Ladies and gentlemen, good day and welcome to the Q2 FY 2026 earnings call for Vimta Labs Limited, hosted by Systematix Institutional Equities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Manchanda. Thank you, and over to you, sir.
Thank you, Sashant. Good evening, everyone. On behalf of Systematix Institutional Equities, I welcome you to the Q2 FY 2026 earnings call of Vimta Labs. We thank the Vimta management for giving us an opportunity to host the 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. Siva Rama Krishna , Chief Financial Officer; and Ms. Sujani Vasireddi, Company Secretary. I'll now hand over the call to the company management for opening remarks. Over to you, sir.
Thank you, Moderator. Good evening and a warm welcome, everyone, to Q2 and H1 FY 2026 earnings call of Vimta Labs Limited. Please note that the 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 used 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 audio of the same, will be made available on the website of the company as well as on the stock 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 the press or media without specific and written consent of the company.
From the management, we have with us Ms. Harita Vasireddi, Managing Director; Mr. Satya Sreenivas Neerukonda, Executive Director; Mr. Siva Rama Krishna Kambhampati, Chief Financial Officer; Ms. Sujani Vasireddi, Company Secretary. Now, I request Ms. Harita Vasireddi, Managing Director of Vimta Labs Limited, to provide you with the updates for the quarter and half-year end date: 30th September 2025. Thank you, and over to you, ma'am.
Thank you, Siva. Good evening, everyone. Thank you for joining our Q2 and H1 financial year 2026 earnings call today. We will start with a brief business update, and then our CFO will take over to discuss the financial highlights for the period end date: 30 September 2025. I'm very delighted to share that Vimta Labs has recorded highest-ever quarterly sales revenue, crossing a mark of INR 100 crore, with INR 104.5 crore, making an upward shift of 22.3% on a year-on-year basis. This growth is a result of hard work by the entire Vimta team. Pharmaceutical research and testing and food testing services are the major contributors to revenue growth, and these services continue to perform well in this quarter as well, while electronics and electrical testing and environment testing services maintain steady performance.
With technological advancements, tightening quality norms, and the rapid growth of the wellness sector, the spotlight on product quality and safety has never been stronger. Equipped with cutting-edge testing infrastructure and deep domain expertise, Vimta stands ready to harness emerging opportunities across pharmaceuticals, nutraceuticals, food testing, etc. Our pharmaceutical testing services continue to demonstrate strong performance this quarter, driven by sustained demand from both the domestic and international clients. We are happy to report that the clinical research division went through a successful WHO audit, reflecting our commitment to maintain strong quality and compliance in our operations. Our food testing division experienced good growth during the quarter. The electrical and electronics division delivered a stable performance. We have commenced operations with the new testing chamber installed at our life sciences facility. With this capacity expansion, we are ready to drive growth from this segment as well in the coming quarter.
With respect to our biologics contract research and development services, I wish to update that the project is on schedule. The majority of the equipment and important reagents have been ordered. The facility will be ready by the end of the third quarter, post which we will take up qualifications of the area and equipment. At this point of time, we are confident of commercializing these services by Q1 of financial year 2027. With this, I would like to hand over back the call to Siva for him to discuss the financials.
Thank you, Ms. Harita. A very good evening once again, everyone. We appreciate you taking the time to join our Q2 and H1 financial year 2025-2026 earnings call. I will begin by presenting an overview of our financial performance for the quarter and half-year end date: September 30, 2025. Following that, we will open the session for questions. Before discussing the financials, I'd like to specify that in light of the divestment of our diagnostics and pathological services business announced on August 30, 2024, the figures for the previous period have been regrouped to enable a like-for-like comparison with the current quarter. I will start with the financial highlights for the quarter. Total income for Q2 FY 2026 stood at INR 1,045 million as compared to INR 854 million in Q2 FY 2025, up by 22.3% year-on-year.
