Sequent Scientific Ltd Q1 FY26 – From Poultry Pills to P/E Circus 🎪
1. At a Glance
Sequent Scientific, India’s “animal doctor with a passport,” reported Q1 FY26 with revenue ₹441 Cr (+13.1% YoY) and PAT ₹14.8 Cr (+127%). Margins improved to 12% OPM, showing signs of revival. But here’s the twist: at ₹183/share, the stock trades at a P/E of 151—yes, higher than Sun Pharma, Cipla, and even Tesla-on-steroids. With Europe giving 52% of formulations revenue and Latin America fueling growth, Sequent is trying to be the Ranbir Kapoor of animal healthcare: versatile, global, but occasionally typecast.
2. Introduction
If you thought pharma is only about humans, Sequent is here to remind you that animals also get prescriptions—poultry needs antibiotics, swine need vaccines, and your neighbour’s dog may be swallowing a pill manufactured in Vizag.
Sequent’s animal health business under Alivira is the pride of India:
Largest animal health company in the country.
Top 20 globally.
Present in 100+ countries with 21 subsidiaries.
But the drama is never-ending:
Shutting plants in Germany and Tarapur to cut flab.
Revamping Vizag to be the new production darbar.
Carlyle’s fingerprints all over the boardroom (new director appointments every quarter).
Recent merger with Viyash Lifesciences to double R&D and USFDA capacity.
The financials are recovering, but long-term charts look like a soap opera TRP graph—ups, downs, and one-off spikes.
3. Business Model – WTF Do They Even Do?
Sequent’s business has two main pillars:
APIs:
32 commercial APIs, approvals from USFDA, EU, and Japan.
Focus on anthelmintics (anti-parasite drugs). Basically, medicine for worms—because even cows and goats need deworming.
Marketing in 50+ countries.
Formulations:
1000+ finished dose products.
5 plants across India, Europe, Turkey, Brazil.
Vaccines like Syvazul (Belgium/Netherlands) and recent launches like Dogstem in Sweden.
Analytical Services (SRL):
Contract research arm with 70 scientists.
Plays lab partner for pharma biggies, crunching numbers and running fancy equipment.
This is not just “pills for pets” but full-blown B2B pharma for vets, poultry, and swine.
4. Financials Overview
Metric
Latest Qtr (Jun’25)
YoY Qtr (Jun’24)
Prev Qtr (Mar’25)
YoY %
QoQ %
Revenue
₹441 Cr
₹390 Cr
₹402 Cr
13.1%
9.7%
EBITDA
₹52 Cr
₹42 Cr
₹46 Cr
23.8%
13.0%
PAT
₹14.8 Cr
₹6.5 Cr
₹10 Cr
127%
48%
EPS (₹)
0.57
0.26
0.37
119%
54%
Commentary: A good quarter—revenues growing, PAT doubling, margins steady at 12%. But with EPS under Re 1, how do you justify a ₹183 stock price? Answer: Hope + Carlyle + pharma premium.
5. Valuation Discussion – Fair Value Range Only
P/E Method: Annualised EPS ~₹2.3. Even at industry PE (30–35), fair price = ₹70 – ₹80/share.
EV/EBITDA: EV ₹4,979 Cr / EBITDA (TTM ₹188 Cr) ≈ 26.5x. Sector average 15–18x → ₹100 – ₹130/share.
DCF: Assume 12% CAGR for 5 yrs, margin expansion to 14%, WACC 11% → ₹110 – ₹150/share.
🎯 Fair Value Range: ₹70 – ₹150/share (educational purpose only).
6. What’s Cooking – News, Triggers, Drama
Merger with Viyash Lifesciences: Approved in May 2025. Doubling R&D pipeline, boosting USFDA capacity. Big positive if executed.
New Product Launches: Dogstem (Sweden), Flortekxin (Spain). Portfolio expansion in EU = crucial for growth.
Leadership Drama: Resignations galore. CFO, Jt. MD, and recently Vedprakash Ragate (WTD) all stepped down. Carlyle’s Anuj Poddar
