Thank you, Navya. Good evening, everyone. On behalf of Systematix Institutional Equities , I welcome you to the Q4 FY2025 Earnings Call of Vimta Labs. We thank the Vimta Labs management for giving us an opportunity to host the call. We have with us the senior management of the company, represented by Ms. Harita Vasireddi, Managing Director, Mr. Satya Sreenivas Neerukonda, Executive Director, Mr. Siva Rama Krishna Kambhampati, Chief Financial Officer, and Ms. Sujani Vasireddi, Company Secretary. I'll now hand over the call to Advait Bhadekar from EY for the cautionary statement.
Thank you, Vishal sir. Good evening and a warm welcome, everyone, to Q4 and FY 2025 Earnings Call of Vimta Labs Limited. Please note, investor presentation and the financial results are available on the company website and the stock exchanges. Also, anything said on this call, which reflects our outlook for the future or which could be construed as a forward-looking statement, must be reviewed in conjunction with the risks that the company faces. The conference call is being recorded and the transcript, along with the audio of the team, will be made available on the website of the company as well as on the exchanges. Please also note that the audio of the conference call is the copyright material of Vimta Labs Limited and cannot be copied, rebroadcasted, or attributed in press or media without any specific and written consent of the company. Now, I would request Ms.
Harita Vasireddi, Managing Director of Vimta Labs Limited, to provide you with the update for the quarter and year-end at 31 March 2025. Thank you and over to you, ma'am.
Thank you, Advait. Good evening, everyone. Thank you all for joining our Q4 and FY25 Earnings Call today. The financial year 2025 went well for us as the business saw good growth during the year despite the market uncertainty. In financial year 2025, the global economy showed signs of recovery despite geopolitical tensions and tight monetary conditions, both in the U.S. and key Asian markets. India's economy remained resilient, driven by robust domestic demand, strong manufacturing output, and government-led infrastructure spending. GDP growth forward around 7%, supported by easing inflation and improving rural consumption. The healthcare sector saw increased investment, reflecting growing focus on preventive care and research. The global testing, inspection, and certification markets experienced steady growth, continuing to be fueled by regulatory standards, the globalization of supply chains, and a heightened focus on product quality and safety. Asia Pacific, particularly India, played a key role in this momentum.
Rapid industrialization, infrastructure development, and the expansion of sectors such as pharmaceuticals, automotive, and medical devices contributed significantly. Technological advances also shaped the industry, with increased adoption of digital tools such as AI, IoT, and blockchain, enhancing accuracy and efficiency in testing and certification processes. These innovations are enabling service providers to deliver faster, more reliable results, reinforcing customer trust and regulatory alignment. The sector remains resilient and well-positioned for sustained growth in the evolving global quality assurance landscape. Before moving on to the quarter and yearly updates, I'm delighted to share that Vimta has embarked on an exciting new chapter with foray into biologics contract research and development services. This strategic move is a significant milestone in our growth journey and further strengthens our commitment to supporting the evolving needs of the biopharmaceutical sector.
Our new service line will focus on the development of novel biologic entities, biosimilars, and peptide-based therapeutics, leveraging both microbial and mammalian platforms. We are building comprehensive capabilities covering clone development, process development, biosimilarity assessment, and preclinical scale-up. Infrastructure development will be initiated in this quarter, with equipment procurement and qualifications targeted for completion by Q3 of FY2026. We anticipate revenue generation to begin from Q1 of FY2027. With this initiative, Vimta is positioning itself at the forefront of biologics innovation, enhancing our value proposition as an integrated high-quality R&D partner. Now, coming to the quarter and yearly updates, Vimta Labs has witnessed substantial year-on-year growth of 19.1%, with revenue at INR 3,482 million. This was primarily driven by the pharmaceutical services. We are experiencing good traction across all the services we provide, and we would like to highlight that our new life sciences facility is commercialized.
We had successful GCP regulatory audits by the Ministry of Health of the Republic of Kazakhstan and cGMP audits by EMA, European Medicines Agency, for human health products. Coming to the food testing services, overall performance has been flat, but the momentum is being seen now compared to the first half of FY2025. Recently, the food division was conferred with Outstanding Laboratory Performance Award 2024 by CII for the second consecutive year, showcasing the division's consistent excellence in quality, technical competency, and customer-focused service delivery. The electrical and electronics testing services experienced growth, and I'm happy that we are coming up with a second chamber to double the capacity. On the environmental testing services, we are currently focusing on the post-project monitoring segment and have been able to grow this segment well during FY2025. Looking ahead, we remain optimistic about the performance across all our service lines.
