VIMTA LABS LTD (NSE: VIMTALABS) Q1 2026 Earnings Call dated Jul. 21, 2025
Corporate Participants:
Unidentified Speaker
Harita Vasireddi — Managing Director
Siva Rama Krishna Kambhampati — Chief Financial Officer
Analysts:
Unidentified Participant
Vishal Manchanda — Analyst
Punjan Shah — Analyst
Aditya Chheda — Analyst
Umesh Matkar — Analyst
Kanav Garg — Analyst
Ajay Surya — Analyst
Lokesh Manik — Analyst
Ashutosh Garud — Analyst
Ankur Kumar — Analyst
Vinayak Mohta — Analyst
Sagar — Analyst
V. P. Rajesh — Analyst
Veer Vadeza — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Q1FY26 earnings conference call of Vimta Labs Limited hosted by Systematic 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 touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Vishal Manchanda from Systematics Institutional Equities. Thank you. And over to you sir.
Vishal Manchanda — Analyst
Thank you, Steve. Good morning everyone. On behalf of Systematics Institutional Equities I welcome you to the Q1 FY26 earnings call of Vimta Labs. We thank the Wimta management for giving. Us an opportunity to host the call.
We have with us the senior management of the company represented by Ms. Haritha. Vasi Reddy, Managing Director, Mr. Satya Srinivas. Nirukonda, Executive Director Mr. Siva Ramakrishna, Chief. Financial Officer and Ms. Sujani Vasireti, Company Secretary.
I’ll now hand over the call to the company management for opening remarks. Over to you, sir.
Siva Rama Krishna Kambhampati — Chief Financial Officer
Yeah. Thank you, Vishal. Thanks. Good morning everyone and a Warm welcome to Q1FY26 earnings call of Vimca 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 construed as a forward looking statement must be reviewed in conjunction with the risk that the company faces. The conference call is being recorded and the transcript along with the 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 film collapse 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 Mr. Haritha Vas Reddy, Managing Director, Mr. Sachin Srinivas Nirukonda, Executive Director. Myself Mr. Sivram Krishna Kamapati, Chief Financial Officer and Ms. Sujini Vasiledi, Company Secretary.
Now I would request Ms. Sarita Vasiveddy, Managing Director of Intel Apps to provide you with the updates for the quarter ended 30 June 2025. Thank you. And over to you, ma’a m.
Harita Vasireddi — Managing Director
Thank you, Shiva. Thank you, Ishai. Good morning everyone. Thank you for joining our Q1 FY26 earnings call today. I’m pleased to share that in this quarter Vimta has recorded highest ever revenue in a quarter, putting us on a very strong growth trajectory this quarter. Winter has witnessed substantial year on year growth of 31.4% with revenue coming at rupees 993 million maintaining our strong margins. The market shifts, the emergence of new technologies and the continuous innovation in the pharmaceutical and nutraceutical sector have significantly heightened the focus on product quality and safety, an area where Winter is distinctly well positioned Coming onto the services we provide.
As many would know, the pharmaceutical testing and research services is a major revenue contributor. The growth in these services have met our expectations. Clinical trial pipeline looks encouraging and Linta is pleased to report that we completed a successful US FDA DCT inspection. This was an unannounced inspection and happy to share with you that there were no 0483 observations. We have also received a letter of CGMP compliance from AMSN EMA during the quarter. These outcomes underline Binta’s dedication to excellence in quality and scientific precision. On food testing, we are observing consistent growth in business. The business model is to be agile and adapt to market requirements.
We started a new food lab in Andhra Pradesh to cater to the market needs. The electrical and electronics testing services have been stable during the quarter. Last quarter we embarked on a new chapter with our expansion into biologics contract research and development services. I would like to share that currently equipment of procurement is in progress and in line with the timelines of commercializing the same from Q1FY 2027 as a part of our efforts to enhance shareholder value, the Board has approved a bonus issue in the ratio of 1:1 showcasing the company’s strong financial position, confidence in future growth and commitment to rewarding its shareholders.
Looking forward, we are confident in the continued strong performance across all our service offerings and with this I would like to hand over the call to Mr. Shivaramakrishna to discuss the financials. Over to you shiva.
Siva Rama Krishna Kambhampati — Chief Financial Officer
Thank you Ms. Haritha. A very good morning to everyone and we appreciate you taking the time to join our Q1 FY26 earnings call today. I’ll begin by presenting an overview of our financial performance for the quarter ended June 30, 2025. Following that, we’ll open the session for your questions before diving into financials, I’d like to mention that in light of the divestment of diagnostics and pathological services business announced on August 30, 2024, the figures for the previous period have been regrouped to enable a like to like comparison with the current quarter. I’ll start with the financial highlights.
