Vimta Labs Ltd
NSE:VIMTALABS
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
392
780.65
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Vimta Labs Ltd
Earnings Call Analysis
Summary
Q1-2025
Vimta Labs reported stable revenue of INR 818 million for Q1 FY '25, with a slight dip from INR 835 million year-on-year. Despite capacity constraints, profits remained steady with a PAT margin of 14.9%. Key growth was driven by pharmaceutical services. The company is focused on significant expansion, adding 200,000 sq. ft. of lab space and committing to significant CapEx. The Hyderabadi facility will be commercial by Q2 FY '25. The management aims for an ambitious revenue growth of INR 500 crores by 2026.
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to Vimta Labs Limited Quarter 1 Investors Conference Call, hosted by Systematix Institutional Equities. [Operator Instructions] Please note, this conference is being recorded. I now hand the conference over to Mr. Vishal Manchanda from Systematix Institutional Equities. Thank you, and over to you, sir.
Thank you, Sheejal. Good afternoon, everyone. On behalf of Systematix Institutional Equities, I welcome you to the Q1 FY '25 earnings call of Vimta Labs. We thank the Vimta Labs 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. Narahari Naidu, 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, Vishal. Good afternoon, everyone. Thank you for joining Vimta's Q1 FY '25 Earnings Call today. As the new financial year has begun promising, let me take you through how the industry dynamics were briefly over the quarter, and then I will shed some light on our business. The quarter began with the global economy showing signs of stabilization, but at a relatively weaker pace, a sustained recovery will depend on factors such as the pace of inflation reduction, the evolution of geopolitical tensions and the effectiveness of policy responses.
Within the industries we operate in, that is the CRO industry and the TIC industry, there are growing opportunities for testing and contract research across many of the industries and more and more companies do rely on external organizations such as ours to outsource services that require special technologies and knowledge. Over the quarter, the business overall remained kind of stable.
And despite the capacity constraints that we have been experiencing for over a year now, the company grew 3% on a sequential quarter basis, resulting in a total income of INR 824 million. This is the result of hard work and dedication of the team at Vimta. The growth was mainly led by the Pharmaceutical Services.
During the quarter, we had a successful U.S. FDA remote audit with no observations. This was related to the clinical research studies. We recently received grants in aid of INR 40.9 million from the Ministry of Food Processing Industries for the upgradation of our food testing laboratories at our Life Sciences facility in Hyderabad. This will assist us to invest in latest technologies, thereby giving a push to the Food division and our overall business. As you all may know, in line with our plans of doubling our capacity, we will be inaugurating our new buildings at Life Sciences facility in Hyderabad very soon.
Our double capacities at Genome Valley, Hyderabad campus, will be instrumental for our growth over the next 5 years. The expansion project will add close to 200,000 square feet of additional space for labs and support functions. The company restrategized its services portfolio, providing greater impetus for driving growth in food, pharma and electronics testing, while optimizing our other industry services based on their returns.
The long-term partnerships initiated last year with globally leading pharmaceutical companies are progressing well. On food and electrical and electronics testing for the quarter, the business remains stable, but we are seeing improvement in the overall business dynamics. Here, I would like to mention that we have planned a CapEx of INR 70 crores to INR 100 crores for the financial year 2025, out of which a portion will be utilized in setting up one more EMI/EMC testing chamber in our new facility. The transfer of testing equipments to the new facility has started in June, and this will happen in a phased manner and the facility will be commercial in Q2 FY '25.
We have maintained our margins and will strive to continue the same going forward. We remain focused on the growing drivers -- growth drivers and are confident that they will continue to propel the company in maintaining its leadership in our industry. With this, I now invite our CFO, Mr. Narahari Naidu, to discuss the financial highlights for the quarter. Over to you, Narahari.