Before moving ahead with the financial highlights, I would like to take a moment to introduce a new addition to the Vimta family, Mr. Siva Rama Krishna Kambhampati, who has joined us as our new CFO and will be based at our registered office. He's a seasoned finance professional with a strong academic foundation. He has over 16 years of experience in engineering and pharmaceutical industries. In his new role, Mr. Siva will play a pivotal role in driving our growth strategy. With this, I would like to hand over the call to Mr. Siva Kambhampati to discuss the financials. Over to you.
Thank you, Ms . Harita A very warm welcome to all, and thank you for joining us on our Q4 and FY25 earnings conference call. I would like you to walk through the financial performance for the quarter and year-end at 31 March 2025, after which we can open the floor for questions and answers. Before I start discussing the financials, I would like to highlight that the previous period figures for certain items have been re-grouped to ensure compatibility with the current period, which is the announcement ofClinical Diagnostics and Pathological Services business on 30 August 2024.
Now, I'll start with the financial highlights for the quarter. The total income for Q4 FY25 stood at INR 961 million as compared to INR 731 million in Q4 FY24, up by 31.4% year-on-year. EBITDA stood at INR 347 million in Q4 FY25 as compared to INR 263 million in Q4 FY24, up of 31.9% year-on-year.
EBITDA margin for the quarter stood at 36.1%. Profit after tax in Q4 FY2025 stood at INR 183 million as compared to INR 140 million in Q4 FY2024, a growth of 31.2% year-on-year. PAT margin for the quarter stood at 19.1%. Moving on to the two-year performance, revenue from operations for FY2025 stood at INR 3,482 million as compared to INR 2,923 million in FY2024, up by 19.1% year-on-year. EBITDA stood at INR 1,262 million in FY2025 as compared to INR 978 million in FY2024, a growth of 29.1% year-on-year, translating into EBITDA margin of 36.2%.
Profit after tax in FY2025 stood at INR 668 million as compared to INR 488 million in FY2024, a growth of 36.8% year-on-year, translating into steady PAT margin of 19.2%. On the balance sheet side, we continue to have net debt-free balance sheet with cash and cash equivalents, including other bank deposits of INR 329 million.
Our total debt stands at INR 85 million as of 31 March 2025, with a debt-to-equity ratio of 0.02. CapEx for the year stood at INR 791 million. CapEx guidance for FY26 will be around INR 900 million. With that, we can now open the floor for Q&A. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press Star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press Star and 1 to ask a question. The first question is from the line of Ajay Surya from Niveshaay. You may go ahead, sir.
Congratulations for the performance. My question is, if I look at our overall CapEx, previously there was a quarter delay in our new CapEx. Also, in the past, for the food testing division, there was some revenue which went away because of shifting of the food division in Nashik. I wanted to know for the current quarter if there was such any internal or external factor which impacted our performance. My broader question on the theme is because our potential post our complete CapEx is INR 600 crore-INR 700 crore, and also we aspire to reach INR 500 crore mark by 2025-2026. My question is, when do we expect the CapEx which has recently completed to stabilize, and when do we anticipate to achieve the run rate of maybe INR 120 crore, INR 125 crore odd quarterly run rate?
We are expecting to achieve a run rate of INR 1.25 billion per quarter by end of this financial year. The CapEx that we put in during last year was to build additional capacity for our life sciences facility. That facility can support growth for at least the next five-six years.
There was no such internal or external factor for the current quarter which impacted maybe our revenue. I wanted to know how fast can that ramp up can come in because of the CapEx?
The CapEx is provided for our capacities are three-dimensional. One is the laboratory space, the other one is equipment, and the third one is manpower. The CapEx that we spent in building new facilities, that is with a long-term view to support our long-term growth prospects. The return will come over a period of these many years. Nothing in the Q4 has really impacted other than maybe some departments were shifting into the new facility. We have done it very consciously, slowly, so as to have minimal impact on revenues. Nothing significant.
Got it. My next question is, so now we have decided to expand into the biologics and peptides CDMO. If you can highlight more on the opportunity and what type of services will we be offering and different from the existing services of analytical or preclinical which we offer, if you can highlight more on what type of services and will the margin profile be similar or because even the CDMO peptides is a high-margin business for companies. Will our margin profile be on similar higher numbers or if you can guide us through?
On the margins, allow me to comment on them specifically in the upcoming quarter. I would just like to in brief share what the services will be. These are contract research and development services for biologics, wherein we will be offering turnkey solutions for product development, right from clone development up to development and optimization of upstream, downstream formulation processes. We can also provide standalone services such as biosimilarity assessment and then qualification of characterization methods, etc., etc. On a high level, we will be having capabilities to work on novel biologics, biosimilars, and peptides. These are the services.