The Total income for Q1FY26 stood at Rupees 993 million as compared to Rupees 756 million in Q1FY25 up by 31.4%. Year on year, EBITDA stood at Rupees 354 million. In Q1FY26 as compared to Rupees 266 million in Q1FY25 up By 33.1%. Year on year, EBITDA margins for the quarter stood at 35.7% profit after tax in Q1FY26 stood at rupees 189 million as compared to Rs. 140 million in Q1FY25 with a growth of 35.9% year on year at margins for the quarter stood at 19%. I would like to highlight that despite external factors such as cost us, we have maintained our margins on the balance sheet side.
We continue to have a net debt free balance sheet with cash and cash equivalents of Rupees 379.3 million. With that we can now open the floor for any Q and A. Thank you.
Questions and Answers:
operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset 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 to the management may press star and 1. Our first question is from the line of Punjan Shah from Molecule Ventures. Please go ahead.
Punjan Shah
Hi sir. Thanks for the opportunity. My first question pertains to the biological segment which we are trying to foray in which the revenue and the commercialization will happen in Q1FY27. So just wanted to broadly understand right now how the dynamics has been working on in terms of competition, in terms of industry sizing. What are the challenges might we face initially once we ramp up the capacity and what are the advantages? We have cross advantages as we already associated with the pharma companies as well. So just wanted to give a broad thought on what services we can provide and how it will help to cross that.
Harita Vasireddi
Okay, thank you for that question. I will start with the advantages first. We’ve already been working with our pharma clients in helping them with their new product developments, be it small molecules or peptides and one off cases of biologics. So we have been providing these companies with characterization services, any other analytical services, preclinical and clinical research services. The idea behind pursuing a contract research and development of large molecules is to get the benefit of all these services and add also formulation development, making it a complete end to end package for our customers. So that should be the advantage that Winter provides because although there is competition in the market for contract development and research, not everybody is having clinical research and analytical research and analytical as a complete package.
So there WINTA will stand out to be quite unique. Coming to competition yes, there is competition already in the market. More from CRBMO contact research, development and manufacturing organizations. There are some leading companies here and their growth itself I think is a good indicator that this market is getting good spotlight from the industry. Not only domestic but even international. The opportunities will be from everywhere across the globe if we are able to maintain our quality and deliver as per the promises. Some of the challenges that we envisage is that right now, although the future everybody talks is with respect to biologics, we are yet to see great amount of traction in India on biologics.
The top few companies are working on them, but I think today the focus is more on peptides. But the good thing is whatever capabilities and facilities we are setting up at Winter, they are good to be used even for peptides in addition to even biologics.
Punjan Shah
Size and the growth opportunity.
Harita Vasireddi
The size and growth opportunity May I ask you to please refer our annual report? I think we have given a lot of details there. I don’t have the numbers specifically in front of me, but overall the pharmaceutical services contract, research and development services I think are growing anywhere between 9 to even up to 12, 13% globally.
Punjan Shah
Right. Can you give me a broad thought on how we are planning out in terms of electricals and electronic testing? Because right now we are seeing a good quantum of companies being planning to foray into India for the domestic manufacturing as well. So are we seeing and even in the defense as well, Government is focusing on manufacturing and giving indigenous focus. So how we are planning out the electricals and how we are envisioning the growth in this space for coming next two to three years.
Harita Vasireddi
This is a sunrise industry. It’s a new industry, especially the testing services for electronics. I think the major push for these services will come from defense and telecom in the next couple of years. Defense especially because I think India has announced that they want to Indigenize a lot of the defense components manufacturing within India and Hyderabad is actually quite a big hub for such OEMs. And this is a three year old business for us. It is growing organically. But I think the future is bright because even the regulations are just beginning to be developed. So as the industry matures, as the manufacturing scale matures, I think the opportunities will only increase. Testing Laboratory
Punjan Shah
okay, could you just give a broad breakup on all the three verticals which we have been right now? So can you just give us a breakup on the revenue and EBIT margin if it’s possible?
Harita Vasireddi
Top line I can give broadly. About 65 to 70% of our business comes from pharmaceutical testing and research services. About 20% from our food testing activities and the remainder 10% is from electronics, electrical testing and environment testing.
Punjan Shah
So this is for Q4, right?
Harita Vasireddi
Overall, this has been more or less how the pie has been provided for quite a few years now.
Punjan Shah
Okay, okay, okay, got it. That is for my Sir, I will join back in the queue. Thank you so much for answering all your questions.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press Star and one to ask a question. The next question is from the line of Aditya Cheddar from Incred Asset Management. Please go ahead.
Aditya Chheda
Good morning. Thank you for the opportunity. My question is an update on the expansion that we are currently undergoing of almost 2,000 square feet. I think phase one was 1 lakh 60,000. If you can update us, you know how much of utilization has already begun and the status of the second phase of the expansion. Where are we in that phase? If you can just broadly talk about the same, these are the questions. Thanks.
