are moated by regulatory, technical, and relationship capital.
The inflection is already underway and will define the business 18 to 24 months from now, roughly mid-2027 to mid-2028. Manufacturing expansion in Spain and debottlenecking in Turkey are in progress to support volume growth, while the companion animal R&D expansion is expected to be completed within six months, enabling 7-8 new product launches per year. The innovator life cycle management business is guided to grow 40% in FY27 off a base of INR200-225 crores, and the CDMO segment, currently at INR70-90 crores annual revenue, will begin full commercialization of life cycle management products after 2-3 years, with 16-17 products developed under profit-share models. Synergies are tracking at INR60 crores and are targeted to reach INR125-150 crores annualized within 12-18 months, meaning by late 2027 or early 2028. Management has affirmed the INR4000 crore revenue and 20% EBITDA margin target for FY28, and the EBITDA run rate of INR800 crores achieved in Q4 FY26 is expected to climb toward INR1000 crores within 2-3 years. By the 18-24 month horizon, the company should have a broader companion animal portfolio, expanded CDMO revenue from early commercial supplies, and a lower tax rate of 27% as subsidiaries migrate to the new regime.
Management's track record on commitments is strong. On the February 2026 call, they affirmed the INR4000 crore revenue and 20% EBITDA margin by FY28, and the May 2026 call confirmed the EBITDA run rate of INR800 crores was achieved in Q4 FY26, a year ahead of the internal target. They also committed to INR125-150 crores of synergies in 12-18 months, with INR60 crores already realized, and the Mangalore testing site divestment saves about $1 million annually. Free cash flow turned positive in FY26, and net debt-to-EBITDA has been reduced to below 4x, with a goal of becoming debt-free by FY27. The company has been disciplined on capex, with no major capital expenditure planned for the next two years except for new opportunities, and it is selectively evaluating inorganic deals in CDMO and companion animals rather than diluting shareholders. The tax rate is expected to drop to around 27% in FY27, and depreciation will decline as goodwill amortization falls from INR100 crores to about INR35 crores, directly boosting PAT conversion. This is a management that has consistently raised or held guidance while delivering on operational metrics.
The earnings path over the next 18-24 months is quantifiable: from an INR800 crores EBITDA run rate, the company targets INR1000 crores in 2-3 years, implying a 25% increase, with revenue growth of 15% per year and margin expansion from 20.5% to over 21% as utilization rises and synergies materialize. The key to this path is the conversion of EBITDA to PAT, driven by lower finance costs, a reduced tax rate, and lower depreciation, which should accelerate net income growth. What must hold true is that new product approvals from filings made in FY23-25 start to contribute, that the CDMO life cycle management products obtain regulatory approvals globally beginning end of this year, and that raw material availability and freight costs remain manageable, as a geopolitical disruption could pressure margins if it persists beyond 1-2 quarters. The single largest falsifier is execution on R&D and regulatory timelines, particularly for the 16-17 specialty products and the companion animal pipeline, because any delay in approvals would push CDMO commercialization further out and slow the EBITDA ramp. Receivables days increased by 5-6 days in Q4, which bears watching for cash conversion, but management sees it as transient. If the company delivers on its stated milestones, the business will be a higher-margin, more diversified animal health and CDMO player with a stronger balance sheet and a clear path to INR1000 crores of EBITDA by 2028.
companyname: Viyash Scientific Limited (Formerly known as Sequent Scientific Limited) ticker: VIYASH sector: Pharmaceuticals (APIs, Human Health Formulations, Animal Health Formulations, CDMO) Viyash Scientific is the product of a merger between SeQuent Scientific, an animal health company, and Viyash Life Sciences, a human health API and formulation business. The National Company Law Tribunal sanctioned the scheme on November 18, 2025, and it became effective December 16, 2025, with an appoint...
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FY27 innovator business guided at 30-40% growth driven by life cycle management and new product approvals; animal health API to reach INR400 crores run rate after 5 years of stability
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