For the CapEx guidance from this year of INR 90 crore, INR 50 crore will be on the biologics CDMO, is my understanding correct?
No. That INR 900 million is excluding this new investment. Here we'll be investing about INR 400 million in two years. First year, we may spend around INR 250 million, and the next year around INR 500 million and odd.
Okay. One more question. On the previous con call, we expected a new chamber for the electronics testing division to come by maybe Q4 end or Q1 beginning. I wanted to know the update on the same.
Yeah, it is right now under installation. We will finish its qualification before end of this quarter.
Got it. Okay. I'll join back in too.
Thank you.
Thank you. Participants, you may press Star and 1 to ask a question. Ladies and gentlemen, you may press Star and 1 on your touchtone phone to ask a question. Next question is from the line of Vignesh Iyer from Sequent Investments. Please go ahead.
Thank you for the opportunity. My first question is, if I heard it right, the earlier participant who had asked you a question, you had said we will reach the INR 1.25 billion run rate by end of financial year, right?
Yes.
Hello. Hello.
We can hear you. Please continue.
Yeah, yeah. As I was going through your PPT, slide number 31 on the key growth drivers, where you expect to reach INR 500 crore revenue by end of FY2026, that itself is a INR 125 crore run rate starting from, I don't know, on an average from Q1. I mean, reaching that INR 125 crore by end of financial year, is it more of a conservative thing or how should we understand it?
Two quarters ago, I had made a correction to that information, saying that we are hiving out some diagnostics business. When we took this target of INR 500 crore, we were expecting diagnostics business to be one of the prime drivers towards reaching these numbers. Now, since we do not have that business unit, we said we are still going to step up and try and hit that 500 number as a run rate in Q4 of this year. That is the correction that I had given almost about two quarters ago.
Okay. More like a Q4 exit revenue is something what we are hiring. Hello.
Yes.
Yeah, because the PPT still has not been removed. It is still there. I got confused with that part.
Thank you for pointing that out. We will update it.
Got it. Got it, sir. Also, I mean, on the CapEx that we have planned on the contract, biologic contract research, so this is done in an existing land parcel we have, or is it a new land parcel that we are seeing for expanding into or foraying into this new business?
It is within the existing facilities. Nothing new will be built specifically for this. We would have to renovate a little space, which we will now initiate in this quarter.
Okay. Got it. Got it. Got it. That's all from my side. Thank you.
Thank you. Next question is from the line of Rahil Shah from Crown Capital. Please go ahead.
Hello. Hi. Can you hear me?
Yes. Hi. My question was on the margins. You've done really well in financial year 2025 as compared to previous years. Firstly, what led to this increment in margins, and what can we expect going ahead? If you can provide an outlook on a quarterly basis, that would be helpful. Otherwise, for the full year 2026.
Last quarter saw even slightly better margins. I had answered this question. The margins can be expected to be around what it is right now, plus or minus 2%. Our endeavor will be to maintain and further better it. There is a possibility that it could be plus minus 2% this current number. What has led to the increment of margins is, one, our diagnostics business was not doing very well, and it was having a dragging effect on our margins, which is now removed. Also, we have improved our operational efficiencies in our other services as well. Multiple factors are at play here.
Okay. With regards to growth in the business, which particular vertical or services you are offering is going to be one of the key drivers ahead? If you can, like you said, INR 125 crore per quarter year end rate, you wish to achieve by end of this financial year. Overall, can you guide a certain % growth you are expecting?
Broadly, as I've shared already, 70% of our business comes from pharma now and about 20% from food. Both put together, they're almost 90% of our business. These two will drive our growth during the year.
Would you like to give a certain percentage of growth expecting in FY 2026?
We don't normally give a growth outlook like that.
Okay. Okay. It is definitely going to be much better than the previous year that passed.
I think this year we gave a very good growth rate, and I hope to maintain the same growth rate at least.
Okay. Got it. Okay. Thank you and all the best.
Thank you.
Thank you. Next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.
Yeah. Thanks for the opportunity and congratulations for a good set of numbers. I'm just wanting to check on the CapEx that we are doing of INR 900 million for this next financial year. We have just completed the expansion in a new building at our existing facility, and we are yet to fully not even reach 40-50% capacity utilization. Can you talk about the rationale for doing this INR 900 million CapEx this year and how will this expand our capacity and if you can highlight in which all areas will we be deploying the INR 900 million CapEx?