Harita Vasireddi
Sure. We’ve added approximately 200,000 square feet of lab space. And what we have done is our food testing activities have already occupied the new facility which has in fact created some space for us in the existing Legacy building. So the Legacy building we are converting to accommodate contract labs and also the biologics contract research and testing activities because we have been having space constraints for our pharmaceutical testing. So the Legacy building is now being remodified and restructured to accommodate expansion of the pharmaceutical services. The new building not only houses the food testing, we will also be occupying it for pre clinical testing.
So right now the occupation from the food side is complete because we have completely moved it from one building to another. Preclinical, they will occupy as they need more animal testing rooms. So this is going to be quite organic. The other aspect of this expansion is that we also Need a space to add another EMI EMC chamber. So that chamber has been installed and qualified the during the last quarter. What we’ll be doing is now to move the first chamber also into that building so that all the chambers are together and the equipment are optimally used so that exercise is going down.
Now since the second chamber is up, we will be shutting down the first chamber, moving it to the new building, qualifying it, and then we can have the opportunity to use these together.
Aditya Chheda
Got it ma’. Am. That’s it for mine.
operator
Thank you. Participants, if you wish to ask a question, you may press star and 1. Ladies and gentlemen, if you wish to ask a question to the management, you may press star N1. The next question is from the line of Umesh Matkar from Sushil Financial Services. Please go ahead.
Umesh Matkar
Yeah, thank you for the opportunity. I would like to know about the clinical trials I think we had before doing one clinical trial for a client. So what is the progress on the same? And also you mentioned in your opinion. That clinical trial pipeline is encouraging. So like to know about like what. Is the size that we are chasing and how close are we for finalizing the deal? Thank you.
Harita Vasireddi
The pipeline, like I mentioned is quite encouraging. During the last quarter we have received decent number of inquiries and out of which a couple of them are in the final stages of getting converted. The rest also look promising. Like I was telling in some of my previous calls, this is a new activity for us. So initially it will take us some time to build a clientele. But happy to share that this is progressing well.
Umesh Matkar
Okay, thank you ma’ am and wish. You all the best.
Harita Vasireddi
Thank you.
operator
Thank you. The next question is from the line of Kanal Garg from Garg Advisors. Please go ahead.
Kanav Garg
Hi ma’. Am. Audible. My first question is what type of services do we provide in clinical trials and in what phase do we provide these services?
Harita Vasireddi
So in clinical trials we have capability to do right from phase one to phase, the post marketing surveillance also. And the trial that we have completed so far is a phase two trial.
Kanav Garg
Okay, fine. Typically if a company, let’s say sponsor, engages with you for let’s say phase one or phase two. So do they go till the phase four? I mean do they stay with us for that particular drug?
Harita Vasireddi
Too soon to answer because we have just done one trial, we would hope that if the molecule or the drug has done well, then we hope that they will do the next phase of the trial also with that.
Kanav Garg
Okay. And ma’, am, my second question is I think there is a significant slowdown in biotech funding in the US So just wanted to understand what percentage of revenue come from biotech and are we seeing any slowdown there or there is a change in.
Harita Vasireddi
I, I don’t have that calculation with me here but we are not observing any slowdown in from that segment of the industry.
Kanav Garg
If you allow me one more question. So given that a lot of uncertainty is happening in the US right because of President Trump, so how are we managing that? Do we see any risks because of it or it might be beneficial for us? Just your viewpoint on that?
Harita Vasireddi
Definitely there’s a risk. If I think the tariffs and all are increased then the exports might get impacted. And so far Winter’s trend has been to cater to the high quality requirements of the developed market. If the developed markets are having such kind of initiatives rolled out in the future, then definitely it’s a risk. But so far we have not seen any impact of such possibilities.
Kanav Garg
So we are not exploring any possibility of let’s say having a facility in the US Just thinking out loud, let’s say in case the carriage they come because we have capabilities. So does it make sense to have a center in the US which can do some partial work there in case the tariffs come?
Harita Vasireddi
I don’t think they are directly related. If the tariffs increase then the business from India itself will I think come down. But as such, generally speaking it’s a good idea to have an office there, no doubt, or a small laboratory there. And in the future it will be our endeavor to look at such opportunities. But for now nothing is on the cards.
Kanav Garg
Thank you. Thank you ma’. Am. Best of luck.
Harita Vasireddi
Thank you.
operator
Thank you. The next question is from the line of Ajay Surya from Niveshay. Please go ahead.
Ajay Surya
Congratulations ma’. Am. My question is firstly when I Look at in FY25 we did a capex of almost around 80 crore of which maybe 25 to 30 crore was for new building and the remaining was for equipment. And in FY26 also we play we plan a major capex of around 80 to 90 crore of which we have already spent 26 odd crores in this Q1 previously the major part of the capex was towards infrastructure building and now if I get it right it is going to be to equipment capex. So ma’ am, if you can break this capex into how much of this capex was for replacing older equipment and how much was for the newer one and from the newer ones how fast can we expect this to contribute to our revenue?