Thank you, Ms. Harita. Good afternoon, and a very warm welcome and thank you for joining us on our Q1 FY '25 earnings call. Our investor presentation and the financial results are available on the company's website and on the stock exchanges. Please note that anything shared on this call, which reflects our outlook for the future or which can be -- which could be constituted as a forward-looking statement must be reviewed in conjunction with the risks which the company faces.
Now I would like to walk you through the consolidated financial performance for the quarter ended 30th June 2024, after which we can open the floor for questions and answers. I'll start with the consolidated financial highlights for the quarter. Revenue from operations for Q1 FY '25 stood at INR 818 million as compared to INR 835 million in Q1 FY '24.
Our EBITDA stood at INR 252.1 million in Q1 FY '25 as compared to INR 252.4 million in Q1 FY '24. EBITDA margin for the quarter stood at 30.6%, which is up by 50 basis points on a Y-o-Y basis. Our margins could sustain despite a marginal dip in the revenue with better operating efficiencies during the quarter. Profit after tax in Q1 FY '25 stood at INR 123 million as compared to INR 122 million in Q1 FY '24, up 0.7% Y-o-Y. PAT margin for the quarter improved by 40 basis points to 14.9% on a Y-o-Y basis.
On the balance sheet side, cash and cash equivalents, including other bank deposit stood at INR 324 million with a total borrowing of INR 130 million. I would like to highlight that we have paid back INR 62 million, which resulted in debt to equity ratio of 0.04x. CapEx for the quarter stood at INR 164 million. Coming to update on CapEx, as mentioned by Ms. Harita, by Q2 of this financial year, the new Life Sciences plant facility will be commercial along with certifications and validations received. With that, we can now open the floor for Q&A. Thank you.
[Operator Instructions] The first question is from the line of Ankit Gupta from Bamboo Capital.
So my first question was on the revenue growth. If you look at the past 8 quarters, we have been stuck in the range of around INR 75 crores to INR 80 crores for -- from let's say June '22, almost in 8 quarters where we haven't grown our top line on a quarterly basis from that range. So is it primarily because of the capacity constraints on the pharma side? Or like -- or is there any other reason that the business itself is facing challenges on the pharma side?
I do understand that some of the other segments like diagnostics might have seen the growth or food and testing laboratory wouldn't have done that well, but what is happening on the pharma side also that we haven't seen some -- we haven't seen a growth in our top line for almost 2 years now?
Thank you for that question, Mr. Ankit Gupta. You're right, the revenue growth has been kind of flat during the last several quarters. You're also right about the reasons. The primary reason is our capacity constraints. We have been juggling with that for almost 18 months now. But for COVID, maybe we would have had this new facility that is currently under shifting. We would have probably had it with us maybe 1.5 years or 2 years ago.
So that is the prime reason. The other reason also, as you mentioned, is the, let's call it, restrategizing or refocusing that we have done during, especially, the last few quarters. We are primarily pushing only our pharma, food and electronics. There is a defocus on the other services of the organization.
Okay. So the new additional capacity coming in from quarter 2 of this financial year, do you think we'll be able to go to, let's say, INR 95 crores, INR 100 crores kind of quarterly run rate by end of this financial year, let's say, Q4?
Yes, I am definitely hoping those are the numbers that we can reach. We hope to have a step-up in Q2. Now during Q2, also, we will be shifting all our equipments. We are actually creating more space in our legacy building by sending some services out into the new building. So we will have to reconstruct some of the quadrants of our legacy buildings.
So it's not that magically a lot of space will be available, but there will be some additional space available for some of our services. But that, I think, should allow us to take a step-up in Q2. And definitely by Q4, we should see those bigger numbers.
So we remain confident of achieving INR 500 crores top line by, like '25 will be difficult, but at least in 2026 so that will be a substantial jump from, let's say, around INR 310 crores, INR 320 crores kind of revenue run rate that we are doing currently on an annual basis to almost INR 500 crores by FY '26?
Yes, it's a big jump. We are aware of the very large strides that we have to make quarter-on-quarter in the next 2 years. And we are working very hard towards that goal.