Sure. Like I already mentioned, our capacity is three-dimensional. One is the laboratory space, one is the equipment, and the other one is manpower. Now, what we have created with previous year's CapEx is additional laboratory space. Now, to propel our growth, we would continue to be investing in adding more equipment and also adding people. CapEx for purchasing equipment is a routine activity of the company. Since this year, again, we'll be targeting a good growth, we will have to expand on CapEx as well.
Sure. Sure. Okay. On the biologic side, the CapEx that we have announced for INR 50 crore, can you talk about is this just an extension of the services that we are providing on the small molecule side that we are expanding into biologics, or will we also be doing something different that we do not do on the small molecule side?
I'm sorry. Can you please repeat your voice? It was very blurred.
Sure. I was asking about the we are doing INR 500 million CapEx for the biologics and the peptide side. Is this the extension of the services that we are providing for small molecules, or will we also be doing some additional services here? If you can also talk about this, will it be largely catering to the generic side or will we be targeting innovators also there?
We will have capabilities to support both innovators and generics. Given the landscape, especially the domestic landscape, I think we'll be targeting mostly the biosimilar market in terms of business development initially. Service-wise, this is a backward integration of the services that we already have. You may know that we already provide biopharma services, analytical biopharma services. We provide preclinical services. We also provide clinical services. This is a backward integration where we will now work with our customer partners to help them in their formulation development also and can help them take it through and through from formulation development up to preclinical and even clinical research.
Sure. That helps. Thank you, Ms. Harita.
Thank you. Next question is from the line of Kiran from Table Tree Capital. Please go ahead.
Good afternoon, ma'am. Many congratulations on a 20% growth in a very difficult year. I think it's a commitment to your earlier effort. A couple of questions. A lot of other pharma companies are getting or are putting up dedicated CapEx for specific clients, US clients, and other clients, European clients as well. Are we putting up any analytic services or any CRO services, CDMO services specifically for any foreign clients, or this is just the inner CapEx for normal growth across a bunch of customers? I mean, dedicated CapEx versus normal CapEx.
We have been having dedicated customer-specific contract labs for the last 20 years. As a part of that continued service, we continue to invest in our customer-specific contract labs. We have investments that we will be doing this year. We have done it last year. I would say this is a routine part of business.
Got it, sir. Got it. Okay. The second question, ma'am, is on the CRO front, a lot of MNCs and a lot of even Indian companies are calling for headwinds because US model funding has kind of slowed down and so on and so forth. Are we seeing, I mean, I know our scale, we have a lot of scope to grow, but in terms of how we see the landscape for our company, do we see any headwinds from a CRO perspective?
We have seen headwinds in this sector, but we have been able to counter them well. There have also been price pressures in the market. Still, we have been able to build efficiencies, and we have been able to penetrate more into the market, get in touch with more newer clients. Those efforts are going on well. Next, we are able to do better despite the headwinds.
Superb. Superb. One last specific question from my side, which is, I mean, I need a percentage, rough percentage. I'm not looking for an exact percentage. How much of a turnover might be coming from clinical trial sense or animal testing? Rough percentage, again. I'm not looking for exact numbers.
We don't share such kind of percentage breakup.
The only reason why we are asking is we're making some regulations and so on and so forth. That's why we are just a little curious. Otherwise, we wouldn't ask.
Last year, we have done just one clinical trial. It was our maiden year, and we have just done one.
Got it. Got it. That helps, ma'am. Thank you so much.
Thank you.
Thank you. Next question is from the line of Kaushal Sharma from Equinox Capital Ventures Private Limited. Please go ahead.
Hi, ma'am. Very good evening. Am I audible? Hello. Am I audible? Hello.
Yes. Yes, sir.
Yeah. My question is on your CapEx side that you said that our guidelines on CapEx is around INR 90 crore for financial year 2026, and we have separate guidelines around INR 40 crore, out of which INR 25 crore for financial year 2026. The INR 90 crore that you were talking around for financial year 2026, is it included INR 25 crore for biomedical?
Sorry, can you please repeat? I think we got offline for a little while there. Can you repeat your question from the beginning?
Yeah. Yes, ma'am. Sure. My question is on your CapEx guidelines that you said that our guidelines for the financial year 2026 is around INR 90 crore, and we have the separate guidelines for biological segment around INR 25 crore for financial year 2026. This INR 90 crore figure will include this INR 25 crore?
No. As clarified already, the 25 is not a part of this 90. It is over and above.
Okay. My question is on your laboratory facility that we have called you or said that new life science facility in Hyderabad is being commercialized from Q3. What is the status of this laboratory?
We have commercialized this new facility. Now, 70% is already capitalized, and the remainder will be capitalized in this quarter. Because one division has already moved in, and the second division is in the process of moving in and doing their qualification, which will be completed in this quarter.
