Ladies and gentlemen, good day and welcome to the Q3 FY 2023 Earnings Conference Call for Vimta Labs Limited, hosted by Nirmal Bang Instit utional Equities Private Limited. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference, please signal an operator by pressing star then zero on your touched-on phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Bhavya Sanghvi from Nirmal Bang. Thank you and over to you, sir.
I would like to thank the management of Vimta Labs for giving us an opportunity to host this call. Today, we have with us the senior management of the company represented by Ms. Harita Vasireddi, Managing Director, Mr. Satya Sreenivas Neerukonda, Executive Director, Mr. Narahari Naidu, Chief Financial Officer, and Ms. Sujani Vasireddi, Company Secretary. I now hand over the call to the management for opening remarks. Post which we can take questions from the participants. Thank you and over to you, ma'am.
Thank you. Good morning, everyone. Thank you for joining us on our Q3 results conference call. We are pleased to have this opportunity to update you on our business performance and answer any questions that you may have. I will share a few financial and operational highlights and updates for the quarter and also nine months. Then our CFO Narahari will get into little more detail on the numbers side. Overall growth for the nine months ended December 2022, we achieved a consolidated total income of INR 2,391.5 million. This is a growth of 16.5%. Q3 revenues are slightly lower when compared to previous quarter. This is majorly because a few projects have slid into the next quarter and hence the slight dip in revenue. We think of this as a small aberration.
For the quarter ended December 2022, we achieved a consolidated total income of INR 785.1 million, which is a growth of 15.4% when compared to Q3 of previous year. The outsourcing markets in year 2022 for the industries we serve, they remained very strong and particularly good growth momentum led by the pharma and food industry. Future outlook of these markets is also very positive. Our reach into all these markets is also progressing, and we continue to have strong order book and pipeline. On the operations side, we have successfully completed a U.S. FDA inspection of our clinical research operations. We also went through a good WHO inspection of our pharma analytical operations. In Q3, we continue to invest in newer analytical technologies and also capacity.
The facility expansion project that we have undertaken at our life sciences facility to augment the future growth is progressing as per schedule. We continue to channelize our efforts and to achieve both short-term and long-term growth goals and remain confident on the results. Normally, we said we told our investors that we would connect with you once in six months, and we will make that, you know, quarterly connect in case there is a need for us to clarify, you know, a few things for you. That's the reason we have taken up this Q3 results. Results are slightly lower, but we are happy to address any questions or concerns that you have. With this, you know, opening remarks, I will now conclude and request Narahari to please take over.
A very good morning, everyone. Thank you, Bhavya, for organizing the call. Thank you all for joining us for our Q3 results performance call. We are pleased to take you through the consolidated financial performance of the company for quarter three, followed by the nine-month year ended December 2022. Our consolidated revenue from operations for quarter three of FY 2023 stands at INR 773.8 million as compared to INR 673.4 million compared to the same quarter last year. W e gave a growth of 15.2%. This is excluding the revenue from service transition arrangement. Profit before tax for the quarter stands at INR 140.8 million, which is a slight decline of 9% compared to same quarter last year, majorly due to increase in P&L expenses.
Overall, our spend towards travel, business promotion has increased during the quarter. Increase in employee-generated expense commensurate with increase in revenue from operations and also includes the amortization of lease-up expense of INR 9.4 million during the quarter. Moving on to nine months ended December 2022 performance. Revenue from operations for the nine months ended December 2022 stands at INR 2,363.7 million as compared to INR 2,041.9 million in the corresponding nine months ended FY 2022. This translates a growth of 21.9%, of course excluding the revenue from service transition arrangement.
EBITDA for the nine months stands at INR 735.1 million, recording a healthy growth of 26% on a YOY basis. The depreciation and finance for the nine months ended December 2022 has increased, mainly due to the capitalization of our electrical and electronic testing operations during quarter four of the previous financial year and addition of land equipment during the current year. The company is having a positive cash balance of about INR 256 million at the end of December 2022. The profit before tax for the nine months ended December 2023 stands at INR 484.4 million, a growth of 22.8% compared to the corresponding nine months ended December 2022. With this brief summary, I will hand it over back to the operator, and we'll be happy to take any questions. Thank you.