My next question was on the electric and electronic testing. In your opening comments, you made a comment about expanding capacities on that side. So earlier when we used to talk that you used to say that at current capacity within this around INR 25 crores, INR 30 crores kind of run rate from the existing facilities. So have we reached that number? And how do you see the growth for this segment over the next year or so?
The capacities in electronics testing, that especially EMI/EMC testing is in a couple of dimensions. One is the chamber capacity where we actually do the EMI/EMC testing. So we are just going to add another chamber. But the investment that we have done in terms of the testing tools, testing equipment, that will suffice for the INR 25 crore, INR 30 crores that we originally talked about. So it's a chamber we are adding. It's like a room, another room, a very expensive room, but we need one more room because the current EMI/EMC chamber is occupied at 80% or sometimes even more everyday.
Okay. So but we haven't reached that scale INR 25 crores, INR 30 crores as of now?
No.
Okay. Okay. With this capacity addition, will there be any improvement that we can see in our target numbers for the electrical and electronic testing or it will remain around INR 30 crores only?
This chamber, we are -- the plans are moving forward by the time we order it and it's installed. I think it will be Q4, late Q4 even. So the additional capacity will be available to us very likely in the next year itself. Meanwhile, we are trying to enhance the scope of services by adding a few other equipment, so we can address more products in the market.
The next question is from the line of Dhwanil Desai from Turtle Capital.
Ma'am my first question is on the food segment. If you can give some color, I think you mentioned that it was stable. So I assume that it was flattish kind of a number. So between non-JNPT and JNPT, how is the growth panning out? And also, you mentioned that you see some uptick in the overall environment for that segment for growth, if I understood correctly. So some color on that would be helpful.
Compared to last year, the Food segment, I think, is faring much better. Last year, we were impacted by the export/import scenario of the country. So compared to that, there are no headwinds to food industry as of now. In fact, there is a lot of trust from the government. Government is planning to increase its surveillance and therefore, even private testing labs will get some share of that additional work that government will do in terms of taking care of food safety and quality.
So in that aspect, we are, I think, in a very stable mode with respect to food industry. And for us, usually Q4 and the last quarter is the highest quarter of the year. And then it sort of comes down and then starts picking up, depending on how well we are able to drive our sales strategies. So in that aspect, compared to Q4, Q1 the sample volumes will be slightly lower, and this is very typical. This is a very typical trend. And that's the reason I made that statement that is quite stable.
Okay. And how is the ramp-up at JNPT happening? Is it kind of coming in line with our earlier expectation? There was some hiccup there so have you overcome that? Some color on how do we see JNPT [indiscernible] this year.
We did see an exceptional month during last quarter, but that's all it was, an exceptional month, where the sample flow was high. So we continue to pursue our dialogue with the government partners to see if they can help us with more volume. So that is going on. Nothing significant has transpired so far.
Okay, got it. Second question ma'am, you mentioned that you are defocusing except for the 3 segments. So I think diagnostic and environmental are the 2 areas where probably the defocus would be happening. So does it mean that those revenues will kind of go off the books in terms of you slowly scale it down and then that revenue -- there will be growth in revenue from those segments? Is that how you're looking at it? Or you are thinking in terms of more capital allocation and the sources your focus will change?
No, both environmental testing services and diagnostics are not capital intensive. Yes, they are manpower intensive. And when we say we are defocusing, I think you may be aware that we have rolled back a couple of regional labs that we set up. Now we roll back our plan to be B2C service provider. So our original strategy of being a B2B player in diagnostic that continues, and that is being grown organically now.
And coming to environmental testing, we have been very critically reviewing the subsegments in that -- sub-services in that. And there are some services that were not really adding value to our bottom line. So those we have deliberately cut off. So some revenue dip has occurred, and now we are trying to pull up the other revenues from other services in the same environmental testing.
So we are optimizing there. Our focus is very intensely on the margins because last 18 months or so we couldn't do much around capacity. So we have done a lot of work around rationalizing the services, which ones we will push, which one we will not. So that kind of analysis in-depth work has gone into our service portfolio.