There is an additional capacity that will let new EMI/EMC chamber for electronic testing that will be installed by Q4 or early next year. What is the status of this?
The new chamber is under installation right now. We will complete its qualification during this quarter.
Okay. Ma'am, what is our asset and our business so that we can understand our revenue?
Can you please repeat?
Asset and asset turnover ratio.
Asset turnover.
Asset turnover ratio.
Yeah.
For us, we look at a 1:1 return when we are investing in CapEx. More or less, our investments have yielded this average.
Okay. One-to-one return. I have seen your receivable days as well as being stretched over the period. What is the reason and what is the normalized receivable days in our business?
Your voice is very muffled. Sorry.
Yeah. Now, is it good? Hello. Hello? Am I audible?
We'll try again. Please go ahead. Yeah.
Yeah. Ma'am, I was talking about your receivable days, so it's being stretched out. What is the normal receivable days in our business?
What is the normal?
Normal receivable date?
Receivable date. Data date.
Our DSO is currently around 110 days.
Yeah.
Yeah. This is what it is. Over the years, the DSOs have been increasing, but that's been the trend of the industry.
Okay. In industry, the receivable days are around 100-110. Is it right?
Yeah. Our various sectors have various DSOs, but average DSO for the organization stands around 110 days right now.
Okay. Okay. Thank you for asking my question.
Thank you. Next question is from the line of Kevin Daftary from Siddhant Partners. Please go ahead.
Thank you for this opportunity. Am I audible?
Yes.
Yes, you are.
Firstly, congratulations on the good set of numbers. I just have two questions. First, out of this revenue that we have, I think 70% from pharma and probably 20% food, can you help me understanding what percentage of this would be from, say, US? Second question, with respect to some headwinds that you mentioned, you have been able to sort of minimize the impact, but do we see any headwind in terms of our business which could impact directly, maybe in the next one or two years? Thank you.
Thanks. Just to answer your first question, overall, our export revenue has been around 36%, but most of our exports is through our pharma services. Coming to headwinds, very difficult to say. I think the whole world right now is going through some uncertainties. We will have to wait and see. Maybe we'll get a better idea in the next quarter or so.
Sure. Sure. Just can you elaborate on this first question? 36% is export. I did not understand when you said it is through.
Overall, at the company level, 36% of our revenues come from overseas. I was just trying to clarify that the export revenues are mostly through our pharmaceutical services.
Okay. Pharmaceutical services. Any ballpark around what would be sort of exposure to US in this revenue?
Exposure, about 60% of these revenues are from US.
Okay. Okay. That's helpful, ma'am. Thank you.
Welcome.
Thank you. Next question is from the line of Dhwanil from iWealth Fund. Please go ahead.
Hello, ma'am. Congratulations on a good set of numbers. Am I audible?
Yes.
Yeah. Ma'am, just wanted to check on the CapEx again. Sorry to repeat this, but earlier, ma'am, when we had said that we had put up close to 200,000 additional sq ft for a CapEx of INR 800 million, right? In that, the equipment was already included, correct? Now for the building, more INR 900 million.
That was only on the building.
That's INR 70 crore-INR 80 crore, INR 75 crore was only for the building.
Last year, the sum that you're talking was on the building. It was not for equipment. Now, this year, we are saying we will be having additional CapEx spent. This will be mostly for equipment.
Got it. Got it. Currently, ma'am, the new unit or the new facility which we have commercialized, that already has equipment in place, right?
No. That is just laboratory space that we have created. We'll be buying in equipment as and when we need those additional capacities.
Okay. Okay. Once we buy that, post that, our revenue recognition should happen, right? Before the new equipment, ma'am, we won't be able to do anything, right?
Yes. Yes. Yeah. That's correct. As and when we are growing, we will have to add more resources. For us, the resources will be equipment and people.
Got it. Got it. Ma'am, just wanted to check on our overall expense. If I'm seeing this quarter, we did have INR 950 million of saved, right? There were sequential INR 50 million of total expense which have increased for us. If you could just, ma'am, help us understand where was this and going ahead, how should we see this? I think employee cost was INR 40 million increase quarter on quarter. Then other expense also went up by INR 20 million.
Yeah. To answer your question on employee cost, yes, there is an increase. That is for two reasons. One is the regular increase from the previous year in terms of increasing manpower and also the increments. In addition to that, in current year, what has happened is we had to make some additional actual valuation related to gratuity and ESOP valuations. This has contributed to the increased manpower costs in current quarter.
Okay. On the other expense, employee?
