Viyash Scientific Limited: Post-Merger Momentum Drives Strong Q3 FY26 Performance

Viyash Scientific Limited, formerly known as Sequent Scientific Limited, has announced its financial results for the quarter ended December 31, 2025 (Q3 FY26), marking a significant milestone as the first combined reporting period post-merger. The company has demonstrated robust growth momentum, with impressive gains in revenue and profitability, signaling a successful integration and a clear strategic path forward. This quarter's performance reflects the concerted actions taken over the past few quarters, with a unified team driving operational efficiencies and market expansion.

For Q3 FY26, Viyash Scientific reported a consolidated revenue of INR 858.4 crore, an increase of 10.9% year-on-year. The Adjusted EBITDA saw a substantial surge of 64.4% year-on-year, reaching INR 185.4 crore, with the EBITDA margin expanding significantly to 21.6%. This strong operational performance translated into a PAT of INR 48.5 crore, up 15.5% year-on-year, even after accounting for exceptional merger-related costs and a one-time MAT credit reversal. For the nine-month period of FY26, the company's revenue climbed 11.9% to INR 2,500.4 crore, and Adjusted EBITDA grew 58% to INR 502.4 crore, maintaining a healthy margin of 20.1%. The 9-month PAT soared by 230% to INR 158.3 crore, underscoring the sustained improvement in financial health.

Segmental Performance and Strategic Focus

The company's growth was broad-based, with Formulations revenue growing a strong 20% to INR 480.9 crore. This segment's performance was bolstered by strategic initiatives in Europe, including market expansion with direct field forces in Spain, Benelux, and Sweden, along with new distribution agreements. The company also reinitiated development and promotion activities in the animal business, leveraging its EU-approved sites in Spain and Turkey to extend product reach across Europe. Emerging Markets, particularly Turkey and Brazil, also showed strong performance, with plans to expand into Mexico and Southeast Asia.

The API segment, while growing at a modest 2.9% to INR 365.8 crore in Q3 FY26, is a core area for Viyash. Management attributed the lower growth this quarter to timing issues with some CDMO contracts being pushed to the next quarter. However, the company is optimistic about the future of Animal Health APIs, expecting very fast growth next year. The focus remains on continuous new product development, efficiency improvements, and backward integration to enhance margins. The company is also strategically shifting its API market focus from low-end markets like India, Bangladesh, and Pakistan to expanding developed markets.

Financial Summary Table

Strategic Initiatives and Future Outlook

Viyash Scientific is strategically positioned to capitalize on two major growth levers: the expanding generics market in Animal Health, particularly Companion Animals, and the API patent cliff coupled with CDMO opportunities. The Companion Animals segment, with its increasing pet ownership and low generic penetration (15-16% versus human health), presents a significant long-term opportunity. The company has signed an exclusive distribution agreement with Boehringer Ingelheim for companion animal products in India, with distribution set to begin in February.

In the CDMO space, Viyash is actively pursuing opportunities, leveraging its strong R&D capabilities and manufacturing infrastructure. The Indian CDMO market is projected to grow substantially, from $23 billion in 2024 to$45 billion in 2029. Viyash expects to generate INR 70-90 crore from CDMO this year, with commercialization of new projects starting next year and full commercialization anticipated in 3-4 years. The company's R&D strength, with over 200 members and specialized labs, provides a competitive edge in product development and process safety.

Management Execution and Financial Discipline

Management has demonstrated strong execution and financial discipline. The net debt-to-EBITDA ratio has significantly improved to 0.38x, down from 1.2x in Q3 FY25, reflecting successful pre-closure of high-cost debt and a strengthened balance sheet. This robust financial position provides the headroom for future organic investments and selective mergers and acquisitions. The company also transparently acknowledged one-time exceptional costs of INR 41.3 crore related to merger execution and a tax regime change impact of INR 7.7 crore, which affected the quarter's PAT.

Furthermore, Viyash has shown a willingness to course-correct, as evidenced by the strategic shift in its US formulation business to focus on complex generics and backward integration. The divestment of the Mangalore testing site, completed on December 31, 2025, is expected to yield annual savings of at least a million dollars, showcasing proactive asset management. Management is confident in maintaining 20% EBITDA margins and aims to achieve INR 4,000 crore revenue by FY27, a year ahead of its previous guidance.

Conclusion

Viyash Scientific Limited's Q3 FY26 results underscore a period of successful integration and strong operational momentum. The company's strategic focus on high-growth segments like Companion Animals and CDMO, coupled with robust R&D capabilities and disciplined financial management, positions it for sustained growth. With a strengthened balance sheet and a clear vision, Viyash is well-equipped to capture emerging market opportunities and deliver value to its stakeholders in the coming years.