Harita Vasireddi
Okay. Last year majority of the Capex was spent on the new facility that we have built. So it’s not 20 crores. I think it’s upward of 60 crores. Shiva can confirm. And the remainder was for equipment and equipment. It’s a routine spend for us whether it is to add new equipment or to replace existing old equipment. Typically what we use is depreciation that is available for us. So this is continuous. Again this year we have a large Capex outlay again to complete the final payment for that new building that we have done. And also about 30 crores is planned for the biologics contract research and development services set up.
And the remainder is for expanding our capacities across our business units.
Ajay Surya
And like how fast can this new equipment start to contribute? Will it be immediate or there will be some lag? If you can give more details on that.
Harita Vasireddi
Yeah, equipment typically we just buy just in time depending on the lead times. Equipment are usually taking just in time. They are not bought in advance. And you know we wait for business unless of course it is for new capability setup.
Ajay Surya
Got it. My next question is in the opening commentary we mentioned that on the clinical services the pipeline looks strong and we started with clinical not a long ago and we have been dominant on the analytical and preclinical services. Now if you can highlight going forward with service category is going to drive the future for MTA and which service category is evolving. Also if you can give more detail on in terms of margin and profitability, are these going to be significantly different when we go ahead with a larger portion of clinical services in our business or it’s going to be more or less on the similar lines?
Harita Vasireddi
The pharmaceutical industry is a very mature industry and it keeps growing at a healthy growth rate year after year. So the opportunities, whether it is preclinical or clinical research or even GMP analytical testing opportunities are equal across the board. We also see that the outsourcing has increased across the globe for all these kinds of services. So I won’t be able to give any margin breakup because that’s not something that we share. But I can just say that whatever margins we are experiencing now are very good. Margins even by global standards are very high. So in the future you can expect that we maintain them plus minus a couple of percent.
Ajay Surya
And but ma’, am on going forward like with service category, like is it going to be more of analytical, pre clinical or clinical which is going to drive future for wimpa?
Harita Vasireddi
I would say all of them. Like I said, opportunities are there in all of them and we are putting our efforts in all the major areas. So we want to grow in all the service.
Ajay Surya
Got it. And then one last question. Like you can give the trend of consolidation and the industry which we operate in and going forward, like the. The growth for this our industry is dependent on like will it be more manufacturing that happened in the pharmaceutical sector which will mean more business to us or is it going to be more R and D spend by these pharma companies which will mean more business to us?
Harita Vasireddi
I think both manufacturing and R and D they require services from a contract testing and research lab. So whether it is growth in manufacturing or R and D, I think there will be opportunities for us. But as such, I think they are little interrelated. Without R and D there will not be a lot of manufacturing growth, I think.
Ajay Surya
Got it, ma’. Am. All the best.
Harita Vasireddi
Thank you.
operator
Thank you. The next question is from the line of Lokesh Manik from Vallam Capital. Please go ahead.
Lokesh Manik
Yes. Hi, Good afternoon ma’ am and the team. My question was on the annual report I saw that you know, exports have increased significantly from about 80 crores to 150 crores. So some color on that. On the nature of which services do they pertain to? I’m assuming it’s mainly pharma within the pharma space. But within that which subdivision would it be preclinical, clinical or analytical and sustainability of this revenue from exports?
Harita Vasireddi
Exports have grown proportionate to the overall growth in business. And you’re right, the export revenues are mostly from pharmaceutical services only. And major services we are able to sell overseas are preclinical clinical research and little bit of analytical as well. And regarding sustainability, I would say that definitely sustainable. We would actually like to grow them.
Lokesh Manik
Okay. So they were. They had seen a dip last year due to some slowdown and then the recovery has come. Or this is on a secular trend that you are seeing going forward?
Harita Vasireddi
Yeah, sometimes. Now the global uncertainties have been there post Covid. I think those uncertainties in one way or the other have been hovering in the market. So when those things happen, there will be an impact. But when that happened for us in the previous years, I think the domestic market really picked up for us.
Lokesh Manik
That’s it from my side, man. Thank you so much.
operator
Thank you. The next question is from the line of Ashutosh Garud from Ambed. Pms Goethe.
Ashutosh Garud
Hey. Hi, I’m audible.
operator
Oh yes sir.
Ashutosh Garud
Okay. I just wanted to understand the kind of capex we have done in the last year. So that a is the entirety of the capex in Available from a production perspective or is there any capacity yet from stream? So in that regard, what would be our capacity utilization? And the next part I would want to know is what is the maximum revenue potential with the given capex and cross block capacities which you have?
Harita Vasireddi
Okay, number one was you’re talking about capacity utilization. Like I said, our business is growing organically. What we have done is we have created infrastructure for future growth that will serve our growth for at least the next half a decade or so. So utilization will be organic because the business is growing organically. As we grow our business, then there is space for us to use because the capacity for a laboratory is three dimensional. One is a space, one is the people and the third one is equipment. People and equipment you typically add as you need.