Okay. Other expenses, it has a percentage of total revenue. The component of other expenses is a little bit lower. The other expenses include the travel and facility costs. That varies depending on the requirement of increasing these expenditures in terms of travel.
There is a new facility at operation now, which is yet to be fully occupied and utilized. The new facility also, our operation costs will go up a little bit.
Got it, ma'am. Ma'am, overall, on the demand side, because ma'am, I think earlier also when we had spoken, just on that, incrementally, the sales has been a little bit slower in terms of growth, right? Just on the demand side, ma'am, how are you seeing going ahead? We've got the overall guidance, but just on the demand, ma'am, if you could just understand. Between the two segments, the pharma and food, how is the overall opportunity shaping up for us?
Demand side for pharma is pretty healthy, especially for the scale of activities that we do and the growth opportunities that we are looking at. Demand for now is quite healthy. We are also optimistic about growing in this year and the coming years. Food, we saw significant headwind in the first half of last year, and that has normalized after the first half. Q4 also tends to be typically a high quarter for food because there is seasonal business involved. Q1 also, again, it looks much better than what we saw last year in Q1 and Q2.
Got it. Just last question, ma'am, can you give us the quarter numbers for pharma and food separately? What we did?
No, we don't do that.
Okay. Okay, ma'am. Thank you so much. All the best.
Thank you.
Thank you. Next question is from the line of Umesh Matkar from Sushil Financial Services. Please go ahead.
Yeah, madam. Thank you for giving me the opportunity and also congratulations on a great set of results in this uncertain environment. My question was, on the clinical trial front, how things are going on? We had signed the first deal a few quarters back. I just wanted to get a sense on this. Are we seeing extension of it or added any clients in the clinicals? Thank you.
Clinical trials, we are seeing traction in our RFPs. Too early to comment on anything more than that. For now, I just want to say that the first trial that we started last year is near to completion, and we have successfully done that to the satisfaction of our customers. We are looking forward to onboard some more trials during the year.
Okay. That would be great. Thank you very much, ma'am.
Thank you. Next question is from the line of Viral Bhansali from Pearl Investment. Please go ahead.
Yeah. Hi, team. Congratulations on a good set of numbers. Most of my questions got answered. Just one last bit. Ma'am, what is the quantum, the size of the orders, a typical size of orders in the contract, the clinical trial? Sorry, I'm sorry. The clinical trial segment, what is the typical size? Just a ballpark number of each order.
Clinical trial order sizes can vary depending on the therapeutic area, depending on the protocol design, whether it is 60 patients or 400 patients. Any number of factors dictate the size. We have seen that this could be as low as INR 3,000,000-INR 4,000,000 to as high as tens and tens of crores. It is quite wide and varied.
You mean in rupees, right?
Sorry?
You mean in rupees?
Yes. Yes. Yes. Rupees.
Okay. I mean, can the size of these orders grow as we develop a niche for ourselves in this space?
Not necessarily. Any CT providers would be open to do all kinds of clinical trials. Sometimes if you're offering a trial to a nutraceutical customer, the trial value could be much lower when compared to a pharmaceutical customer. There's no specific bandwidth for this.
How are we placed as compared to Vimta in the same space?
We are a new entrant, I would say. We are not comparable with them yet.
Yeah, are we in the position to offer the same scale of services as Vimta is currently offering?
CT, there is no scale issue as well because these are most patient trials, right? We'll be doing these trials at the hospitals. There is no scale issue here.
Okay. It is more about having a lot of such work done. The experience gives you more orders, more such orders in the future. Am I right?
Yes, that is there. Yes.
Okay. How is the clinical trial landscape looking to you? How much can we scale up? Can we reach a revenue of, say, 10%, 20%, 30% of our total revenues from clinical trial space, considering it's a big field? It's a big space.
This is Sreenivas.
Yeah. Hello, sir.
When we say clinical research at Vimta, it is two essential parts of it. One is the healthy volunteer trials, for which we have been the pioneers in the country, and we continue to do that service for the last 30 years. Our main markets are US, Europe, and India. There we have 180 beds. Here, we are one of the top five players in the country doing the clinical trials for generic molecules. The PK studies or BA/BE studies , what you generally call them. Coming to clinical trials, as Harita mentioned, we are a new entrant into it. It's only been two years. The landscape is big. It's a global requirement. Now, with the growing complex products which are coming in the peptides or biologics, biosimilars, right, and complex generics, this requirement is going to grow.