Thank you very much. We will now begin with the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Viraj Mehta from Equirus PMS. Please go ahead.
Thanks a lot, ma'am, for your time. Ma'am, can you discuss segment-wise how is the traction that you are seeing? Also, if you can talk about the government projects, the scale up. Are we seeing 50,000 samples? Where are we in that journey? If you can talk a little bit about both of these things.
Sure. Coming to segment-wise traction, the food and pharma segments are doing very well. Especially food, I think, is progressing very well for us. Electronic testing, we have had very good response from the industry. The variety of industries that we have reached out to have been very encouraging for us, and we are quite optimistic on growing the electronic testing division as per our projection. Coming to diagnostics, we lost a little bit of ground last few quarters. We have now begun to, you know, gain back a little bit of that ground, but it still remains to be a tough market. Our environment division is doing well. Year-on-year, their growth is quite satisfactory. Yeah. Diagnostics. Yeah. That covers all our business verticals.
Coming to the National Food Laboratory, the revenues remain consistent. We were expecting the inflow of samples to grow. The government is taking a little bit of time to, you know, correct that for us. We still await their action on that.
What will be our rough daily samples that we are doing at this point?
I think that is a privileged number. We are not authorized to share it by our government partner.
Sure, ma'am. Thank you. Best of luck.
Thank you.
Thank you. We have the next question from Dixit Doshi from Whitestone Financial Advisors Private Limited. Please go ahead.
Yeah, thanks for the opportunity. My first question is regarding the growth. You mentioned in the opening remark that Q3 revenue compared to the Q2 was slightly lower also because of the some projects moving into the Q4. How do you see, considering the order book and all, how do you see the growth in, let's say, FY 2024? Just a related question to that thing. Earlier we had a target of, you know, around INR 500 crore by FY 2025. Let's say if we mostly we will be around INR 300 crore-INR 320 crore by end of this year, d o you want to revise that target? Hello?
Good evening ladies and gentlemen, the line for the management seems to have disconnected. Please stay on the line while we reconnect with the management. Ladies and gentlemen, thank you for your patience. We have the line for the management reconnected. Mr. Doshi, if you could, please repeat your question, if we could, yes.
Thanks for the opportunity. My first question is regarding the growth. You did mention that Q3 there was slightly dip over Q2 in terms of revenue, also because of some slip over of the, some contracting to Q4. Considering the current order book and everything, how do you see growth going forward? You earlier our guidance was around INR 500 crore top line by FY 2025. This year we may end up at around INR 300-320 crore. How do you see? Do you want to revise that target or you still feel optimistic about reaching that target?
Our INR 500 crore by 2025, we have not specifically said by FY 2025. We want to take the spectrum now between 2025 to 2026. We won't be revising that as such. And we are confident that we will reach that target. The projection, our estimates of next year is that we will be able to continue the good growth rate that we have experienced in the last couple of years. That will continue into FY 2024. If you have been following the earnings calls, you may recall that I've talked about some capacity constraints. Ideally the new capacities that we are adding now should have been added by now, but for the COVID situation that we experienced two years ago. But for that, you know, there is actually no change.
We will be adding those extra spaces and capacities by end of 2023. That will further help us, you know, help us stay on the target. Order books are strong.
Okay, thanks. not holding for you any any number, but considering, let's say, whatever order book or, like you mentioned, that we are also expanding into the export market and the new capacity is coming. Is it fair to assume that on a medium-term basis, 15%-18% kind of growth is still possible?
That's the number we have been having, and we are very optimistic that we'll be able to maintain those numbers.
Okay. Now in terms of diagnostic business, obviously, the competition is high, and we are not performing as per our own expectations. How do you see it going forward? You were earlier mentioning that we are talking with some players for outsourcing their lab setup business, lab setup also. Anything on that?