But so once in a while when you run out of your existing laboratory infrastructure space, you have to create a new building. And that’s what we have done now. So capacity utilization will be organic. Coming to the revenue potential, again, very difficult for us to estimate, but we think this will be good for the next half a decade of growth.
Ashutosh Garud
And what could that be? I mean what is the number from a space perspective? Let’s say I understand the other two will get add up as demand professors, but from a space perspective or what kind of revenue you need not have Incremental space is what we have.
Harita Vasireddi
Depends on the mix. Very difficult to put a number on that. Give me a year or so, maybe I’ll be able to predict that that more accurately.
Ashutosh Garud
And the other part of my question was is there any new capacity and is there any new from a production perspective? Could we see. Because if you see last three or quarters we have been in that range of 90 to 100 crore kind of a top. Can we see a demand push which is coming in the immediate future in the next 2, 3/4 where we see this new capacity really picking up from a revenue perspective on a sequential basis.
Harita Vasireddi
Also, yes, all the spaces that we have created, we’ve already started using them. We have brought in new equipment and that is installed in these places. So utilization has begun.
Ashutosh Garud
And lastly from a margin perspective, you have improved your margins quite dramatically, which is quite commendable. So is there any downside with for this margin profile EBITDA margin of around 35% or you’re comfortable with the kind of margin we are doing, the exports, the proportion growing and the kind of product business mix which we are getting into.
Harita Vasireddi
So your comments on that the margins what we have are excellent right now. But like I said, there’s a lot of capacity that we have added and with that comes a lot of maintenance also. And we are also redesigning some of our labs so there’s a cost to that which we will spend on. So in that aspect we can expect the margins to come down a few basis points before again it destabilized.
Ashutosh Garud
Thank you ma’. Am.
operator
Thank you. The next question is from the line of Ankur Kumar from Alpha Capital. Please go ahead.
Ankur Kumar
Hello ma’. Am. Thank you for taking a question. Congrats for a good set of numbers. I wanted to understand on the growth front as in we had said that this year’s exit quarterly revenue would be around 120 to 125 crore types. Annual run rate of 500 types. Are we sticking to those numbers? And on margins that you said we expect to as into reduce little and. Then come back again. So how much reduction are we expecting? And by one, by when.
Harita Vasireddi
Margins might reduce by 1 or 2% and this could happen in the coming quarter, for the coming couple of years. Very difficult to predict. Okay. And coming to whether we are on track with that 120 to 125, third quarter. Yes. That’s where our records are fully being booked and we are striving very hard to reach that goal.
Ankur Kumar
Got it. Any color on the environment, how are. We seeing good demand? How are we seeing things overall?
Harita Vasireddi
The demand is positive across all our sectors. Barring the little activity of environment that we do, demand is good.
Ankur Kumar
Sure. Thank you. And all the best.
Harita Vasireddi
Thank you.
operator
Thank you. The next question is from the line of Vinayak Nota from Axia India. Please go ahead.
Vinayak Mohta
Hi, good afternoon and congrats on the nature of numbers. I had a couple of questions just to clarify. First, you did mention that you have enough capacity space now for the to manage the growth for the next half a decade, which means for the next five years. Is that right?
Harita Vasireddi
Yes.
Vinayak Mohta
Understood. And while I understand the quarterly variation on the margins date because of the maintenance and other costs that are coming into the picture, but sustainably, be it any division of food pharma or electrical, your inherent business margins are in the range of 35 to 36%. Is that, is that a fair understanding?
Harita Vasireddi
Yes, they are. They are upwards of 30 at EBITDA level.
Vinayak Mohta
Understood. And so just want to understand then. From a competitive dynamics perspective, how do you see the industry evolving? Because given the kind of margins and opportunity that you are seeing coming up, we remain one of the largest, one of the big players in the industry. So how are you seeing the Competitive dynamic shaping. Especially given the fact that there’s a trend of outsourcing, of testing of different value chains. Especially given the kind of opportunity India is bound to see. So just want to understand our capabilities and the competitive environment a little better.
Harita Vasireddi
Capability wise. We are a 40 year old organization. Our capabilities have been continuously evolving as per the market needs and that will continue. We will continue to morph ourselves, evolve ourselves as per the needs of the industry. Couple of trends that we are seeing is a lot more laboratories are coming up in the market, in Indian market and that is creating a cost compression. And what is also happening is because of the proliferation of more there is a strain on qualified manpower also. So far India was an attractive proposition for the overseas markets because of the low cost of manpower that we have or the low cost of infrastructure that we have.
So this advantage might not be as good as it is in the past. Therefore I think it’s very important that contact research investing organizations focus a lot on continuous innovation in creating efficiencies, better efficiencies in the operations, maintaining their quality. You see many companies have come and they were more like fly by night operators. They couldn’t sustain the rigorous regulations that are required in this industry. But across all these time periods, winter has stood the test of time. We have continuously evolved, we have continuously invested in optimizing our processes, making them more efficient, increasing the productivity of our people.
