VIYASH SCIENTIFIC — A New Pharma Platform Taking Shape

VIYASH SCIENTIFIC — A New Pharma Platform Taking Shape

The Story:
Viyash Scientific today is very different from the erstwhile SeQuent Scientific. The merger with Viyash Life Sciences has created a vertically integrated pharmaceutical platform spanning Human APIs, CDMO and Animal Health, with manufacturing, R&D and direct front-end distribution across global markets.

The most exciting opportunity, in our view, is Companion Animal Health. A large wave of blockbuster animal-health products is approaching patent expiry, creating a multi-year generic opportunity. Viyash has built a deep pipeline targeting molecules behind products such as Apoquel, Simparica, NexGard and Bravecto.

This is increasingly becoming a development-to-API-to-formulation-to-market story rather than simply an API company.

The Thesis:
Three things make Viyash interesting.

1. First, vertical integration. The group has >85% backward integration, a large API portfolio and global regulatory infrastructure. This gives it greater control over cost, supply and margins.

2. Second, direct commercial access. Through Alivira, Viyash already has front-end businesses across Spain, Benelux, Scandinavia, Turkey and other markets. The acquisition of BioForLife Italia for ~₹188 crore gives Viyash direct access to more than 80% of veterinary clinics in Italy — one of Europe's five largest animal-health markets. In India, it has also partnered with Boehringer Ingelheim for distribution and promotion of companion-animal products.

3. Third, the genericisation opportunity. Viyash has one of the deeper veterinary API/regulatory portfolios globally. The company already has products such as Afoxolaner and Fluralaner with US VMFs, while Sarolaner and Oclacitinib are under advanced development. This positions it directly behind some of the world's largest companion-animal brands.

The CDMO Optionality

The second engine is CDMO.

Viyash has built relationships with global innovators and is moving from being primarily an API supplier towards higher-value development and manufacturing partnerships.

As CDMO scales, Animal Health shifts towards companion animals and more formulations are sold through Viyash's own front-end, the quality of revenue and margins should improve materially.

That is the real operating-leverage thesis.

Latest Numbers — The Direction is Already Visible

Q1FY27 was strong:

Revenue: ~₹946 crore, +20% YoY
EBITDA: ~₹205 crore, +59% YoY
EBITDA Margin: 21.6% vs 16.2% YoY
PAT: ~₹79 crore, +115% YoY
Gross Margin: 54.1%, +220 bps YoY
Net Debt: only ~₹86 crore

Despite an incremental ~₹19 crore ESOP charge, operating profitability improved sharply.

The balance sheet is now close to net-debt free, giving Viyash the ability to invest behind R&D, new launches and selective acquisitions without stressing the balance sheet.

What Can Trigger the Next Leg?

1. Companion Animal Patent Cliff: A large genericisation opportunity opens between 2026–29. Viyash already has APIs/development programmes corresponding to several major global animal-health molecules.

2. New Product Launches: Commercialisation of products around molecules such as Afoxolaner, Fluralaner, Sarolaner and Oclacitinib can materially change the size and profitability of the animal-health business.

3. Europe Front-End: BioForLife provides an immediate Italian commercial platform. Viyash can now push its own pipeline directly through established veterinary relationships rather than remaining only a supplier.

4. CDMO Scale-Up: Higher-value innovator projects can become an increasingly meaningful contributor to growth and margins.

5. Margin Expansion: Better mix, backward integration, companion animal products and CDMO can potentially push gross margins higher from the current ~54% level over the next few years.

The Promoter Story — Carlyle + Haribabu

This is also an unusual promoter story.

Carlyle created the platform. Through its investment vehicles CA Harbor/CA Hull, Carlyle first acquired control of SeQuent Scientific and subsequently backed Dr. Haribabu Bodepudi, an industry veteran who spent around two decades at Mylan, including senior leadership roles.

Dr. Haribabu built Viyash Life Sciences through a combination of organic development and acquisitions before Viyash was merged with listed SeQuent in December 2025. He is now MD & Group CEO of the combined Viyash Scientific.

Importantly, Dr. Haribabu has significant personal capital committed to the company — ~₹400 crore, creating meaningful alignment alongside Carlyle.

Post-merger, the promoter group held approximately 61.3% as of June 2026, with zero shares pledged.

Today's Carlyle Block Deal — Overhang Reducing

The stock is weak today following a Carlyle-related block deal.

The market had already been aware since June that Carlyle was considering selling up to ~10% of Viyash. And today – it got executed in block window & open.

We view Carlyle's gradual monetisation differently from a promoter abandoning the business. Carlyle is a private-equity investor and eventual stake monetisation is part of its investment lifecycle. In fact, removal of the long-standing Carlyle supply overhang could ultimately be positive as the shares migrate to long-term institutional investors.

Valuation — This is Where It Gets Interesting

At around ₹265–270/share, Viyash has an equity value of roughly ₹11,700–12,000 crore.

Our thesis is not based on FY26 earnings. We believe the combination of Companion Animal launches + CDMO scale-up + improving product mix + direct front-end distribution can create a very different earnings profile over FY27–FY29.

Our working estimates suggest PAT can potentially approach ~₹650–660 crore by FY29, implying a CAGR of more than 40% from the current earnings base.

On ~₹657 crore FY29 PAT, today's market capitalisation implies only around 18x FY29 earnings.

For a near debt-free pharmaceutical platform potentially compounding earnings at 30–40%+, with substantial optionality from companion-animal genericisation and CDMO, we believe that valuation leaves room for a meaningful earnings-led re-rating if execution continues.

Our Thesis

Viyash is not just the old SeQuent with a new name.

The combination of Viyash's API/CDMO capabilities with SeQuent/Alivira's global animal-health platform has created something much more interesting: an integrated pharmaceutical company with manufacturing + IP + regulatory filings + formulations + direct global distribution.

The biggest trigger could be hiding in plain sight — one of the largest patent-expiry cycles in global companion-animal healthcare is approaching just as Viyash's product pipeline and distribution infrastructure are coming together.

If execution follows the opportunity, today's Viyash could look very different three years from now.