And therefore, you see those stable margins in spite of a flat top line because typically, when the top line is flat, your margins shrink, but we have made sure that the margins didn't get affected only because we were operationally very focused on improving our productivities as well as the efficiencies.
Very helpful. And last question before I come back in the queue. Is that -- you mentioned about this INR 70 crores to INR 100 crores CapEx, so does it include the CapEx which is remaining for the Pharma segment? And if you can give some idea about how this CapEx will be divided between food, electronics and pharma?
So the current CapEx budget, which is about INR 70 crores to INR 100 crores is for the operating CapEx, which doesn't include the [indiscernible] we already had incurred about INR 50 crores in the last year. And we may incur about INR 10 crores, INR 15 crores or close to INR 20 crores during the current year. So that's budgeted separately. The INR 70 crores to INR 100 is the equipment with the instruments to get the revenues as well as replacement of our operative equipments.
So how much of that would be allocated to the pharma, food and...
So majority goes into pharma and food, probably 20% or 10% to 15% goes into food, but for that majority goes into pharma.
[Operator Instructions] The next question is from the line of Nitya Shah from KamayaKya Wealth Management.
I wanted to ask now that the CapEx will be operational, what is the level of utilization you are seeing for FY '25?
See what we have done is invested money on infrastructure. Now infrastructure is not something that you keep on building. You do this once in a few years. So the utilization rate will depend on the rate at which the company is able to add more business.
So around about say -- you have spent close to, around about, say, INR 80 crores to INR 100 crores of this CapEx. So you also guided for crossing INR 500 crores in sales by FY '26. So I just want to understand how would the ramp-up be? Are you seeing that considering the amount of sales available? Will you be able to touch, say, 40%, 50% utilization in the first year?
40%, 50% utilization in the first year may not happen. My guess would be around 20% to 30%.
Fair enough. And secondly, I wanted to ask was regarding the JNPT lab. What is the peak potential of revenue from the JNPT lab?
I won't be able to comment on the revenues there. We are bound by confidentiality agreements with our government partners.
Okay. And thirdly, I wanted to ask is that [indiscernible] you had mentioned about preclinical trials, if I'm not wrong on that, now you would be able to start catering towards that. So preclinical trials and electronics testing, how do you see the ramp-up going forward?
Electronics testing, I think, India is in a very good vibration. We are seeing a lot of push on Make in India, the variety of products that are coming for testing. And the industries are growing. The labs that are providing these services also quite proliferated in South and North India during the last 1 to 2 years. So I feel the industry is very vibrant and it's going to be one of the major industries for India.
And therefore, us being in that space will definitely be beneficial to our business. Coming to clinical trials, I think I mentioned this in my previous call also, we are conducting our maiden trial, and this is going well.
Okay. Fair enough. And electronics, currently, say, in this current quarter of INR 82 crores revenue, what was the percentage allocation towards electronics?
We don't disclose that kind of bifurcation. Now what I've always shared, I can share again. Food and pharma put together is about 85%. The rest is in the remaining 50% -- 15%.
Understood. And going forward, I also wanted to ask you was, just one second, excuse me. Actually, I'll get back in the queue, ma'am. I just wanted to check one data point. I'll check and get back.
Sure. Sure.
[Operator Instructions] The next question is from the line of Chirag Jain from Yogya Capital.
Most of the questions have been answered. Just a quick clarification on the Hyderabad facility that we have -- are now operational almost. So do we have the U.S. FDA inspection completed for that or it is pending?
It's in the same life sciences premises. So it has the same establishment number or identity. We will not need any additional inspections from any regulatory authorities. All the existing licenses, approvals, accretions will continue.
[Operator Instructions] The next question is from the line of Viraj Mehta from Enigma Investments.