Look, in the diagnostics we have made progress. We have been pursuing the hospital laboratory management and also independent laboratory operations management. We've had a good success there. We continue to pursue that strategic line to grow further business.
Okay, fine. That's it from my side. Thank you.
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Aman Vij from Astute Investment Management. Please go ahead.
Good morning, ma'am. My first question is on this few projects which have slided in the next quarter. Could you quantify the amounts?
It will be about INR 2-3 crores.
Okay. Then that is not substantial, right? Still, we were expecting Q3 to be much better compared to Q2. Any other segments which grew less than what you were expecting?
No particular segment as such. We have had, you know, slow movement. Wherever we have projects, we have had slow movements. Like in pharma, there was a little bit of flatness. Now we are shifting more towards large projects. A little shift towards the end of the quarter can really change the numbers there. Similarly, in environment, usually Q3 is low, but Q3 is very strong. There again we've had a few projects shift. The impact was only to that extent. Yes, we were expecting a better Q3. Again, like I said, it is a little slow because of shift of projects and also capacities. We have been continuing to add those capacities. The receipt of, you know, technologies, the installation, qualification, all that got slightly delayed.
We had these regulatory inspections, couple of them, that also slightly lowered the operation speed during those few days. All that cumulatively had a slight impact on Q3. Nothing concerning in my opinion.
Ma'am, we have done quite well with the inspections. We have successfully done that. Going forward, say in Q4, do you expect the run rate to continue, or do you think we can scale on that further, especially on the margin side, ma'am? Margins we were expecting that 30% kind of thing will be new base. This quarter it was lower after many quarters. If you can talk about the same.
Sorry, the voice was very blurred. I couldn't really understand the last few sentences. Can you repeat?
Yeah. Ma'am, I was saying that Q3 we understand there was delay, there was inspections. Because of that, maybe our business we couldn't fully utilize our capacities. Q4 things, are they normalizing? Are we seeing the good growth that we have continued for last couple of quarter? On margin side, we were expecting that 30% kind of margin will sustain, which has sustained the last couple of quarter, but this time we saw a dip. If you can talk about Q4, will things normalize or we will still for 1, 2 quarter, we might face some pressure on margin also?
Q4 we expect to see a step up both on the top line and also we expect that that will give a commensurate bottom line, step. We are quite positive about, Q4.
Sure, ma'am. Coming to the segment wise. On electronic testing, segment, if you can talk about what is the number of customers today and how many of these are MNC clients. What is the employees working in this division as of today?
The number of customers, we are slowly touching, about 100, some small, some big. We work with large organizations, MNCs. I won't be able to take any names, but at least 10%-15% of our clients are very large companies, both MNCs and also large organizations within India.
Mm-hmm. What is the number of employees who are working in this division as of now?
Just for electronics?
Yes, yes. This testing. Electronics and electrical testing.
The team is very small. As of now, it's just eight people.
We are expecting it to scale this quarter or maybe next year?
Can you repeat please?
We are expecting this team size to scale this quarter or next year, as well as if you can talk about the utilization level, because we were expecting to start the second shift?
We are already utilizing a part of the second shift. The numbers we will add as we need more resources.
Sure, ma'am. Coming to the food side, ma'am. The accreditation was done last quarter, and I think we were supposed to have this joint committee for allotment of higher samples. Has that meeting happened? If that meeting has happened, delay is for 1 quarter, or there can be further delays for ramping up? Because now we have all the accreditations required.
Yeah, the meeting has happened. Unfortunately for us, as soon as the meeting happened, the CEO has also changed at the FSSAI. We are facing those issues there. Hopefully there'll be a review again after, you know, another quarter. We keep pushing from our side. Government takes time.
Sure, ma'am. On the pharma side, we did a very successful this U.S. FDA approval. If you can talk about, the order book has been growing at 20%+ . Is it still growing that fast? Also, what we understand in the next one, two years, lot of drugs are getting off patent. Will this lead to a strong tailwind for all the studies, if you can talk about the same?