What we have done is we have I think been one of the frontrunners to invest in automation and digitization of our laboratories. Not only does this increase their efficiency, it also gives a lot of assurance on the quality of the processes. These are something that we do that keep us ahead of the others. We have never hesitated to invest. We know that to grow a business you have to invest in it. And that’s what Yumta has been continuously doing and growing.
Vinayak Mohta
Understood. And then so you, you talked about. Defense also growing as a very large opportunity in the years to come. How do you see the business mix evolving over the next, you know, four to five years? How do you see the mix at the end of maybe three to five years? Especially given the kind of traction that we’ve been seeing.
Harita Vasireddi
We are optimistic, can’t exactly put a finger on what is the kind of growth that is possible because it’s early stages for electronics and electrical testing. A lot has been happening in the geographies of maybe Bangalore or in the north, around Delhi, Hyderabad. We were the first private laboratory to set up an EMI emc and immediately we saw a response because we went and filled in a gap. Now what will really help to grow this business is again tightening of the regulations or introduction of new regulations for various products by the regulatory agencies of the country and also increase in exports unless a country starts exporting.
Our experience is that the focus on quality is not that high. So these two things have to happen. And for these two things to happen, the industry actually has to grow, the manufacturing has to increase. And I think there is a good government push, I would say, or a good environment that government is creating for these things to happen in the future.
Vinayak Mohta
Understood. And one last question. So whenever we are doing these testings for the pharmaceutical companies and we watch whatever we’ll be doing going forward, are these a mix of innovators and generic companies or how does the mix happen between the testing customers?
Harita Vasireddi
It is a mix.
Vinayak Mohta
Understood? Understood. Perfect. Great. Thank you. Thank you so much.
operator
Thank you. The next question is from the line of Wasant Banal from NVG Investment. Please go ahead.
Unidentified Participant
Yeah, good afternoon. Just wanted to know any plan to get into CDMO business?
Harita Vasireddi
Not as of now, sir, but maybe in the future.
Unidentified Participant
Okay, so you may go on. You are not ruling out this possibility. And if that be the case, then how you see the growth potential in your existing business of research and testing? What are the growth potentials you see for, you know, next few years?
Harita Vasireddi
CDMO business is actually quite wide.
Unidentified Participant
No, no, I’m not talking about met. Excuse me, I’m not talking about CDMO business. Now you. As of now, there are no plan to get into cdmo. So my next question is what kind of growth potential you see into your existing business of research and testing?
Harita Vasireddi
I think we have been growing at a healthy cagr during the last five years and we hope to continue that. We want to give it a push because we have a goal to achieve this year. But I think year on year, if you are growing at that rate of 15%, anywhere between 15 to 20%, then you are growing at a speed that is double of the industry. So that’s a good growth rate to target?
Unidentified Participant
Yeah, yeah, definitely it is a good growth rate. And so there are enough headrooms for that and there is a good visibility for that. Am I right?
Harita Vasireddi
Yes, yes.
Unidentified Participant
Thank you very much.
operator
Thank you. The next question is from the line of Punjan Shah from Molecule Ventures. Please go ahead.
Punjan Shah
Thanks for the opportunity. Again, just wanted to understand first of all on the clinical trials. So we have, we provide the service for phase one to phase four. So how our unit economics work? So major spend or the major Cost will be evolved for the phase one trials. Then eventually the as then when the molecule gets developed the R margins and the R value contribution to the expense decreases. Is that understanding correct? So major R chunk of profitability comes when we provide clinical trial 3, 4 initial expenses would be much more higher compared to the phase three.
Phase four.
Harita Vasireddi
The margins for each trial they actually vary significantly depending on the therapeutic area of the trial. We know this in theory we are yet to experience. The first trial that we have done was a complex therapeutic area and therefore the margins were good. But in the upcoming days the trials we are open to do any kind of trial. So right now our focus would be to build a track record in delivering good trials for our customers Rather than focusing on per se the margins. Because you have to compete at whatever the market price is at.
Punjan Shah
Got it. In the biological segment which we are planning to foray. So how are unit economics works? So as. As you know that the biologic segments are much more crucial and much more have a deeper understanding compared to the regular trials. So how we have been. So can you just break up into unit economics or the expenses versus the revenue contribution. How it, how it will happen, how the split will be there. If you can explain, you know much more about the things
Harita Vasireddi
that’s too nitty gritty sir. And that’s also competitive sensitive information that I would not like to disclose.
Punjan Shah
Thank you so much. That is from my side. Thank you so much.
operator
Thank you. The next question is from the line of Rohit, an individual investor. Please go ahead. Mr. Rohit, your line has been unmuted. Please go ahead with your question. As there is no response we will move on to the next question. It’s from the line of Sagar, an individual investor. Please go ahead.