EBITDA stood at INR 369 million in Q2 FY 2026 as compared to INR 306 million in Q2 FY 2025, up by 20.6% year-on-year. EBITDA margins for the quarter stood at 35.3%. Profit after tax in Q2 FY 2026 stood at INR 199 million as compared to INR 170 million in Q2 FY 2025, a growth of 17.1% year-on-year. PAT margins for the quarter stood at 19.1%. Basic EPS in Q2 FY 2026 was INR 4.5. Coming to half-year performance. Total income for H1 FY 2026 was at INR 2,038 million as compared to INR 1,610 million in H1 FY 2025, up by 26.6% year-on-year. EBITDA for H1 FY 2026 was INR 723 million as compared to INR 572 million in H1 FY 2025, up by 26.4% year-on-year.
EBITDA margin stood at 35.5%. H1 FY 2026 PAT was at INR 388 million as compared to INR 309 million in H1 FY 2025, up by 25.5% year-on-year. PAT margin was at 19%. Basic EPS in H1 FY 2026 was INR 8.7. On the balance sheet side, we continue to have net debt-free balance sheets with cash and cash equivalents, including bank balances of INR 545 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 one on the touch-tone 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. Participants who wish to ask a question may press star and one at this time. I repeat, participants who wish to ask a question may press star and one at this time. The first question is from the line of Darshil Jhaveri from Crown Capital. Please go ahead.
Hello. Good evening, sir. Thank you so much for taking my question, sir. Actually, I am calculating on a good set of numbers, sir. Hello. Hopefully, I am audible. Hello?
There's a lot of speakers on there, sir.
Yes, you are audible.
Yeah, yeah. Hi, sir. Sir, I just wanted to know that, you know, we have crossed the, you know, INR 1,000,000,000 quarterly run rate, sir. Any kind of guidance that, you know, you would like to give for this year and next year in terms of revenue and margins?
We do not issue any forward-looking numbers.
Oh, okay. Okay. Sorry about that. Hi, everyone. I'm sorry. This run rate that we are at right now, will we be looking to continue that run rate going forward, or, you know, how will the new CapEx that we are investing in, how will that help us grow further, sir?
That question was not very audible to me. Sreenu, can you take that?
No, even I could not hear that.
Hi, sorry. I hope this is better. I'm saying that, okay, now we've reached the, you know, INR 100 crore run rate. Now, going forward, will we have any capacity constraint, or, you know, how would we, you know, ensure that our growth momentum continues? That's because we're investing in CapEx, right? How will that kick in, and, you know, what kind of an asset turnover do we expect from the new capacity?
There are no capacity constraints at the end of stage for the immediate future. Recently, we have taken up expansion of the infrastructure, so the infrastructure is available. The required resources in terms of manpower and equipment will be added as we are able to grow our revenues.
Oh, okay. Okay. Fair, fair enough, yeah. That's it from my side. Thank you so much.
Thank you very much. The next question is from the line of Sai Surendra, an individual investor.
Hello, sir. Good afternoon. My name is Sai Surendra. I am a retail investor. Congratulations to the management for the strong Q2 performance and the steady growth in momentum. My question is, which service line will support higher growth in the next quarter? Pharma testing, or critical clinical fairness, or electrical testing. As the explanation is completed and biological work is processing, can we expect even the better growth of Q2 or Q4 or financial year 2026?
The growth we expect, to continue from the pharmaceutical research and testing services and food services. These two anyway make up the larger portion of our revenue pipe.
Okay, ma'am. Thank you.
Thank you very much. Participants who wish to ask a question may press star and one at this time. I repeat, participants who wish to ask a question may press star and one at this time. The next question is from the line of Aditya Chheda, from InCred Asset Management. Please go ahead.
Good afternoon. Mike, I have two questions. First is, if you can elaborate on the utilization of the phase I of the new capacity and the status of the phase II of our new facility. Any commercialization timelines that you would want to share? My second question is on the other expenses where we've seen a slight bump. If you want to elaborate, any nature of expenses, perhaps, maybe related to starting of the new facility, etc., if you can comment on the nature of these expenses, that would be helpful. Thank you. These are the two questions from Mike.
