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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 39.29 | ACUITE BBB- | Stable | Reaffirmed | - |
| Bank Loan Ratings | 15.40 | Not Applicable | Withdrawn | - |
| Bank Loan Ratings | 2.00 | - | ACUITE A3 | Reaffirmed |
| Total Outstanding | 41.29 | - | - |
| Total Withdrawn | 15.40 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the long-term rating of ‘ACUITE BBB-’ (read as ACUITE triple B Minus) and the short-term rating of ‘ACUITE A3’ (read as ACUITE A three) on the Rs. 41.29 Cr, bank facilities of Vivo Bio Tech Limited (VBTL). The outlook is revised from ‘Negative’ to 'Stable'.
Further, Acuité has withdrawn the rating on Rs.15.40 Cr. bank facilities of Vivo Bio Tech Limited (VBTL) without assigning any rating as it is a proposed long-term bank facility. The rating is being withdrawn on account of request received from the issuer. The withdrawal is in accordance with Acuité's policy on withdrawal of ratings as applicable to the respective facility/instrument. Rationale for rating The outlook revision takes into account increased focus on preclinical trials and testing as a scalable segment supported by setting up of a new large animal testing facility citing an expected improvement in the business operations and improvement in financial risk profile on account of issue of share warrants. Furthermore, the rating reaffirmation considers the company’s presence in niche industry from over three decades along with experienced promoters, reputed clientele across the pharmaceutical sector. However, the rating is constrained on account of intensive working capital operations owing to the nature of the business. Going ahead, the ability of the company to scale up the operations while maintaining the profitability levels will continue to remain a key rating monitorable. |
| About the Company |
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Incorporated in 1987, Vivo Bio Tech Limited (VBTL) is a full service preclinical contract research organisation (CRO) and specific pathogen free (SPF) laboratory animal breeder offering drug development & discovery services to pharmaceutical & biotech companies world-wide in accordance with OECD – GLP having applicability in OECD member countries and is accredited by AAALAC International. VBTL offers services in the areas of in-vitro, in-vivo, toxicity studies, pharmacological investigations, etc. The company is currently managed by Mr. M. Kalyan Ram, Mr. Alangudi Sankaranarayanan and Mr. Sri Kalyan Komplella.
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| Unsupported Rating |
| Not Applicable. |
| Analytical Approach |
| Acuité has considered standalone business and financial risk profile of VBTL to arrive at the rating. |
| Key Rating Drivers |
| Strengths |
| Established track record of operations and reputed clientele
Established in 1987; VBTL has over three decades of experience in the industry supported by qualified and experienced senior management. Over the years, it has established stable relationships with reputed clientele of around 450 entities serving the pharmaceutical & biotechnology firms, vaccine developers, contract research organizations, etc. Acuité believes that the company will continue to derive benefit from its promoter’s experience, established presence and scale the business operations in near to medium term. Moderate financial risk profile The tangible net-worth of VBTL stood at Rs.54.33 Cr. as on 31st March, 2025 against Rs.46.28 Cr. as on 31st March 2024. The improvement is on account of proceeds from issue of warrants to the extent of ~Rs.14 Cr. in FY25 towards setting up of a new large animal testing facility across 52 acres and profit accretions. The tangible net-worth is adjusted for capitalization of salaries and other cost paid to resources working on new products under intangible assets. The total debt of VBTL reduced to Rs.51.80 Cr. in FY25 (Rs.70.84 Cr. in FY24) leading to below unity gearing at 0.95 times as on 31st March, 2025 (1.53 times as on 31st March, 2024). The debt protection metrics also improved and stood moderate marked by interest coverage ratio of 3.40 times and debt service coverage ratio of 1.49 times as on 31st March, 2025. Going ahead, with further receipt from pending issue of warrants (~Rs.22 Cr.) and no major debt funded capex; the net-worth is expected to improve during FY26. |
| Weaknesses |
| Modest scale of operations
The total operating income of marginally improved from Rs.44.88 Cr. in FY24 but remained modest at Rs.46.67 Cr. in FY25. This improvement is mainly on account of better revenue generation from the preclinical testing segment driven by various orders of agrochemical testing, medical devices, etc., Going forward, the company aims to focus more on this segment rather than animal sale & feed which is expected to improve the revenues. The operating margin though reduced but continue to remain healthy at 44.66% in FY25 (47.36% in FY24). Furthermore, the PAT margin improved and stood at 16.22% in FY25 against 5.61% in FY24 on account of sale of an idle property. Intensive working capital operations The working capital operations of the company is intensive in nature marked by gross current assets (GCA) of 339 days in FY25 (392 days in FY24). The GCA remains high due to inventory holding which primarily includes animals held for breeding. The inventory days stood at 110 days in FY25 (136 days in FY24). The debtor’s collection also remain high however, improved to 88 days in FY25 compared to 92 days in FY24. Further, the creditor days stood at 62 days in FY25 (101 days in FY24). VBTL's reliance on working capital limits is high as reflected by the bank limit utilisation for fund-based limits which stood at an average of 96.58% for the last 6 months ended September, 2025. |
| Rating Sensitivities |
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| Liquidity Position |
| Adequate |
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The company has adequate liquidity marked by sufficient net cash accruals to its maturing debt obligations. The net cash accruals of the company stood at Rs.16.59 Cr. in FY25 against maturing debt obligation of Rs.8.60 Cr. during the same period. Going forward, the net cash accruals are expected to be in the range of Rs.15-18 Cr. through FY2026-27 against repayment obligations in the range of Rs.7-8 Cr. VBTL's reliance on working capital limits is high as reflected by the bank limit utilisation for fund-based limits which stood at an average of 96.58% for the last 6 months ended September, 2025. Further, the cash and bank balance stood at Rs.1.21 Cr. and the current ratio stood moderate at 1.46 times as on 31st March, 2025.
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| Outlook: Stable |
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| Other Factors affecting Rating |
| None. |
| Particulars | Unit | FY 25 (Actual) | FY 24 (Actual) |
| Operating Income | Rs. Cr. | 46.67 | 44.88 |
| PAT | Rs. Cr. | 7.57 | 2.52 |
| PAT Margin | (%) | 16.22 | 5.61 |
| Total Debt/Tangible Net Worth | Times | 0.95 | 1.53 |
| PBDIT/Interest | Times | 3.40 | 2.68 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable. |
| Any other information |
| None. |
| Applicable Criteria |
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• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm |
| Note on complexity levels of the rated instrument |
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