Madam, if I look at last 4 years of our CapEx, we have spent more than INR 200 crores of CapEx, including obviously the new food laboratory that we started with government, but we are again talking about INR 75 crores to INR 100 crores of CapEx. If I look at the overall CapEx, it will close between INR 275 crores to INR 300 crores, whereas we have not got anything close to a decent number in terms of revenue to compensate us for that kind of CapEx. What kind of KRAs you and the team think about when you keep doing such CapEx without any revenue increase that even we have guided in the past and we have not achieved?
First thing is our CapEx spending is of two kinds. One is on infrastructure that we don't do regularly. The last investment we have done for our Life Sciences was in 2004 -- 2004 to 2006 when we build the Life Sciences campus. That costed us at that time also about INR 100 crores. And now is the second time we are actually adding capacity in the same campus after almost 20 years. .
So you cannot club this investment with our regular CapEx investment. And this industry, you may be aware, is quite technology-intensive. And companies come to us because -- one of the main reasons is because of the technologies that we have and the rate at which technologies get obsoleted also depends on the regulations.
So regulations also have been fast moving in, especially on the pharma industry. And sometimes they were on the food side. So every time, typically, what we invest is the depreciation value. And that's why you see those numbers repeating year after year. But in between, unless we add more infrastructure, the business will not grow. So that's the reason you will see those numbers. And every time we have put in a big amount of CapEx. I think we have shown an inflection of sales.
So ma'am, is it then safe to assume that if you do this INR 75 crores, 100 crores of CapEx that you are saying, inflection of sales -- like anyways, you're talking about INR 500 crores by '26 now that you're saying that it looks difficult. But post that CapEx, what's the number we are looking at? Because there has to be some kind of game plan that you and the management are working with, right?
INR 500 crores is definitely possible through the investment infrastructure that we have now built. So I'm thinking we can do even more than INR 500 crores, but this is a business where you will have to keep on expanding. One is expanding in terms of infrastructure within a location, but also you will have to go and add more locations. Otherwise, geographic penetration also will not come that easily. And this is all to be considered as a build phase.
The next question is from the line of V.P. Rajesh from Banyan Capital Advisors.
So my question was that I wasn't very clear as to when this new facility will start commercial production? Is it sometime Q2 next year? Or is it Q2 of this year? That was the first question.
Q2 this year, no, this quarter that we are in.
Okay. So when you're talking about, let's say, 20%, 30% in the first year utilization, that is for primarily this financial year and then from next financial year, we can expect a full ramp up. Is that a fair assumption?
There will be a ramp-up. I wouldn't call it a full ramp-up.
Okay. So next year, let's say, will it be 60%, 70%, 80% kind of ranges? Or will it be still lower?
Very difficult for me to say at this point of time, depends on which services are scaled up, so very difficult at this point of time.
Okay. And because you are doing the shifting of the equipment, is there any revenue loss at the current facility because those things are obviously in transit, and they are out of circulation. So just curious, have you lost any revenue because of this shifting of equipment in Q1?
We are trying to do it efficiently. Obviously, there will be some impact, but teams are working very hard to bring down the impact.
Okay. And just last question on this INR 275 crores of CapEx. How much has gone into this facility which you are talking about, you do once in 20 years? And how much is the CapEx for growth? Of course, the facility expansion is also for growth, but I'm just curious, this is sort of once in 20 years and everything else is, let's say, for a lesser time frame?
So -- Mr. Rajesh, so if you have to break down the entire INR 275 crores, so INR 120 crores has already been incurred in the past 3, 4 years and INR 70 crores will go into the infrastructure addition, which we talked about the capacity enhancement. And the other INR 70 crores to INR 100 crores of budget, which we have given for the current year. So this INR 70 crores is to cater to our operations, which, again, has to be divided into two buckets. One is for the U.S. Services, which we are planning to cater to. Second is, obviously, we will have to replace our instruments because the nature of the instrument is as such that every 7 to 8 years this may become obsolete.