Sir, coming to the first one about utilization, the new facilities that we have created, they are occupied and already commercialized. We have built these capacities for a long time, a long period. Even going into the next few years, we think as of now that these expanded capacities will suffice and will support the growth that we wish to pursue for the organization. Coming to utilization in the phase I, there also, I think, since we have built the phase II, some spaces have opened up there, but every space is more or less earmarked for the kind of activity that we wish to take up. These spaces we will start using from Q1 of next financial year. Coming to the little spike in other expenses, I think the spike you see is because of the additional travel. We are infusing some energies into the business development overseas.
There you see a little spike in expenses. Probably some, that's all? Thank you. Yeah.
Is that regular fixed cost that we are incurring, especially increased because of, you know, additional BD efforts that we are putting in?
Got it. If I have to attribute any number to utilization of phase I, it should be adequately utilized at this point of time. Only when phase II comes online, we will see some step growth in revenue. If that understanding is correct.
I wish to correct that. Phase II also is underutilization, not the entire facility that we have created, but we have already begun using 50%-60% of the additional space that we have created.
Sure, ma'am. That's it from mine. Thank you.
Thank you so much. Ladies and gentlemen, before we move to the next question, I would like to remind the participants to press star and one to ask a question. I repeat, participants who wish to ask a question may press star and one. The next question is from the line of Veer Vadera from Niveshaay. Please go ahead.
I hope I'm audible.
Yes, sir, you're audible.
We started with the clinical services not long ago, and we, also in previous calls, I have mentioned our only strong pipeline on this side of services. With the other expenses going up and you were mentioning that it is majorly for business development purposes. If you can maybe highlight more on our pipeline, our conversion, and when do we foresee maybe newer customers or newer orders on the clinical side? Anything on this if you can comment.
Can you take that, Sreenu?
Yeah. So, clinical business is not new for us. We have been doing clinical for the last 33 years now. What we were doing earlier was mainly healthy volunteer studies. What we initiated four years back is doing studies in patient population, which is being done in the hospital setups. And hospital setup does not require any major CapEx from our side. It is off-site, so it's mainly having the team in place and some regulatory software, which are also now available as a service model. We do not anticipate a lot of capital getting in there.
Sir, from the presentation, we have, like, in part, almost around INR 47 crore CapEx outlay for this quarter. Maybe if you can give some color on, because previously, our CapEx was bifurcated into maybe three portions, like infrastructure and equipment. How much of this INR 46-INR 47 crore is, like, spent on equipment funding?
I would just like to.
You are.
Just, sir, I just want to correct one thing. The INR 47 crore of outlay is not for the quarter. That is for the half year.
Okay. Sorry.
Sir, go ahead. Other than that, that's all. On the CapEx.
Thank you very much. Participants who wish to ask a question may press star and one at this time. The next question is from the line of Vishal Manchanda from Systematix Institutional Equities. Please go ahead, sir.
Yeah. Good evening, everyone. My question is, with respect to the CapEx that we are doing. Is this, can you kind of, while you would have done this earlier, but I still, I still need some clarity in, like, how much you are spending on each vertical. How much on pharma analytics, how much on biologics, how much on clinical research? If you could break that up.
Oh, that's very granular information. Please excuse me, but I won't be able to share that.
Okay. If you could directionally tell where is the largest CapEx going, within among the verticals?
We have expanded our capacities in pharmaceutical, food, electrical, and electronics testing. CapEx has been spent on all these three verticals.
Okay. And while we kind of spend on this, spend on CapEx, is it with the visibility that we spend on, or you have some kind of client contracts that you back up this CapEx with?
Some CapEx is inherent to the capacities that we have added. Like, for example, if you have a building, you will need to spend on the equipment associated with the new space that is created, you know, some of it. Some of it is, of course, because we have the visibility of the pipelines. There is a play of both here.
Okay. Any, any update on the JNPT project? Is there further traction there, and have we still reached where we need to be there?
Yes. I would say we have reached where we were expecting to be there.
Okay. So, bro probably will not see any further growth from JNPT?
As of now, I don't have any such information.
Okay. With respect to exports, last quarter it was 30%. Is the growth largely, is more of the growth coming from exports, or is it coming from the domestic markets, for Vimta?