Coming to drugs coming off patent, there is going to be a patent cliff around 2024 to 2025, and this is largely related to large molecules. We see that in the way our order books are also slowly now changing. Primarily our business has been focused on small molecules, but we also have a large molecule capability, and we see the demand for large molecule capability increasing on both the, you know, preclinical end and analytical end and also I think that actually the clinical research end.
Ma'am the order book growth, is it still that strong of 20%+ like you have highlighted, in this division or has it slowed down little bit because of some recession and global slowdown?
Which division? Sorry, your voice is not at all clear. I'm struggling to understand.
Ma'am, this will be better. On the pharma division.
Yeah.
I'm talking about the order book historically, last couple of quarters has grown at 20% plus kind of number. The order book, not the actual amount. Is the growth still that strong or the recession is impacting the pharma industry any way?
We don't see any negative impact on our order book. They remain strong.
Sure, ma'am. Final question from my side. On this electronics and electrical testing side, ma'am, we have recently got the CAB status under this Telecommunication Engineering Centre. Will this help the telecom sub-segment, the testing segment grow significantly in the next couple of quarters? What is the current breakup? Is it mostly telecom as of now? Is it non-telecom? If you can talk about the same?
The division is still in infancy stage. Too early to break it up. Basically our EMI EMC capabilities span a wide range of, you know, products. Telecom is just one of them.
Okay. We were expecting to do the second level of CapEx. Will that happen in FY 2024 or do you think we, it will only happen in FY 2025? The first CapEx we have done INR 25 crore odds in this division.
There will be a minor amount of CapEx that will go into it because now, we are still in our learning phase here. The small tweaking of our capabilities will need a certain investment year after year. It depends on, you know, what are the customer requirements, what are the products that are coming up, in the R&D pipelines across various industries. That tweaking, that CapEx investment will be continuous for us.
Sure, ma'am. I have more questions. I'll come back in the queue. Thank you.
Thank you. The next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.
Thanks for the opportunity. Ma'am, I just wanted to, you know, have more clarification on the guidance of reaching INR 500 crore. What we are now saying is that we are targeting to reach that kind of number by FY 2026. Is it like that?
Sorry, can you repeat your last sentence?
What I'm asking is the INR 500 crore revenue that we were aspiring to reach, are we now targeting to reach that number by FY 2026?
I want to be clarified that our goal 2025, when I announced that goal, I didn't specify a financial year because we wanted the flexibility to achieve it within 2025 or take the, you know, 2026 up to March. I want to retain that flexibility, please. Please don't be rigid over there. It's just a few quarters here and there. We are very strong on, you know, targeting that number. Our confidence is very good on that number.
Sure. Ma'am, on any update on the CapEx when the new facility is expected to come on stream for us?
The new facility, we hope to finish all the infra works by sometime between October to December. As soon as that is done, you know, we'll be moving in our instrumentation there, qualifications, all that will take about another three months' time. By end of, we'll certainly be ready to start operations there anytime between January to March of next year.
Sure. Will we also require, you know, some of the regulatory approvals, the U.S. FDA and other regulatory authorities approval or it will be part of our existing facility?
We won't need any other approvals. It's all in the same facility.
Sure.
Not needed.
Okay. Okay. The GMP food lab that we have, you know, have we reached breakeven there or, you know, we are hardly making any profit or?
Mr. Gupta, the line has a disturbance. You're not very audible or clear, sir.
Sorry. I'll try to go to a better reception area. Is it better now?
It is, slightly but not as, clear as it should be, sir.
Hello. Is it better?
Much better, sir. Please go ahead.
Sure. I was asking about, you know, this, the GMP food lab, ma'am. Have we reached breakeven there or, you know, we are enduring some manual losses because the scale-up has not happened as per our expectations?
The infra P&L we look at one. We don't break it up and look at, each one separately.
Sure. Sure. Do you expect that, you know, given the kind of, you know, some teething issues, mostly from the government side that you have faced in the current year, by Q2 of FY 2024 will be hopefully all these government issues will get resolved and we should see ramp-up in the lab. What is our expectations from this lab in terms of growth for next year?
