Viyash Scientific Ltd Q4 FY26 Earnings Call: EBITDA Margin Expands 593 bps, Animal Health API Breaks Plateau

Viyash Scientific Ltd held its Q4 FY26 earnings call on May 19, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Quarter Caps a Turnaround Year

• Q4 FY26 total revenue of Rs.920 Cr— grew 19.1% YoY, with formulations at Rs.499 Cr (+28% YoY) and API at Rs.384 Cr (+5% YoY).
• Q4 FY26 adjusted EBITDA of Rs.200 Cr— up 64% YoY, with margin expanding 593 bps to 21.7%; management described it as the strongest quarter in company history.
• Q4 FY26 PAT turned around to Rs.66 Cr— from a loss of Rs.32 Cr in Q4 FY25.
• FY26 full-year revenue of Rs.3,420 Cr— up 13.8% YoY; formulations at Rs.1,866 Cr (+18%), API at Rs.1,491 Cr (+8%).
• FY26 adjusted EBITDA rose 59.6% to Rs.702 Cr— margin of 20.5% (up 590 bps); PAT surged over 14× to Rs.225 Cr from Rs.16 Cr in FY25.
• Credit rating upgraded— long-term from A to AA-, short-term from A1 to A1+.

Animal Health Breaks Plateau; API Mix Improving

• Animal health API run rate reached Rs.400 Cr in FY26— breaking a five-year plateau of ~Rs.250 Cr; management expects strong growth going forward.
• Human health formulations shifted to complex productswith internal APIs, driving margin improvement; a potent lab for oncology product development has been initiated in R&D.
• API business grew 7-8% in FY26— single-digit growth due to deliberate reduction in intermediate sales; within this, animal health API grew from Rs.350 Cr to Rs.400 Cr, and human health APIs grew double-digit.
• CDMO revenue base of ~Rs.200-225 Cr in FY26— representing ~15% of total API top line (~Rs.1,500 Cr for FY26); relationships span 8-10 large innovator clients, most 10-15 years old.
• Minority interest accounted for ~20% of PAT in Q4 FY26— driven by two majority-owned subsidiaries: Appco (US formulation, 60% owned, Rs.400-425 Cr annual revenue in FY26) and Spain subsidiary (60% owned, ~Rs.550 Cr annual revenue in FY26).

Margin Expansion Accelerates; Synergy Targets Raised

• Q4 FY26 gross margin expanded 236 bps to 55.1%— management targets sustainable 55-60% range, driven by forward/backward integration and elimination of commodity products (which carry 30-35% gross margins).
• Merger synergy target revised to Rs.125-150 Cr annualized— over the next 12-18 months (by early FY28), up from an initial Rs.50-60 Cr; current run-rate is tracking Rs.50-60 Cr annualized as of Q4 FY26.
• EBITDA margin at 20.5% for FY26— above the guided 20% level; management plans significant R&D investment in FY27 and FY28 but expects to maintain current margin levels.
• Effective tax rate guided at ~27% for FY27— declining to 26-27% from FY28 onward (down from old regime 35%), due to transition and one-time merger adjustments.
• Geopolitical freight impact of Rs.1-2 Cr in Q4 FY26— raw material inventory adequate for 1-2 quarters; no material impact expected in Q1 FY27, with monitoring in Q2 FY27.
• Margin volatility from raw materials not seen as significant risk— API business in regulatory markets allows cost pass-through; US formulation business restructured away from commodity exposure.

CDMO and Animal Health Pipelines Set for Multi-Year Wave

• CDMO expected ~40% growth over 1-2 years (toward FY28)— from the current ~Rs.200-225 Cr base; formulation CDMO uses a partnership model with ~50-50% profit share (e.g., with Cipla, Dr. Reddy's).
• 16-17 complex/high-potent API products under development— with profit-share or joint-development models; launches expected from FY29 through FY37.
• 2-3 products with innovators expected to gain global approvals by end of FY27— built over the last 2 years; R&D labs for complex formulations coming online in Q1/Q2 FY27.
• Animal health pipeline: 15-20 new API products from FY28 onward— with 5-6 large products expected to drive revenue from FY29; companion animal segment adds 7-8 new API products targeting patent expiries in FY30.
• R&D team of ~250 scientists for API— including analytical and process; 55-60 scientists for human health formulation; management expanding animal health formulation R&D (headcount and CAPEX) as a key focus area for FY27.
• Product development pipeline covers patents expiring up to 2035— regulatory approvals expected to start flowing from FY27, contributing to both top line and bottom line.

Rs.1,000 Cr EBITDA Target; Double-Digit API Growth in FY28

• Management targets Rs.1,000 Cr EBITDA within 2-3 years (likely by FY29)— from the current run rate of ~Rs.800 Cr (achieved in Q4 FY26, exceeding the earlier FY27 target of Rs.800 Cr); an annual growth rate of ~15% indicated.
• Management expects 15% growth rate possible over next 5 years (by FY31)— a detailed strategic plan to be presented in June 2026.
• API business expected to deliver double-digit growth in FY28— supported by a large number of human health API approvals in FY27 and FY28, plus stepped-up animal health API approvals.
• Depreciation: goodwill amortization to drop from ~Rs.100 Cr (FY26) to ~Rs.35 Cr (FY27)— becoming zero in H2 FY27; excluding amortization, depreciation run-rate expected similar to FY26 levels.
• Key FY27 priorities— strengthening merger synergies, improving operational performance, efficient capital allocation, further debt reduction, and maximizing cash flow generation.
• Receivable days increased by 5-6 days— due to revenue growth, but management considers this under control; operating discipline and cash conversion remain key priorities for FY27.
• Management expressed confidence in the company's turnaround— acknowledging stakeholder patience over the past four to five years and reaffirming future potential.