Both.
So, the ratio remains, exports would still be 30% and domestic 70%?
Exports have gone up slightly by, I think, a couple of percent in this quarter.
Okay. Okay. With respect to the biologics business that we are foraying into, we, we'll be doing cell line development. Is that right, or will we not be doing the cell line development?
We are having the capability being built in to do even cell line development. So any portion of the large molecule development, we have, we are putting in place the capability.
Okay. You also have capabilities on analytical part? Analytical.
That we already have.
You already have those capabilities?
Yes.
There is a guideline that the U.S. FDA has recently issued, draft guidelines regarding approving biosimilars without clinical trials. The only analytical testing would suffice. Would we have the entire capabilities to kind of do the full package of analytical testing? And is it different for each biologic, or are they broadly the same for all biologics that would?
We have the capability, broadly for, most of the requirements with respect to analytical. Some could be very product-specific. If that is the case, we can always onboard those technologies. We have been having analytical capabilities for more than seven, eight years now.
Do we have, like, relevant kind of experience in terms of servicing clients on those capabilities, and are our analytical studies going to the regulator?
Yes, yes. He is very experienced.
On the, even on the biologic strength?
Yes.
Okay. Okay. Thank you. That's all from my side.
Thank you very much. The next question is from the line of Veer Vadera from Niveshaay . Please go ahead.
Thanks for the follow-up. I'm gonna still look around, maybe from whatever the CapEx which we are incurred and we're anticipating, maybe an exit run rate for this financial year for, like, maybe around INR 500 crore kind of exit run rate which we are targeting. Given the current business environment, maybe due to tariffs and all this situation, would we want to reconsider our guidance or anything maybe you would like to comment?
We are still sticking to that goal that we have taken for ourselves. The tariff situations, I think, are more or less stabilized now. Unless something dramatically changes, that's the number that we are still targeting and pushing for.
Got it, ma'am. And, ma'am, like, for the business split which we were mentioning that maybe exports have gone up a bit, on the domestic front, like, is it, what sort of challenges are we currently facing maybe for the segment geographically not to maybe grow at to that extent?
Sreenu, you want to take that?
Yeah. Can you just repeat your question? Your voice broke while finishing the question.
I wanted to know more on the analytics because, even in the pharma, analytical is majority of our revenue being coupled with preclinical and clinical. On the domestic business front, maybe if you can throw some light on the business environment as of now. Are we facing any challenges because, even in the regulatory bodies, there have been some changes where maybe only, maybe pre-food, not post-food, only one-time analytical testing is to be done. There have been some regulatory changes also which have been maybe affecting our business. I wanted to know more on this side of things. How has the business environment been domestically? Are we facing any challenges maybe due to the regulatory bodies or any changes in regulation? If you can comment on that and maybe give some outlook on the near future, how do we see things to evolve from here.
That would be really helpful.
Yeah. As such, there is no regulation change that we know of. Pre-COVID or post-COVID, the regulations remain the same. That is not impacting anything either for the manufacturing segment, R&D segment, or for the testing segment. Nothing has changed as of now. The landscape is good. I mean, the companies are getting more into complex product development. There are new developments in the lines of biologics, peptides, a lot of manufacturing which is happening now in India. There are some companies who have set up big facilities in the Bangalore region, Hyderabad region, Bombay region. Business is good for them. When this thing happens, testing for us increases because facilities are done at a different site. For testing, they need independent laboratories. In general, pharma is growing. I mean, there is no slowdown or anything of that sort. India being a very big generic player, there is no impact.
Can we have the next question, please?
Sure. The next question is from the line of Aditya Chheda from InCred Asset Management. Please go ahead.
Yeah. Hi. Can you talk more about the strategic expansion in the biologics segment? You know, if you can leave some outlook for the same. Also, if you can call out the CapEx estimate number for 2026-2027, that would be helpful. Thank you.