Again, the West is looking back at India for getting some of their multi-country trials done. That also gives us a leverage. We have entered into it. We have the experience. We have all the setup which is needed for it. The good part of clinical trials is there is no capacity constraint because this is done at hospital sites. India, with the population base and the number of hospitals, all the key segments, disease segments, the patients are available in India to enroll. It is just about reaching out and exploring more such trials.
Yes. Essentially.
Yes. Go ahead.
Go ahead.
Go ahead.
If you look at the global reports on clinical trials, I mean, it's an essential requirement of any pharmaceutical, biotech, or medical device.
This is a new biosimilar for the biologics 4A that we are making. It would essentially be a part of the clinical trial segment.
The one we have announced today is mainly on the process and product development support for our clients in the space of biologics. Our clinical trials already is, I mean, equipped to do trials for biologics or biosimilars.
Okay. It's a holistic thing. And clinical trials will be one segment of the entire biological testing space, biologics testing space?
Yes.
All right. Thank you. Thank you so much.
Thank you. Next question is from the line of Ajay Surya from Niveshaay. Please go ahead.
I'm sorry, Paulo. Ma'am, this question is again on the CapEx. We mentioned that INR 75 crore was for building, and now a majority of this INR 90 crore will be deployed into equipment. This will also be done as and when needed. Ma'am, can you please highlight what would be the current capacity utilization of the existing equipment put in at the new facility? Also, on the INR 90 crore, if you can help us on the deployment part, like how much do we plan to deploy in maybe the first half or the second half? If you can break this up, that will be really helpful.
That nitty-gritty, please excuse me. I will not go into it because I do not think it is very relevant. We will keep investing in CapEx or capacities as and when we need it across various BUs. How each BU will move will depend on how revenues or pipelines are moving for us. I just want to explain the new facility a little bit for you. When we invested INR 750 million, it was in building infrastructure. We did not buy any equipment and put there. What we did is we moved some of our existing services from the legacy building into the new building. This created more space in the legacy building, which we are going to use entirely for pharmaceutical services. Earlier, it was housing food. It was housing electronics testing.
What we have done is we have created a new space for food testing, a different space for electronics testing, and we have also created more space for preclinical testing. What this has done is it has opened up a few quadrants to expand our analytical services for small molecules and large molecules. We are using these spaces to create facilities for expansion, not only for the analytical, but also we'll be now setting up the development labs in these vacated spaces. That's how we are going to do. There is no new equipment that has been brought and kept idling anywhere. We buy equipment as and when we need additional capacity because the lead time for most of these equipments is around one to two months only.
Okay. That helps. My next question is, ma'am, in the only pharma analytical side, we saw almost the top 20 pharma companies. I would like to know what would be our market share in this division across the whole industry. If you can clarify, we also mentioned about maybe facing some headwinds. There was also some comment on there is healthy demand, and we also aim to maintain the margins. I'm unable to understand the industry-level situation which Vimta is currently facing. If you can maybe clarify, the headwind is mainly on the pricing front, or is it on the demand? Even in the demand, is it between the small molecules or the large molecules which we're dealing?
Okay. Two things are happening simultaneously here. One is the market dynamics, which we are not where we do not have control. There we are seeing that companies are going slow in their pipelines. That is one aspect. That is external. We have no control on it. There is an internal aspect where we are continuously putting up business development efforts. We are going out more into the US, more into Europe. When we are doing that, we are able to connect with more prospects and convert them as our customers. Both of these are happening. That is why I said net, there has been a growth.
Okay. Ma'am, on the market share, what would be our market share on the pharma analytical side?
Very difficult to quantify. On a global scale, it's quite negligible. In India, it is difficult to get a figure on this because there's not enough research out there.
Maybe, ma'am, if you can then share on the repeat customer rate for both, maybe the pharma analytical side and the preclinical side because the clinical we just recently started. Maybe on the repeat customer rate, if you can maybe highlight.
Our repeat business is very strong. It is upwards of 90%. That is the number of clients who are coming back to us year after year. It's not necessarily comparable revenues from each client. Today, somebody might spend a certain amount on our services. They would have spent another amount in the previous year. What we see is, are they coming back to us repeatedly for these services or not? In that context, our repeat business or our customer retention is upwards of 90%.
Okay. Ma'am, again, one last question. We also increased the borrowing power to INR 300 crore in this board meeting. There is a new CapEx which maybe that sums up to more than INR 120 crore for this year. Are we going to use any external funding for this?
No. Not as a stock. The borrowing power that has increased is just as a placeholder. The current CapEx requirement, whatever is there, that will be invested through internal approvals.
The little debt, ma'am.
The little debt for the biologics segment, INR 250 million. Probably that will be meeting by raising a small debt, but mostly through internal approvals.
Okay. Okay. That's it from my side. All the very best.