I'm really hoping that we will have improvement in the number of, you know, sample volumes being allotted to NFL. We are working, or pursuing rather the government, quite intensely on this. I hope something will happen.
Sure, ma'am. You had highlighted that, you know, FY 2024, you highlighted that food, except for GMP, is doing pretty well for us. If you can highlight, you know, what is happening on that side and, you know, what is fueling our growth on the food, excluding GMP lab.
Any co-comment here, Ankit?
Yeah. I was asking about food division doing well for us. Ma'am highlighted that, you know, food is doing well for us and, you know, if you can talk about what is fueling this growth and how do you see growth in the segment for us over the next few years.
Food is doing very well. In fact, the last five, six years, food has seen a steady growth. Year-over-year, you know, the growth has been good. The number of client base that we are working, the number of projects that we have been winning is quite satisfying for us. We think that food will continue this growth even into the next four, five years comfortably.
Sure. You know, we were expecting that, you know, apart from pharma, two other segments which will drive our growth will be food and diagnostic. Diagnostic we do understand the kind of challenges we are facing, but are we still hopeful of food touching this, crossing INR 100 crore kind of revenue in FY 2024 or 2025?
That's definitely our goal. INR 100 crore number is definitely our goal. I think we are progressing very well towards that goal.
Sure, sure. Just last question on the margin side. You highlighted that, you know, this quarter was largely had some one-off costs and the revenue also got a small portion of revenue also got shifted to FY 2024. Do you expect, you know, FY from at least in FY 2025, 2024 we'll be back to 29%-30% kind of EBITDA levels?
Okay. Yeah, as you rightly said, you know, the Q3 has been an aberration. We expect our EBITDA margin to come back in line with Q2 of current financial year.
Okay. Quarter four also we'll see some pressure on margins or we'll see improvement?
We are not forcing any pressure on margins. We are seeing a step up from quarter three.
Sure. Okay. Okay. Thank you, ma'am. Wish you all the best. Thank you.
Thank you. The next question is from the line of Aman from Aman Investment. Please go ahead.
Am I audible, ma'am?
You are audible, sir. You can go ahead, please.
Yeah, sure. Yeah. First of all, congratulations on the sustainable result. Ma'am, I had couple of questions. First, with respect to crop care in our agricultural division, as we do various market research and scanning of the group, do you believe the newly jargon word which is going on is Nano Urea? Will it be more efficient than the traditional fertilizer bag which the government is providing subsidy for, and will it also reduce the subsidy? Also, are we seeing samples and testing coming from Nano Urea as well? And also can it be made commercially viable?
Our crop care business mostly is from overseas and, honestly, we have not felt any impact of the local regulations on our business from these companies.
Okay. Okay, Ma'am. Ma'am, also our newly added divisions of electronics and electronic toys. Recently India has turned to be the next exporter of traditional toy industry and companies such as Hasbro, Hamleys also have come into picture because of the rising raw material prices. Do you believe that the toy industry is also coming into play like electronic cars and other things? Are they coming for samples? Also if they are coming, are they coming from small players like SMEs and MSMEs or through large players who are providing these gadgets, their machinery, technology and other testing devices to be tested in our labs?
We see the R&D, you know, flourishing in the electronics industry. It's there's a lot of hype around it, and we do sense that energy in the industry. There's a lot of startup ecosystem also. Our samples or our, rather our customers are both from these small companies and also large companies.
Okay, ma'am. If you can just, I think be little bit numbers specific, how do we see? Like are the numbers increasing or they are sustained like previous quarters?
This is a very new business for us. The numbers are very small, so it's too soon to comment on growth. I think we should wait to see how this pans out for us the first few years and then get into these conversations.
Okay. Ma'am, also, are we looking into revaluing our fixed assets? Most of our fixed assets have been in historical cost for more than 10 years. Are we looking to revaluing whether it be land or plant and property to just strengthen our financial positions the coming quarters?
The replacement is an ongoing activity. Whenever we feel that there is an asset which is obsolete, we generally replace. Considering the historic trend of replacing fixed assets with the amount of depreciation, that we expect to continue. This is excluding our specific project CapEx plans.