Sagar
Yeah. Thank you for taking my questions and congratulations to you and the team on a very good set of results. I have two, three questions. One is. I mean this is more color on the capex. I was a little confused. 90 crores. Is that capex for the current year? I mean what is the breakup for CRD MO and other CapEx and the status of the JNPT Food lab man. I mean whether it stabilized operations. And thirdly, I mean would you be comfortable to say. I mean based on the capex that we’ve completed the company’s turnover can double from here in the next three years.
That’s it from my side. Thank you.
Harita Vasireddi
Double in three years could be a turning point. But again given the opportunities, why not? I would say that’s a possibility. The other thing Was on JNPT Food lab samples. Yes, they have stabilized. They meet our expectations. Coming to CAPEX layout for this year, it’s around 100 crores is what we have declared. 30% of it will be for the contract research and development services set up for biologics. The rest will be capex either to buy new equipment or replace existing equipment. And also like I was mentioning a little earlier, we are investing quite a bit on digitizing and automating our process.
So some expenditure is expected even in that direction.
Sagar
Thank you so much and all the best.
Harita Vasireddi
Thank you.
operator
Thank you. The next question is from the line of VP Rajesh from Banyan Capital Advisors. Please go ahead.
V. P. Rajesh
Hi. Thanks for the opportunity and congratulations on a good set of results and the successful US inspection. Just wanted to follow up on the EBITDA question. If we look at your margin, basically 1 percentage point is roughly around 1cr. And given the growth that you are expecting in this year for the rest of the quarter for next year, wouldn’t it be possible to hold on to this 35% margin?
Harita Vasireddi
We are going to try, but it’s going to be a little challenge. Like I said, the new facility has come up. It requires maintenance, it requires people to maintain and also prices are not going north in the market but the cost of human resources is increasing year on year. So I’m not able to predict for several years ahead. But in the next few years we can see little compression at the EBITDA level. But like I said, what WINTA is having are, I would say to best of my knowledge they are very good EBITDA margins. Even if you compare with the global leaders, even if it is a point or two reduction at EBITDA level, it is still very good. I would say
V. P. Rajesh
yes, definitely there are excellent margins. I was just trying to understand the interplay between your increase in revenue and the ability to absorb the additional cost against that particular group. So anyhow, all the best and thank you.
operator
Thank you. The next question is from the line of Veer Vadeza, an individual investor. Please go ahead.
Veer Vadeza
Hello. Am I audible?
operator
Oh yes sir. Please go ahead.
Veer Vadeza
So my first question was what is your perspective on the competitive intensity with the within the CRO industry? Particularly when we see companies like Sting Gene and Vida Clinical generating a significant portion of their revenue from export whereas export contribution in our business is around 30% as I understand. And further, as per my understanding, research is primarily conducted abroad while manufacturing is done in India. Given this dynamic, what are your thoughts on our position as a CRO in this Context. And my second question was in earlier calls you mentioned that LC GC is our vendor.
So can you please tell what kind of services we take from them?
Harita Vasireddi
Okay. LCGC is a vendor for several things, right? From laboratory agents to laboratory furniture. They have multiple things to offer. Coming to King Jean and Veda, they are very different business models. Yes, we have some services that overlap, but it’s not like to like comparison. And your comment on whether, you know, a lot of manufacturing is done in India vs R&D. Again, depends again what type of R and D. The preclinical research. Both the US and European markets and even other countries, they are quite open to outsourcing them. And with the India is an attractive destination.
Likewise, clinical research. Given our huge population and the strengthening of regulation, clinical research also India is a good destination. So manufacturing, yes, is picking up off late. But the trend to outsource different kinds of research and testing activities to India from overseas is not uncommon. It has been growing over the years.
Veer Vadeza
Okay, okay, thank you.
operator
Thank you. The next question is from the line of Aditya Chiddha from Internet Asset Management. Please go ahead.
Aditya Chheda
Yeah, hi. The export revenue was up by almost 50 crore this year. What would be the key growth driver there?
Harita Vasireddi
Pharmaceutical services, mostly on the preclinical side and a little bit on the clinical research and CGMP analytical services as well.
Aditya Chheda
Does this involve a new client or a dedicated center for a new big pharma or this is a non commercial business.
Harita Vasireddi
There is a combination of different varieties of relationship that we have with our customer partners.
Aditya Chheda
Okay.
operator
Thank you. The next question is from the line of Avnish Verman. Please go ahead.
Unidentified Participant
Yeah, hi, good afternoon. Thanks for taking my question. This is a question on Paris. I mean assuming there is some tariffs levied on the pharma sector, I just wanted to understand like how does that cost get passed on into the supply chain? I mean do you absorb it or do you pass it on completely to the customers? Or is it like a negotiation where partly you absorb it and partly the customer absorb it? That’s one part. And second part is since your clients are both generic and innovative companies, do your conversations differ when you’re talking to a generic company regarding this versus an innovative company?