Thank you. Next question is from the line of Vilin, who is an individual investor. Please go ahead.
Congratulations on a good set of numbers, and thanks for the opportunity, ma'am, and the entire team. Just starting on the revenue guidance, as you have articulated really well, the overall target that the company aims. If I understand correctly, barring something like global headwinds, we are on a target to achieve INR 1.25 billion exit and rating Q4. That would place us at better revenue growth compared to last year, obviously with the caveat that any unforeseen global event happens. Is that the correct summary, ma'am?
That's the correct summary.
Okay. Also, the last question is on the CapEx. This INR 90 crore CapEx, that will be irrespective of the demand environment, or that is a flexible number depending on the demand environment. That number may change a bit.
That number will certainly depend on our growth.
Understood, ma'am. Thanks a lot.
Thank you. Next question is from the line of Tanvi Vora , who is an individual investor. Please go ahead. I would request you to please unmute and speak. Due to no response, we'll be moving to the next participant. Next question is from the line of Veer Rajesh Vadera from Niveshaay Investment Advisors. Please go ahead.
Good afternoon. Most of my questions were asked, so I wanted to ask around competitor side in pharma analytical and clinical and preclinical. As of now, Veeda Clinical has lower margins. Could you comment on the competitor side?
We can't comment on competitors' lower margins. We don't have enough information to comment on that.
Okay. Pricing side and all? Competitive power and any?
Our prices are competitive in the market. That's all I can say.
Okay. Is there any intensity in competition, or are there few players?
Yes. There have been.
Yes.
There are a lot of laboratories that have come up in the recent past. There is definitely going to be continued price pressure.
Okay. Thank you.
Thank you. Next question is from the line of Pratik Kedia, who is an individual investor. Please go ahead.
Am I audible? Yes?
Yes.
Yeah. Most of my questions have been answered, so I don't have any questions. Thank you.
Thank you. Next question is from the line of Kiran from Table Tree Capital. Please go ahead.
Yeah. Sorry. Last question from my side. The INR 300 crore borrowing is a very huge number. I mean, we've known Vimta for about 10, 15 years. We're looking at numbers. We've never had a debt of more than INR 40 crore, INR 50 crore. Obviously, we have decent cash for our CapEx. It's not an approval for INR 100 crore or INR 50 crore or INR 150 crore. It's an approval for INR 300 crore. Are you seeing any major shift in customer buying patterns? Are you seeing any major CapEx that you're going to foresee in the next year or two for getting an approval on such a huge number? I mean, I could understand as a permission, INR 100 crore, but INR 300 crore is a big number for Vimta management. I'm just wondering. It's completely away from our nature. Just wanted to get clarification on that.
Just to correct, sir, as of now, our overall borrowing power is increased to INR 300 crore. Earlier, it was INR 175 crore. Now, there is an increase of INR 125 crore only. That makes the overall borrowing power to INR 300 crore. It is not that we have increased the borrowing power of INR 300 crore now.
That is understood, sir. I was just saying, I mean, that is a significant increase. I mean, it's not, I mean, from whatever little we know about the company, it's not in the company's DNA to get such a huge borrowing approval. That's why I'm asking why.
Yeah. If you see, based on earlier discussions, the overall CapEx spend guidance for current year 2025-2026 will be around INR 115 crore, including INR 25 crore of investment in biologics. Okay?
Right.
Although we are not recharging to cater to this requirement through debt, there could be the requirement of borrowing for this purpose around INR 30-50 crore. We need to have a placeholder and enough borrowing limits with us to be able to meet the requirement. We cannot go to our shareholders and request for increasing borrowing powers as and when needed. That is why we had got this increased as a placeholder. Whenever there is a requirement, accordingly, we will take the necessary approvals and invest.
Sure. Thank you. Thank you.
Thank you. Next question is from the line of Kevin Daftary from Siddhant Partners. Please go ahead.
Thank you for this second opportunity. Just two questions. One, is there any plans in terms of inorganic growth that company is looking at? My second question is, should we connect for more detail offline with the new CFO, or is there any dedicated IR? Thank you.
CFO is always available to answer any specific queries that we can discuss on this call. The first one is.
I mean, inorganic growth that you're talking about.
Inorganic is definitely a strategy. It will happen when opportunities are concretized for us. As of now, nothing concrete is there.
Understood. Understood. Thank you.
Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments.
I wish to thank everyone for joining us on this call today. All of you have congratulated us. I very much appreciate the congratulations. I want to also thank Vishal from Systematix Institutional Equities for being on this call. Thank you. Bye.
On behalf of Systematix Institutional Equities.