Okay. Okay. Like in near term, you are just looking to maintain it at the historical cost if I'm not wrong?
Yes.
Okay. Sir, and also are we, as mentioned by ma'am in last, investor call, and also, thank you for organizing this because usually Wimta has half-yearly calls and this one they have conducted it to be quarterly as well. I hope this continue in the further quarterly calls as well. Ma'am, I had mentioned that we have new collaborations in diagnostic sector as well. Are we seeing in terms of it to be, translating in terms of revenue and profitability to be coming in coming quarters?
First, yeah, coming to the question around calls, our intent is to connect at least once in six months. If there is a need, you know, with respect to the results or anything with respect to our operations or business, then we will come for a quarterly call as well. Coming to diagnostics, we have been able to establish a few good partnerships. We have some HLM/LOM currently being operational. Now these are new cities for us, so we are in the process of setting up our business development and sales activity there. It will take a little time for us to mature or actually make a good progress in these markets. We hope that will happen in the coming quarters.
Okay. Ma'am, going forward, are we looking to raise equity in terms in the markets, whether it be rights issue or potentially to just finance our CapEx in terms of electronics? Because those sectors we as an investor or rather as an analyst, we feel that company can do even well because EV is coming also in a big picture, electric vehicles, so their components also have to be tested. We are little bit export wise we are equipped, but with technology and CapEx wise we are not till now. Do we look forward to just raise enough sufficient funds to just match up with the demand with other EV space in testing business?
As of now.
In specific to automobiles, ma'am. In specific to automobile sector.
Okay. We do have current capabilities to test, electrical vehicle components. We are actually doing a few component testing already. Right now we have, one chamber to do these testings. In the next year, you know, as, depending on the demand, we could even add another chamber.
Oh, okay.
Um, we-
Ma'am, to be specific, ma'am, if you can be specific which component? Is it battery or is it the resistors or which particular component? Or are we doing the whole EV vehicle as a whole? Whether it's a car or a scooter or a motor vehicle?
I wouldn't know what components they are.
Okay.
We are not that technical. We are getting components from two-wheelers.
Two-wheelers. Okay. Two-wheeler. Okay, ma'am. Ma'am, as mentioned by you, this whatever we have seen little bit of beat out, you even mentioned was the delayed billing and other. It has been shifted to either quarter four or the coming financial year. Do you estimate that the revenue for the fourth quarter will be in the range of INR 90 crore-INR 100 crore? Just, not to be very specific with the figures, whether you are assured of that number which I'm quoting.
I've never made those predictions.
No, no, ma'am, you have not made. I'm just giving you a number which you can, which you feel that the company will be able to achieve, provided H2 is always better than H1.
Yeah, I won't be able to give a specific number.
Okay, ma'am. H1, I think each quarter we have done roughly about INR 70-78 crore of turnover. As H2 will always be better, so we are expecting in the line H2 be INR 90-100 crore of quarterly turnover. Okay, ma'am. That's, that's one. Ma'am, the last question, and I'll come again later. Do you feel that, as we are in the part of this market research and scalability also, do you see it financially viable? Also new plans are coming. Like, have you seen any testing samples which have come, which are totally different from the industry which we are in, but they have potentials and we are planning to venture it into. Do you feel that these type of products are coming in?
Can you be a little more specific, please?
Ma'am, yeah. Okay, ma'am. We are into crop care and agricultural division to be specific. Do you feel that any product which is coming which can be more in the terms of cost in manufacturing it, and also it's more sustainable, efficient in terms of the current what we are getting supplied in the market. Do you feel any substitutes or alternatives are coming to the products for testing, and they are commercially viable in our plant as well?
We test hundreds of products, I don't think I'll be able to comment on that question at all.
Okay. Okay, ma'am. Ma'am, I just wanted to get your opinion. What do you feel as we are into contract research and manufacturing pharmacy, what do you feel about packaging sector, ma'am? Do you feel any alternative materials to like more sustainable packaging apart from paper and cardboard, which we already have? Or plastic which is more degradable in nature is coming up? Or what do you feel about the packaging sector as a whole? Whether we are seeing a transition from totally single-use plastic to renewable plast. What is your opinion on plastic sector as a whole? Packaging sector to be specific.