The CapEx that we have planned, for biologics this year, there will be, we are expecting an outlay of around INR 25 crore, maybe a similar amount around that range for next year as well. The strategy is to basically integrate all the services that we have, which is right from preclinical to clinical research and the entire analytical component, and backward integrated to formulation development for the biologics. We have all the front-end pieces which are the more expensive part of the development process. The idea is to, with this backward integration, be provider, one-stop provider for our customers. That is the basic strategy.
Great. Can you call out the total, company-level CapEx estimate that you would have planned for 2026, 2027?
2026 , 2027, I don't yet have the company numbers. Now, this biologics, we know we are going to spend over a period of two years, and that's why I have that breakup. I will have CapEx numbers for next year only, around March time.
Sure. Thank you. That's it from me.
Thank you very much. The next question is from the line of Samir Palod from AUM Fund Advisors LLP. Please go ahead.
Yes. Hi. Am I audible?
Yes, we are audible.
Yeah. Thank you for the opportunity. I'm a little new to the company. Is it possible to just give us a steer on the revenue breakup between the four verticals? Even just broad numbers, which is the, I understand pharma is, but just what is number one, two, three, four for you?
Pharma is number one, wherein we offer preclinical research services, clinical research services, and analytical research and testing services. So that's.
How much would that be of the total revenue, approximately?
It would be around 65% of the total revenue.
Okay.
Food comes next. This is around 20%, food testing.
Okay.
The remainder two services are quite small. We call them environment testing services and electronics testing. They are the remainder.
Environment and electronics are the smaller ones. From a margin perspective, overall company level is 35%. Would, like, pharma and food be significantly higher and electronics and environment be slightly lower? Would that be a fair understanding?
More or less, I think they're all fairly close to each other, except barring maybe environment where the margins are not that great. Otherwise, the margins are more or less similar because there is a mix of services in all these verticals. There are some low-margin services. There are some very good margin services. Because of this mix, we are able to see the numbers close to each other from all these verticals.
Margins are fairly similar across the verticals, would be fair to say, except maybe environment, which is very small.
Yes. More or less, yes.
Okay. If you would like to fast-forward the next two, three years, where would you see the maximum growth coming from in these verticals, be it pharma, both preclinical and clinical, and food and electronics and environment? Just directionally, which do you think would grow the fastest?
I think when you look at the market, the growth rates of all these sectors is around 7.5%-9%. Given that the numbers are close there, no, we also think that all these services will grow well, more or less at the same speed. Some services occupy a large portion of our pie. Maybe, you know, smaller percentages for those, bigger revenue pie will be bigger growth rate, sorry, bigger absolute numbers. Environment, I do not think we will see any great growth rate. The other three, pharma, food, and electronics, they all should grow well.
Understood. If the sector's growing at 9% and you've grown quite consistently at 20%-25%, what does that mean? Does that mean that you're taking away market share? If you can also talk about the competitive landscape.
Yeah. For some services, probably we are taking away market share from others. For us, when we are looking at overseas markets, that's new business for us. That is also somebody else's market share. We would call that new business for us, overseas business.
Who would typically be your overseas competitors from whom you are gaining market share, and a few players in India that you compete with? That would be my last question.
Given the diversity of services that we have, competitors are also several. For example, overseas, typically when we are bidding for contract research services, we are competing with our own counterparts in India, and maybe a few European and American CROs. When you talk about food testing, the growth is coming mostly, actually fully, domestic. Some of it is, of course, coming from the growth of the market. Some of it is coming from the market share of maybe other competitors.
Can you name a few competitors in India that you usually come up with against in pharma and food?
In food, you have all the multinationals here in India, whether it is SGS or Eurofins or Intertek or Bureau Veritas or Tecna. All these companies are there. In pharma, they're, they're.
Pharma there?
Yeah. Go ahead, Sreenu.
Yeah. A lot of them. There's SGS. There's Eurofins. There is Catalent. You have Charles River. For each of our segments, we have multiple competitors in that area.
Okay. So this is a, um, it's mostly foreign companies, foreign consultants in India.
For food, a lot of European companies which are there in India, they are of competition. Then you have some domestic. In pharma, you have domestic as well as when you go outside, and these are the international competitors.
Thank you. I'll fall back into view. Thank you.
Thank you.
