SEQUENTSCIENTIFIC Q2 FY26 earnings call.
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Revenue
₹424 Cr
verification pending
Revenue YoY
15%
reported change
EBITDA
₹65.7 Cr
latest reported figure
Source
bse pending
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
SeQuent Scientific delivered a strong Q2 FY26 with 15% YoY revenue growth to Rs 424 crore, driven by robust 18% growth in formulations (75% of sales) and 7% growth in API. EBITDA surged 47% YoY to Rs 65.7 crore with margin expansion of 330 bps to 15.5%, marking the company's crossing of its 15% EBITDA margin target. PAT nearly tripled to Rs 19.6 crore. Vash Life Sciences (consolidated entity post-merger) reported Q2 revenue of Rs 428 crore with 96% EBITDA growth and margin expansion to 28%. The NCLT approved the SeQuent-Vash merger on November 18, 2025, enabling combined reporting from Q3. Management targets 20%+ EBITDA margins going forward, sustained by CDMO contracts, new product launches (8 US launches in FY26), and manufacturing synergies. India formulations (6% growth this quarter) should accelerate in H2 from field force expansion. Key risks include SeQuent API tracking below Rs 100 crore run rate until Q4, though management remains confident of reaching that threshold in FY27.
Colored figures show movement against the previous available record.
Guidance to track
- Management confirmed minimum 20% EBITDA margin sustainability going forward, with Q2 combined margins already at 22%. The 20% target previously set for FY27 is now achievable sooner.
- Formulations business (75% of sales) expected to continue delivering double-digit growth driven by new launches, market expansion in emerging markets, and companion animal segment entry.
- India formulations grew 6% YoY in Q2; management expects field force expansion impact to kick in during second half, driving improved performance.
- Vash capex run-rate of Rs 60 crore in FY26 with no major capex expected in next two years unless pursuing inorganic opportunities (up to Rs 150 crore). Combined entity on track to be debt-free by FY27.
Risks flagged
- Sequent API business is tracking below Rs 100 crore run rate target. Management expects recovery from Q4 onwards but timing remains dependent on innovator customer scheduling decisions.
- Management claims no current tariff impact as US represents only 35% of Vash's formulation business with US-based manufacturing. However, broader geopolitical escalation or API sourcing disruptions could indirectly affect the business.
- Q2 margins benefited from initial CDMO service income and validation contracts. While management insists these are not one-offs, the sustainability of this revenue stream depends on continued contract wins and new product validations.
- ESOP charges of Rs 23 crore in H1 FY26 will continue as recurring P&L item for next 2-3 years, with a new scheme being finalized for Vash post-merger. This will partially offset operating profit improvements.
Key quotes
- We would recall that a few quarters ago we had set ourselves a target of crossing 15% EBITDA and moving to high teens. We are now firmly on that path while also improving our profit after tax substantially.
- Whatever we indicated [for] FY27 [20% margins] actually it's going to happen from now right sir
- After the merger, we will be a far more R&D and science-driven animal health company. In many markets which are less regulated, the regulations are getting tighter on animal health products, and we are very well positioned compared to some of the other players who may not have the kind of quality and regulatory capability.
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