We don't do a lot of plastic testing. We do little bit of testing with respect to pharmaceutical product packaging and food product packaging. That's a very small component of our testing activity, so I won't be able to comment or answer your question.
Okay, ma'am. Ma'am, just on the financial part, if you can just give me what is the total loan book standing as on date of 31st December?
Can you come again? We want to understand the outstanding.
Yeah, outstanding loan book. Totally a non-current asset. Non-current loans to be specific.
We are close to, you know, INR 25 crores of outstanding in our books as on date of 31st December 2022.
Okay. Also can you give the split of unsecured and secured loans?
Yeah. Everything is secured for us, so there is no unsecured loan within the INR 25 crores.
Okay. That is nice.
There is a component of INR 5 million which is unsecured.
Okay.
The outstanding is secured.
Okay. those are from the promoter side, those loans are secured?
These are from the directors.
Okay, from the director side. Okay, ma'am, I'll just come back again for the questions. Thank you.
Thank you. The next question is from the line of Sunil Kothari from Unique PMS. Please go ahead.
Thanks for the opportunity, ma'am. Really, it's a really good discussion for having call on a little, say little bit lower quarter. You wanted to clarify. It's a really great job you have done. No, my larger question is I'm here since last three, four years following you, and I heard your calls, and we are very comfortable with your guidance and your business appraisal and all these things. Wanted to understand during last, say two, three years, you must have expected some segment to do maybe some numbers, some better performance. Some must have done better or some below your expectation. Would you like to comment on the segmental larger picture? How do you see opportunity? Where you feel you have challenges? Where you require to overcome those challenges?
That would be really great help.
Thank you for that question. Other than diagnostics, now we are into food, pharma, clinical research, pre-clinical, medical electronics, medical environment. Other than diagnostics, you know, we are optimistic about all other services. Only diagnostics has been two feet forward and two feet backward. Retaining our current position there itself is a huge challenge, and we are staying there very strong. Ideally we should have made some progress there, but we continue to push. We are not giving up our efforts in any of our service areas. This also we will keep, you know, fine-tuning our strategies as per the competition that we see around us.
Overall, you feel that whatever, expectation you built and your capability you have built, more or less, other than diagnostics, things are coming as per plan.
Yes. Diagnostics we were hoping will take us a little bit faster towards our, you know, INR 500 crores. Now that is not growing at the speed that we are expecting it to grow. We are able to leverage our other very mature, you know, services. We are able to push them more.
Very logical. Ma'am, you mentioned that there is some capacity constraint, and I think that was there. That is or that was there even since last almost five, six quarters. We are in the range of ±INR 75 crore, INR 2 crore-INR 3 crore, whether it's a 72 or 78 something. Capacity, I think you must be overcoming now. By when you feel that capacity will not be challenge, but you have to capture more business from the customer?
Yes. We in spite of having capacity constraints, we continue to remodel our existing facilities to squeeze more in the same space. That effort has been going on for us in the last, almost for one year. That will continue for another 9-10 months because we will have our new facility soon with us, by, you know, early 2024. Capacity-wise, coming to, you know, pre-clinical, that's a huge need that we see and, we will be addressing that need with the new facility. Also for analytical services, pharma analytical and even for food actually, we see a need to expand our capacities, and that also will be fulfilled with the expansion that we have taken up. This expansion has been taken up with a long-term vision.
It's at least we think the capacities or the space will be good for us, at least for the next five years. The growth will also happen commensurately.
Right. Ma'am, regarding CapEx, if you can disclose, first 9 months capital expenditures for maintenance and capacity, and if you can share numbers for next year?
Next year's plans we are, you know, we have not yet finalized. We are in the process actually right now. I have that information during the May conversation that we will have. This year's numbers, here I'll ask CSO to share those numbers with you.