Thank you very much. The next question is from the line of Dhwanil from I -Wealth Fund. Please go ahead.
Good evening, ma'am. Thank you so much for the opportunity and congratulations on a good set of numbers. Am I audible?
Yes, sir, you're audible.
Yeah. Ma'am, just wanted to check on the CapEx part. I think earlier, last call, we were guiding for INR 100 crore CapEx in this year. Then in the first half, we've already spent INR 45-INR 50 crore. For the current full year, INR 100 crore is our target, or do you think we'll exceed that now?
I don't think we will exceed, but looks like we are on, as per the plan.
Got it. And ma'am, just on the overall tariff side, I think last when we were having some conversations, there are a lot of uncertainties which are there. If you can just help us understand how is the current scenario and how are you seeing demand for us?
You know?
Constraints in terms of market opportunities, we do not see any. Anyway, we are expanding our global reach. Not a challenge at this situation, at least for our pharmaceutical line of businesses. For some of the budding businesses, yes, we have to still increase our visibility and make our mark mainly for the electrical, electronic business. We are doing good in that area. We have already doubled our capacity, as you mentioned last time also. There are positive signs coming from multiple industries who need electrical and electronic support services that we have.
Got it. Sir, the new facility which has come up is more on the food and the electronic side of it.
We have, separate.
Yeah.
Go ahead. Go ahead. Complete.
Yeah. Sir, I just wanted to understand. On the pharma side, we have, we've kind of got a lot of machines, but slowly we are going to run that out. That's my understanding as well.
The capacity increase is for all the verticals. We have increased our capacity in food. We have increased our capacity for electrical, electronics. There is increased capacity for preclinical. Because of some of the divisions moving out of the main facility, we have also created more capacities for GMP testing, for bio-pharma testing. It is an overall capacity increase for all our major verticals. As such, there is no constraint in terms of machinery or in terms of space.
Okay. And, sir, we were highlighting that the newer machines and the revenue we are expecting to come from first quarter, FY 2027. That is more on the biologic side of the business?
Yeah. On the bio-pharma side of the business, yes.
On the bio-pharma.
On the new service areas, the formulation development, kind of service areas.
Got it.
Not existing because we also have an existing line of services for the bio-pharma as well as the large molecule segment. That is going to continue to, that is doing well, and it will continue to grow.
Good, good, Sreenu, sir. Thank you so much, sir, and all the best.
Yeah. Thank you.
Thank you very much. The next question is from the line of Pravesh Kochar from FourLion Capital. Please go ahead.
Hi. Thank you for taking my question. So now that the BIOSECURE Act is passed and it's, you know, in a slightly diluted form than what was expected, let's say, a year back, as you do your business development efforts globally, what are you hearing from some of those MNC customers in terms of where they are at, in terms of, you know, outsourcing their CRO operations to you?
We have already seen a lot of companies setting up shops in Hyderabad or in India, at least the top five or top six of the biotech, the large molecule days. Merck has announced, Sanofi has announced, Amgen has announced, Lilly has announced, Johnson & Johnson. Others may also be following up, GSK, and maybe the other European companies also. There are some of them working with the Indian partners who set up manufacturing operations here. Some of them are setting up global capacity or clinical centers. That is what is happening. There is no direct news from any of these companies. We have started working with some of them. We have already engaged with one major company. We are also in discussions with one more. I think as we wait and watch, once the manufacturing starts, then the requirement for CRO will increase.
Do these companies have any plans of, you know, doing the analytical testing also in-house, or is there some regulatory requirement that it has to be done independently, whether it's through you or one of your competitors?
Usually, if you look at MNCs or these innovators, these are all very innovator companies. They tend not to have testing and manufacturing on their own site because they'll be working with third-party vendors for manufacturing, so the demand for analytical services, the independent analytical services, would definitely be there, which is a positive for us.
Got it. Our analytical segment, is it fair to say the tests that you do would largely go to the CMC section of the regulatory drug filings that these innovators do, or is it more diversified across the development cycle? Like, if you can give some more context, where the analytical testing is really used for the innovators.