Right. So let me ask my question differently. So if INR 70 crores has gone in infrastructure -- so let's say -- you are, let's say, INR 200 crores, right? And out of that INR 200 crores, what is sort of the maintenance CapEx versus the growth CapEx?
So currently, I don't have that number, but we can definitely connect offline to discuss that.
Sure. Okay. All right.
[Operator Instructions] The next follow-up question is from the line of Nitya Shah from KamayaKya Wealth Management.
Yes, I wanted to ask was regarding that 30% of the company is owned by players in the industry. So in the past, you have mentioned that they are silent and I want to understand is there any other kind of angle in any way, like what is their intention of owning such a big part of the company, if you put some color on that?
I don't have any specific information that would be useful. They have been with us for a long time. I think it's a good investment, therefore they are there.
Okay. Fair enough. So there is no angle of any collaboration or synergy of that sort?
No. We are actually competitors.
[Operator Instructions] The next question is from the line of Faisal Hawa from H.G and Hawa Company.
Ma'am, what is our R&D spend on a yearly basis? And do we spend to -- do we increase the spend by any significant measures?
Company does not have any R&D of its own. We do contract research for our customers.
But we don't want to go into any kind of things which we will make our customers task easier or process-oriented patents or anything?
Those things are done, like for example, if there are some test methods, which have a certain run time on the equipment, we are always trying to make the methods more efficient. So we invest in developing new methods, more efficient methods. So that kind of R&D we do, but it's not the R&D that people understand. We are not into any development or discovery of products. So we don't do that kind of R&D.
And ma'am have we done any kind of hiring at the top executive levels to facilitate this expansion that we are doing and particularly on the marketing front? And second is that what is the concentration of our top 5 customers to our total revenue?
Top 5, I don't have the number. Top 10 would be around 35%, 40%.
Okay. That's good enough. Okay. And any hiring that we have done, which are very significant hiring which are people -- who are industry-relevant people?
They have been typically replacements, no additional hiring.
The next question is from the line of [ Raaj from Arjav Partners ].
I wanted to know how much of a peak sales we can do post this expansion?
How much of peak sales we can do post-expansion into the new facilities?
Into the new and old combined and for the new also.
Like I said, 20%, 25% is the expectation that we have in terms of capacity utilization. That's a good question. The whole facility could probably deliver around INR 600 crores to INR 700 crores.
Okay. So this includes new as well as older equipments, both combined?
Yes, new, older -- yes.
All right. And in last 2, 3 years, you incurred CapEx of INR 275 crores, out of that, INR 120 crores has already been incurred, right? INR 70 crores is for the additional infrastructure?
It's not only for infrastructure, it is for adding equipment also.
And for adding equipment and now another INR 85 crores, it is for what?
So I'll clarify that, Raaj, so we haven't incurred INR 270 crores until now. So the earlier question was we had already incurred about INR 120 crores towards equipments and INR 70 crores is what we may incur towards the infrastructure addition. INR 70 crores to INR 100 crores is what we have given the budget for the current year. So that's where the other gentlemen has summed up the 3 things and say, as mentioned, INR 275 crores as a total investment.
Okay. And I wanted to -- can you provide a segment-wise EBITDA like if you go to electronic testing, if you go for food and...
Sorry, we don't have that information, Raaj. We don't disclose such kind of information.
All right, yes. and going ahead, where do we exactly see growth coming from? Is it from food? Is it from electronics? Is it from pharma?
All three.
The next question is from the line of Nagraj Chandrasekar from HT Family Office.
I just want to understand the size of the outsourced analytical services market in India and who are large peers here would be?
I won't be off hand able to recall that information, but there is the latest annual report that is on our website. We have some interesting numbers there. All I remember is that the Indian industry is growing at a faster pace than the global industry and the Indian industry is growing at the early double digits. So it's a very good growth rate, I think, especially all the fields that we are operating in, both domestically and globally.
