Viyash Scientific (512529) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 saw continued business improvement, with consolidated revenue up 6.6% year-over-year to INR 3,686.5 million and the announcement of a strategic merger with Viyash Life Sciences to create an integrated global pharmaceuticals platform with enhanced R&D and operational capabilities.

• The Board approved unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024, and monitors the business as a single Pharmaceuticals segment.

• The combined entity is positioned for accelerated growth, improved margins, and expanded market presence in high-growth segments.

• Strong double-digit growth in formulations across most geographies, while the API business was slightly below plan due to shipment timing.

Financial highlights

• Q2 FY25 consolidated revenue was INR 3,686.5 million, up from INR 3,459.7 million in Q2 FY24; EBITDA pre-ESOP rose nearly 70% year-over-year to INR 447 million.

• H1 FY25 revenue increased 11.7% year-over-year to INR 7,589 million; H1 EBITDA pre-ESOP up 160%+ year-over-year to INR 930 million.

• Q2 FY25 PAT was INR 63.4 million, reversing losses from the previous year; total comprehensive income for Q2 FY25 was INR 256.3 million.

• Q2 EBITDA margin pre-ESOP improved by 452 bps to 12.1%; gross margin in Q2 increased by 190 bps to 47%.

• Net debt to EBITDA improved to 2.3x as of 30 Sep 2024 from 3.55x as of 31 Mar 2024; net debt remained stable at INR 3,774 million.

Outlook and guidance

• Confident of continued double-digit growth in both constant and reported currency across all markets, with the merger expected to complete in 12-15 months pending regulatory approvals.

• Turkey market stabilized, supporting volume growth and new product launches; CDMO business expected to contribute meaningfully in the medium term.

• PAT expected to accelerate post-merger, with FY26 seeing most incremental margin and EBITDA gains flowing to PAT.

• No financial impact of the amalgamation scheme yet recognized.