It is, towards both. We support, part of the R&D, development programs and, also into the CMC records. So it goes into both. Some of our services are for research during development, and some of our services are during the discovery phase, and some are during the CMC, filing phase, the release phase.
Got it. On the clinical research segment, if you can give us a sense of active, you know, trials that you are having right now in the non, sort of, the patient population, not the healthy population, and how that has been scaling up over the last two, three years.
We have already completed one trial successfully. That was our first pilot, I mean, a full-scale trial, and that has been also submitted to the European agencies. We have initiated two more now this year. Order books look good, so the pipelines are good. Because it is a new business, I think the proof was in delivering the first project. It has got good feedback from the client for whom we did the study. As I said, two studies we have already initiated. We have also intensified our BD operations for supporting the clinical trial business. India, as such, I think, even if you look at the competitive landscape, independent or standalone clinical trial business, who are doing patient, the patient PK studies, I mean, there is a good growth in their business as well. Yeah, it would be a good business to grow.
Got it. If I can squeeze just one last one on the biologic, CDMO facilities that you are setting up, I just want to understand, the driver of it. Did our customers ask that we backward integrate into formulations, or what was the thought process versus just, you know, sticking to pharma analytics, which we have already been doing for about eight years, as you said?
The push for supporting this formulation development has always been there, mainly on the small molecule side. But we never ventured into that area. In this one, yes, it is an integration that we are doing, because there's a lot of demand in the market for supporting the peptide developments or biologic biosimilars development. And there's a lot of space also available, even for companies who are just venturing in. They want support in cell line development. They want developing product development. They want to outsource these activities. What was happening in small molecule, now it tells the trend has come to the large molecule space as well. It was the right time to get into development services. That was the reason we ventured into the bio-pharma or large molecule support. It completes the whole cycle.
This is the first time we are getting into formulation development, and it's the right time because we have already six, seven years of experience doing analytical support services for large molecule. We see the demand growing. We see the products growing. More and more products are getting added. More and more products are getting outpatient. Companies want to have a bigger pipeline. The outsourcing is definitely increasing in this space, development support space.
Understood. Thank you very much.
Thank you very much. The next question is from the line of Veer Vadera from Niveshaay. Please go ahead.
My all questions were answered. Thank you.
Thank you very much. The next question is from the line of Rama chandra Godkhindi from an individual investor. Please go ahead.
Hello, sir. Can you hear me?
You're audible.
Yes, yes. Yes. My question is on the electronics testing. Last quarter, I remember that you were telling you had some discussions going on with the defense. Is there any update on any orders or anything on that one?
We have been supporting defense industries for now more than two, two and a half years. It is a continuous work. We are adding more and more clients in that area.
Okay. Okay. Yeah. Typically, what, how is the margin profile different from your normal electronics testing here in defense?
From the other businesses versus electrical electronics?
On the, for the defense, just on the defense side, how is the margin profile there when compared to other electronic testing, this one?
I may not have that information, but I think it's, in general, the same across industry because it's a niche testing area. So the margins are the same across because we are not into any tender business.
Okay. Okay. Sir, and my second question is on your this one. Since your large revenue comes from pharmaceutical, can you tell me about, how is, like, the order pipeline, whether it's largely more from the innovator side, or is it the other way, CMC, that is coming you are giving you a lot of revenue?
Most of our businesses, in the pharmaceutical area, we support the generic development. There, the generic pipelines are definitely stronger. Preclinical is the area where we support discovery. There it is, we can say 60/40 or 65/35, 35% towards discovery and 60% towards specialty chemicals and regular CMC as well as regulatory business.
Okay. Sir, my last question is on the industry. When we look at industry, a lot of biotech companies and innovator companies are now focusing on the large molecule discoveries and innovation. Is your company also moving towards that one only in the long-term strategy, that you also want to move towards large molecules only going ahead or do more of research and testing towards the large molecules only?
Definitely, because we don't want to miss the bus on large molecules. That's why the development setup that we have put, that is to support both the new biological development as well as the generic biological development. Anyway, we have research platforms set up for preclinical, clinical, and also part of our analytical services.