Harita Vasireddi
The number of innovative companies that would be impacted by any high tariffs on India I think are negligible. So conversations different is out of question. Coming to who will absorb the increase in tariffs imposed by possibly us. Very difficult to, you know, answer that question. It’s hypothetical. It’s not happened. I think we’ll Take it when it happens. Okay.
Unidentified Participant
Ma’, am, what did you say about the innovator companies? Can you please repeat that?
Harita Vasireddi
No, I’m saying you that what is. You were I think asking what is the difference in conversations we are having with innovator work is generic. But how many innovative companies are there in India?
Unidentified Participant
Yeah. Okay. So the innovators companies that are your clients are these like global MNC pharma players, right?
Harita Vasireddi
They are not necessarily MNCs. They could be MNC but we also work with virtual companies or small companies. The size doesn’t matter for us.
Unidentified Participant
Okay, understood.
Harita Vasireddi
Thank you.
operator
Thank you. A reminder to all participants that you May Press Star N1 to ask a question. Ladies and gentlemen, if you wish to ask a question, you May Press Star N1. The next question is from the line of Ajay Surya from Niveshe. Please go ahead.
Ajay Surya
Thanks for the follow up. If I look at our domestic revenue compared to last year and last couple of years it has more or less remained flat or has been grown a bit. Now if you can highlight going forward, how do we see this trend? Because pharma industry on the domestic front has been doing significantly well. Whereas our revenue has showcased that.
Harita Vasireddi
I think that different way of looking at this. There is no degrowth in the domestic business. It has not grown at the pace at which the export business has grown. That’s because our business in India has reached a mature level. We are working with a lot of customers here. Whereas there is a lot more market to address when you go overseas. So I don’t think we should look at this with any negative connotation.
Ajay Surya
Okay, ma’, am. Got it. That’s it.
operator
Thank you. The next question is from the line of Punjan Shah from Molecule Ventures. Please go ahead.
Punjan Shah
Division. So just wanted to understand what are the differentiation provide versus other testing facilities or other testing providers. So what, what type of capabilities or we can say the advantages electronic company have to get tested via Winter versus the competitor.
Harita Vasireddi
I think the USP of Winter is the infrastructure, EMIMC infrastructure that we have. They are top of the line. We have procured them from the best manufacturers. So the quality and precision of results that we give are highly reliable. Helping our customers take accurate decisions on their product and also very confidently maybe trade with respect to their product. The other thing is like I was mentioning earlier, there was no other laboratory that was not attached to a government facility in Hyderabad. So we came in and by coming in what we could offer is a rapid service.
Normally with government organizations things are a little slow and There we were able to add a lot of value to our customers.
Punjan Shah
Right. Able to understand this. The other thing which is like the capability of the clinical trials, what we have and the niche capabilities which we have built already versus the electronic segment would be much more into, you can say more of the generic or the volume gain rather than there will be a qualitative aspects to be measured. Is that the right understanding to get it a breakup for the electronics versus the clinical trial segment?
Harita Vasireddi
Yeah, electronics is definitely a volume game.
Punjan Shah
So. But do we have. So just wanted to understand if. Let’s suppose for the next two years there is a surge in the electronics testing industry. So at what scale we can achieve, at what top line we can achieve from the current capacity of what we have done in the expanded capacity.
Harita Vasireddi
That kind of forward statement we have stayed away from. We don’t give individual, you know, service wise numbers. I won’t be able to share that. But I can tell you that there are good opportunities and so far we have grown well in the electronics and electrical testing. Given that we are only three years old, I think we already installed a second chamber which shows that we have utilized the capacities well from the first chamber. So these are all good indications.
Punjan Shah
And this wanted to understand one last aspect is that once an electronic. Let’s suppose equipment comes to the place. So let’s suppose example a company has developed a new product so it is being tested for each device or it is being tested for the initial time when it has been launched just to have that certificate on the place that these are the critical things which need to be measured. So how these dynamics work on the electronic segment.
Harita Vasireddi
There are both kinds of requirements. Some products, wherever there is a regulation, I think at the time of the release and I think there is some periodic testing interval also prescribed by the regulations. The other kind is for their RD when they are doing or developing their product. They are continuously testing these things to ensure that their product is of the desired quality and safety. And with respect to defense, depending again on the component. Sometimes they insist on every component being tested. Different varieties of testing requirements exist.
Punjan Shah
Okay, got it, got it. Thank you so much.
operator
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for their closing comments.
Harita Vasireddi
Thank you. Thank you all for joining the call today. I appreciate all the questions that have been posed. It was a pleasure talking to all of you. And until next time, goodbye.
operator
Thank you. On behalf of systematic institutional equities, we conclude this conference. Thank you for joining us. And you may now disconnect your lines.