For the nine months ended December 2022, we have incurred close to INR 27 crores of CapEx. Out of this, about INR 22.5 Crores we invested in lab equipments.
Okay. That is called maintenance CapEx?
Please come again.
That INR 22.5 Crore is related to maintenance CapEx or it's a capacity addition CapEx?
It's a combination of replacement and capacity additions.
Oh, great. Great. Ma'am, just last question. Recently Eurofins has announced some big lab at Genome Valley only. Do you feel this is a competitive expanding scenario or is it because opportunity is increasing, size is increasing of opportunity, that is the reason? How you analyze Eurofins', this new announcement?
Hyderabad has become a very hot hub for pharma industry and also the related supporting industry. I think the attractiveness of Hyderabad especially is very strong. That's why you see, you know, players like Eurofins coming here. That will definitely bring the competition closer to home. Their services are not an exact match to ours. There are some overlap. Wherever there is an overlap, yes, we have to stay little bit, especially on the, you know, disclosed categories.
Good. Mm-hmm. Great, ma'am. Thanks a lot. Thank you very much.
Welcome.
Thank you. We have the next question from the line of Ranvir Singh from Nuvama Wealth. Please go ahead. Sorry to interrupt. sir, the line for you is not very clear. You're not audible. If you could please use-
Yeah. Hello?
Yeah.
Yeah.
Go ahead.
ing contract research and testing organization, has announced its financial results for the first quarter of the fiscal year 2024. The company reported a revenue of INR 70.5 crore for Q1 FY24, marking a 10% increase compared to the same period last year. The growth was primarily driven by strong performance in the food and agriculture testing segment, which saw a 15% year-over-year increase in revenue. The pharmaceutical testing segment also contributed positively with a 7% growth. EBITDA for the quarter stood at INR 18.2 crore, up 12% from Q1 FY 2023, indicating improved operational efficiency.
The net profit for the quarter was INR 9.5 crore, a 14% increase compared to the previous year. Mr. Satya Sreenivas Neerukonda, Executive Director of Vimta Labs, commented on the results, "We are pleased with our performance in the first quarter, demonstrating consistent growth across our key segments. Our focus on expanding our service offerings and enhancing operational efficiencies continues to yield positive results. We remain committed to delivering high-quality testing and research services to our clients." The company also highlighted its ongoing investments in advanced technologies and infrastructure to further strengthen its capabilities and market position. Vimta Labs continues to be a key partner for industries requiring stringent quality control and regulatory compliance
There, the major projects have been in the field of pharma and environment that have moved slightly.
Okay. Okay. As far as, you know, in previous question, you mentioned about the competitive scenario is now, you know, getting stiffer, after, you know, coming up, you know, bigger player here. Overlap certainly will happen. How, how do you see that whether our growth would be affected or do you see that there will be, you know, still we will grow, the way, we have been guiding?
We don't think our growth will be impacted.
Okay. Okay, fine. Just, you know, coming back to there that on INR 75 of revenue between INR 75 crore-INR 76 crore or INR 78 crore, as we, you know, for past few quarters. Going forward, we see that now we'll come back in terms of EBITDA margin also. Whether product mix is going to change or it is just operating leverage, we will have a better operating leverage in fourth quarter?
Product mix could change. Food business is seasonal business. There could be a little change. Environmental business is also seasonal business. That also could, you know, impact. Diagnostics to certain extent, you know, it has an off-season and then it has a, you know, non-off-season. There are seasonal impacts across our service basket. That impact will be there for us quarter-on-quarter.
Okay. For FY 2024 also you are likely to retain this kind of EBITDA margin?
Yes. We will be retaining those and hopefully even better those...
Okay.
With the growth in top line.
Okay. Okay. That's nice. Thanks a lot. That's all from my side. Thank you.
Thank you. Ladies and gentlemen, that was our last question for today. I would now like to hand the conference over to the management for closing comments. Over to you, ma'am.
Just to thank all the participants and questions that were asked. We look forward to connecting with you again after our last quarter results. Thank you and good day. Bye.
Thank you. On behalf of Nirmal Bang Institutional Equities Private Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.