Okay. Yeah. Thank you, sir. Thank you.
Thank you very much. The next question is from the line of Shashank Choudhary, an individual investor. Please go ahead.
Yeah. Good evening. Congratulations on a good set of numbers. My first question is, is there any improvement in testing facilities on your side? In my perspective, are there any expansion in testing quality and speed, and are you using any type of new technology in testing in pharmaceuticals or food or in electronics as well?
I mean, it's deployment of the latest technologies which are available in the market. We always keep an eye out, wherever we can, deploy such technologies or such equipment which would fasten the testing process, reduce the dependency on people. That's a continuous evolution which happens by the instrumentation manufacturers and then deployment or implementation of those in our general work. Okay. We have multiple systems. There could be some liquid and systems. There could be higher throughput equipments which may come in, right? Yeah, at every stage, we are always on the lookout for such technologies. Vimta has always been an early adapter for any such initiative.
Thank you. My second question is, is there any other ideas to expand other than CMO?
CMO is the new expansion. We are a CRO, CR, CDMO.
Sorry, sorry.
CMO is the new vertical that we have come up as of now. Then mainly look out for any inorganic growth opportunities, which has always been our pursuit. I think we'll maybe either in Europe or U.S.
Okay. So my final question is, are there any PAT margin improvements in future, or is it going to remain at 19%?
Can you take this, Harita?
These are very good margins. We don't expect to see higher ones than this.
Okay. Thank you.
Thank you very much. The next question is from the line of Anand Agarwal, an individual investor. Please go ahead.
Hi. Thank you for the opportunity. My question is more fundamental in nature, and pardon me if I sound a little naive, right? Why would an innovator company go to Vimta Labs for their testing and not go to, like, a SciLife or an Anthem Bio, which provides end-to-end services from testing to manufacturing, right? What is the value proposition that we bring to the table?
You know, just by the word innovation, they are very, very secretive about their product development, right, because it's a complete world out there. Even when they are developing products, a single product gets developed in 20 different places, even if it's a simple API. It's by nature of that industry that they do not want to keep everything in one place. What usually happens in SciLife or Anthem Bio, the work that you are talking about is the initial screening process. Screening process where, because these companies are also doing a lot of chemistry, they are giving out a lot of molecules every week, every month. The initial screening, they will keep it there. After that, once it moves to a product phase or at a development phase, then the work gets distributed. That is a common trend in the innovator industry.
Sure. Thank you so much. I'll call back in a little. Thank you for the information.
Sure.
Thank you very much. The next question is from the line of Sanket Gupta, an individual investor. Please go ahead.
Thank you for the opportunity. I have a question regarding the food testing. According to me, the food testing industry is very small compared to developed countries. I think Indian consumers have been becoming more and more aware about the food quality and labels and all that. Do you think that this industry can grow faster if government agencies will push for more regulations and stricter guidelines?
Definitely. If you have government on your side, I mean, it's definitely going to increase for everyone.
If, if.
If you look at the food, food industry, the Food Safety Standards Act, I mean, that's a move in the positive direction.
Okay. If any company is developing new products like that, Indian consumers are getting more aware about protein and all that, sugar in the products, do you think that if new products are getting developed, then this will also create a better opportunity?
Definitely. Definitely. Because, when, so bigger companies, they would invest in. A lot of virtual companies which keep coming are smaller companies, either in the food segment or in the pharma segment, they need a lot of support in the product development. When they are getting into these niche areas or newer areas, the right way to do is to get take support from CROs who can give them outside support.
Okay. That means my understanding is correct that this will push the industry to good growth and all.
Yes.
Thank you so much. Thank you for all.
You're welcome.
Thank you so much. As there are no further questions, I would now like to hand the conference over to management for closing comments.
Thank you. So thank you once again to all the participants who have joined this call today. Good questions. Appreciate them. I also want to thank Systematix Institutional Equities, Vishal Manchanda, for hosting this call. Have a good evening, everyone. Bye-bye.
Thank you. Bye-bye.
Thank you very much. On behalf of Systematix Institutional Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.