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Viyash Scientific Q4 FY26: Margin expansion, debt reduction, and an integration story that is finally showing up in the numbers

Viyash Scientific Limited, formerly SeQuent Scientific, ended FY26 with a sharper financial profile and clearer operating momentum. In Q4 FY26, the company reported revenue from operations of INR 920 crore, up 19.1 percent year on year. Adjusted EBITDA reached INR 200.1 crore, rising 63.9 percent, and the EBITDA margin expanded to 21.7 percent.

For the full year FY26, consolidated revenue came in at INR 3,420.3 crore, up 13.8 percent over FY25. Adjusted EBITDA rose to INR 702.5 crore, up 59.6 percent, and margins expanded to 20.5 percent. Profit after tax for FY26 was INR 224.6 crore compared with INR 15.8 crore in FY25. Management positioned FY26 as a “transformative year”, with the combined entity now operating on a unified platform across facilities, operations, and corporate functions.

Q4 and FY26: The margin story strengthened

The operating leverage is visible in the consolidated P&L. In Q4 FY26, gross margin improved to 55.1 percent versus 52.8 percent in Q4 FY25. FY26 gross margin expanded to 54.3 percent from 51.1 percent in FY25. The company attributed profitability improvement to integration benefits, better asset utilization, and cost control, while also navigating geopolitical and maritime disruptions.

Formulations continued to outgrow APIs. In Q4 FY26, formulations revenue rose 28 percent year on year to INR 499.1 crore, while API revenue increased 5 percent to INR 383.6 crore. For FY26, formulations revenue grew 18 percent to INR 1,865.7 crore and APIs grew 8 percent to INR 1,490.6 crore.

Revenue mix: Formulations drove growth, with Europe and Emerging Markets leading

The investor presentation provides a region-wise split within formulations. For FY26, formulations revenue of INR 1,865.7 crore was distributed across Europe (INR 668.2 crore), Emerging Markets (INR 630.5 crore), the US (INR 426.6 crore), and India (INR 140.5 crore). On a full-year basis, API revenue was INR 1,490.6 crore.

Management addressed why API growth looked more muted in FY26. It said the company had deliberately optimized product mix by pruning lower-quality or commodity intermediates and shifting toward higher value APIs and forward integration into formulations where possible.

Integration and synergy execution: management expects further benefits

A central theme of both the presentation and call was that merger integration is complete and the next phase is synergy realization. Management stated that annualized synergies were tracking at roughly INR 50 to 60 crore. It also said that over the next 12 to 18 months, synergies could rise to INR 125 to 150 crore, with a portion dependent on operational and regulatory execution such as approvals, filings, and capacity transfers.

The synergy workstreams described in the presentation spanned R&D, manufacturing, sales, and shared services. The company highlighted that API R&D is fully integrated and cited progress such as six new animal health products developed or validated and five cost improvement projects completed. In manufacturing, it reported validation of six intermediates at Viyash sites that were previously externally sourced, and an EU-approved new production block that has already started commercialization.

Business updates: companion animals, CDMO, and regulatory cadence

Operationally, Viyash reported a steady cadence of audits, approvals, launches, and filings. For Q4 FY26 it disclosed two regulatory audits and 36 customer audits. It also listed multiple regulatory approvals for APIs, USFDA approvals for DFDs, new API launches across regions, and new filings.

On CDMO, management described three models, with current momentum strongest in life cycle management and specialty partnerships. It stated it works with 8 to 10 innovators across human and animal health. Management also said it expects the innovator life cycle management business to grow 40 percent in FY27, on a base cited around INR 200 to 225 crore.

Companion animals came up repeatedly as a multi-year growth lever. Management said FY27 would be a platform-building year, with investment in R&D, manufacturing infrastructure, and front-end expansion, with Europe and India as key focus regions.

Balance sheet: leverage reduced sharply, but minority interest matters for PAT

The balance sheet improvement was a key positive in the presentation. Net debt reduced to INR 166.1 crore, and net debt to LTM adjusted EBITDA dropped to 0.2x compared with 1.0x in FY25. The company also noted that finance costs reduced due to the run-down of debt.

Investors should also note the impact of minority interest on reported profitability. In the call, management said the company owns 60 percent each in the US formulations subsidiary and the Spain subsidiary, and that about 20 percent of PAT is attributable to minority interests. It disclosed indicative FY26 revenue scales of about INR 400 to 425 crore in the US business and about INR 550 crore in Spain.

Takeaways

Viyash ended FY26 with a visible step-up in profitability, steady sales growth, and sharply lower leverage. The narrative also evolved from integration to execution, with management pointing to synergy realization, product pipeline progression, and targeted investments in complex products and companion animals.

For FY27, the company indicated confidence in sustaining margin levels while also investing in R&D and capacity. Key variables to track will be how quickly additional synergies translate into P&L, whether API growth accelerates with new approvals, and how the companion animal and CDMO initiatives scale from strategic intent to consistent revenue contribution.