Okay. And the global pharma companies that you have started working with or in talks with for past year or so, I see that roughly 1/3 of our revenues already coming from overseas clients. What is the scope of work exactly with these customers? And how does it differ from the scope of work we do for Indian drug companies and -- exactly and are there any new scope of work that you're doing with these global pharma companies with the new facility that you are setting up?
The scope of the work for domestic companies and global companies, more or less, is the same scope. The only difference we -- in the work we get from overseas is overseas companies do a lot of discovery research. There's not much of discovery research which happens in India. India is more of a generic market. So from outside markets, we are able to serve both the generic companies for the requirements and also the discovery lines. So that is the major difference in these two markets.
And what stage exactly of the clinical trial process would you be serving this function and exactly at what stage will you be involved for new molecule research?
In a new molecule research, we associate with companies much, much ahead before it even reaches the clinical stage. We are there with them right from the concept phase to the preclinical studies. We do a lot of animal studies for them, the analytical development validations. And on the clinical phase, we are with them on the trials, Phase I, Phase II, Phase III trials. We're able to support them in that phase.
Okay. And are you directly getting involved in the clinical trial stages? Are you entering that field as well? And how exactly that work for you?
We also work with companies directly at the clinical stage and that's a very strong vertical we have at Vimta's. Till I think a couple of years back, we were majorly supporting the generic industry. But from the last 2 years, we have now started also supporting the trials -- clinical trials in patient population.
The next question is from the line of Ankeet Pandya from InCred Asset Management.
I just had two questions. So firstly, like we are investing in new chamber for the electronic business. So just wanted to understand like when -- if there's a way to guide by when will be the next investment required to add an additional chamber for electronic because that is important for the growth? So if there's a way like by when can we reach peak revenue or what kind of an asset turn can we expect from this?
So sir, as Harita mentioned, we have already doubled our capacity in the last 2 years when we began. We have added a chamber. We are going -- already ordered a chamber. That chamber is going to get commissioned around October. So having that chamber itself doubles our capacity. Our next expansion -- if you are asking about the next -- the third chamber, so maybe that will be towards end of next financial year...
Okay. So basically, roughly we can -- one can assume that 1, 1.5 years takes to achieve full peak capacity utilization and post that use will build a new chamber if that is the right way to look into it?
I mean there is no such formula by which you can say. If the demand picks up, the industrial growth picks up -- if you look at this first quarter, has been a little slow due to the election time and all the manufacturing industry was slow. The manufacturing picks up the pace again. So the addition of this new columns could be much, much earlier.
Just to add to that, the next chamber, I don't think we will add in Hyderabad. We would want to look at a different city.
Any like a particular city that we have been looking at or something we have been evaluating?
We have multiple options, too early to decide on that. As of now, the good options are Pune, Bangalore.
Okay. Fair enough. And just a last question. So sequentially, if you see, we have seen a [ 60% ] top line growth. But on the gross margin front, it has slightly come down by around 60, 70 bps to 77.1%. So like given that we have one more facility coming up in the second quarter. So how should we look at on the gross margin front going forward or on a sustainable basis?
We will be pushing the top line. And my expectation is to maintain the margins. Now I was making a comment earlier, in a flat kind of situation, it's very uncommon that the margins are retained. They are typically pushed down because we are very human resource-intensive industry. And the cost of human resource keeps on only going north year after year. And also, we have a lot -- we consume a lot of material. We have multiple facilities.
So every cost -- input cost only keeps growing year after year. Now despite that, our margins have been doing pretty well, which means that we have been taking care and focusing on profit-making services -- pushing more profit-making services with the capacities that we had.
Okay. So the point is like we have -- in the second quarter, we have the life science facility coming up. So again, the input costs will be there. But like you said, initially, the capacity utilization will be at around 25%, 30%. So will there be some constraint -- like these minor constraints on the gross margin front or even the 77% that one can see that on sustainable level, we will be able to maintain it?
So on the gross margins front, we don't see any significant impact because the majority of the investment is into building. So this has a higher life for depreciation. So especially at gross margin level, we don't see that it's going to have any impact. We can expect our existing margins to continue going forward as well.
