Sequent API business below Rs 100 crore quarterly run rate
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.
SEQUENTSCIENTIFIC / Q2-FY26 / risks
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Sequentscientific · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
medium
Tariff uncertainty despite limited direct exposure
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.
CDMO revenue mix sustainability
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 to remain recurring
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.