The next question is from the line of [ Chandrapal Singh ], who is an individual investor.
Ma'am, any increment from the -- incremental samples from the JNPT side?
No, they are kind of stable. There was a high volume experienced in the month of May. But otherwise, it has been back to earlier revenues.
Okay. Not any growth that side?
No.
Okay. Last year, I was able to vote for the AGM because you put that on the NSDL side. This year, I missed it. So I request you to always put the voting procedure through the NSDL.
I'll convey it, yes.
Okay. Ma'am, regarding the electronic testing side, earlier, you projected that -- projected the revenues of INR 30 crores to INR 35 crores with the chamber that you're already using. So has the revenue [indiscernible]?
No, no. The plan was always to add a second chamber, and we are in the process of adding a second chamber.
Okay. The revenue projection will remain the same?
Yes. For this capacity, the revenue projection will remain the same, unless, of course, something in the market significantly changes with respect to competition, prices and stuff like that.
Okay. Ma'am, our new facility is capable of handling NCEs?
Yes.
[Operator Instructions] the next question is from the line of Anupam Agarwal from Lucky Investments.
I just have -- if you can breakup your revenue into public and government business, that will be helpful.
I don't have that kind of a breakup.
Okay. Any ballpark figure as to what percentage comes from either of them?
No, we don't look at it in that angle at all. At least I have never looked at it in that angle at all. But we do work with a lot of government agencies for our food testing and also environmental testing.
Okay. So when we say that 40% of business comes from top 10 clients, any government clients from them?
Yes. One of them is, yes.
[Operator Instructions] The next question is from the line of Vishal Manchanda from Systematix Institutional Equities.
I have a question on the clinical trial that you are doing. I wanted to understand whether this is a single-site clinical trial or this going to be conducted at multiple sites and at third-party sites?
Vishal, these would be multisite trials at the third party, mainly the hospital setups spread across the country.
And we've already started enrolling [ sites ] for the trial or that yet to start?
We are on that stage where we have identified the sites, and we are also at the advanced stage of discussions with the enrollments.
And how many patients would you be enrolling?
I don't have that number, but usually these trials -- the sizes range anywhere from 200 to 300 odd, depends on the product. This particular trial, I'm not sure. I can let you know.
Okay. And this will be an 18-month long trial?
Yes. That's a typical life cycle of a trial.
And sir, would you have enrolled so that you would need internal resources to conduct the clinical trial? Is the recruitment done at your end?
Yes, our site, we have the team to manage clinical trials. It's a separate team. And then externally, we also have CRAs on board who will be doing the site monitoring and all. So that team is there.
Okay. And when do you expect that kind of the patient to start -- basically the trials to start dosing to patients?
It should start this quarter.
And revenue should accrue post that? Is that the right way to think about it?
So Vishal, revenue is recognized based on the milestones of performance, based on performance completion method. So irrespective of the contract invoicing, so we recognize based on the activity completion. So probably some of it would have been recognized in Q1, some of it may get recognized in Q2 and so on and so forth.
And just 1 more, this trial will be -- would more or less be at the same margins as the company margins? Or do you expect this to be accretive or dilutive to the company margin?
That is very difficult to understand at that level because a lot of resources are common, so we will not be able to understand the margin for any project because we don't see project-wise margins. But it would be more or less in line with our existing margins.
Okay. So going forward, you don't expect your company margins to be diluted at least or meaningfully diluted from where it is today?
We are not expecting any dilution, rather we are putting efforts to improve the margins. Of course, the efforts are already seen factored in the current result as well. So we have initially mentioned that 20% to 30% is something which we are looking at. And we will try to improve on that number as well.
[Operator Instructions] As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
I want to thank all the participants in this call and also Systematix and Vishal and the conductor of the call. Thank you all, and I wish you a good remaining day. Bye-bye.
Thank you. On the behalf of Systematix Institutional Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.