WINDLAS - Windlas Biotech

📊 NSE: WINDLAS 🏢 Pharmaceuticals - Indian - Formulations 📅 Last Updated: 12/14/2025 15:17

💰 Financial Performance

Revenue Growth by Segment

In H1 FY26, the Generic Formulation CDMO vertical grew 18% YoY, Trade Generics & Institutional grew 25% YoY, and the Exports vertical grew 23% YoY. For Q2 FY26, these segments grew 18%, 24%, and 13% YoY respectively, contributing to a total revenue of INR 222 Cr.

Geographic Revenue Split

The company is expanding its footprint in semi-regulated geographies through its Exports vertical, which grew 23% in H1 FY26. Domestic operations comprise the majority of revenue through CDMO and Trade Generics (INR 172 Cr in FY25).

Profitability Margins

Gross margin expanded by 70 bps YoY in H1 FY26 and 68 bps YoY in Q2 FY26. Historical PAT margins were 8.0% in FY25, 9.2% in FY24, and 8.3% in FY23. The company achieved a 30% ROCE and 27% ROE for H1 FY26.

EBITDA Margin

EBITDA margin (excluding ESOPs) stood at 12.7% in FY25 (INR 97 Cr) and H1 FY26 EBITDA reached INR 55 Cr, representing a 25% YoY growth. The margin has improved from 10.3% in FY20 to a steady 12.7% in recent years.

Capital Expenditure

The company utilized INR 50 Cr from IPO proceeds to fund capex for the new injectables facility. Total net cash used in investing activities was INR 74 Cr in FY25 and INR 92 Cr in FY24.

Credit Rating & Borrowing

ICRA reaffirmed an [ICRA]A+ (Stable) rating for long-term fund-based facilities (INR 58.70 Cr) and [ICRA]A1 for short-term unallocated facilities. Interest coverage was healthy at 43.5 times in FY21, and the company remains net debt-free with INR 237 Cr liquidity.

⚙️ Operational Drivers

Raw Materials

Raw materials and packaging materials are the primary inputs, representing approximately 62.1% of revenue (COGS of INR 472 Cr on INR 760 Cr revenue in FY25). Specific chemical names are not disclosed.

Capacity Expansion

Current annual installed operating capacity is 706.4 crore units across four manufacturing facilities in Dehradun. Expansion is focused on the new injectables segment to support profitability and scale ramp-up.

Raw Material Costs

COGS was INR 472 Cr in FY25 (62.1% of revenue), up from INR 396 Cr in FY24. Procurement strategies involve long-term relationships to manage pricing and supply terms for raw materials and packaging.

Manufacturing Efficiency

The company achieved an asset turnover of 3.8x in FY25. Efficiency is driven by a focus on high-volume complex generics and chronic/sub-chronic dosage forms (59% of portfolio).

Logistics & Distribution

Trade Generics are sold directly to stockists and distributors without medical representative support to maintain a low-cost distribution model.

📈 Strategic Growth

Expected Growth Rate

18-20%

Growth Strategy

Growth will be achieved through the ramp-up of the new injectable facility, expanding the Trade Generics brand portfolio (which grew from 128 brands in FY20 to 400 in FY25), and increasing export penetration in semi-regulated markets. The company targets high-margin complex generics (67% of portfolio) and chronic therapies.

Products & Services

Pharmaceutical formulations (tablets, capsules, liquids), injectables, and trade generic medicines across chronic and sub-chronic therapeutic areas.

Brand Portfolio

The company owns 400 brands in its Trade Generics segment and has IP rights for formulation technology across 99% of products sold, including 4,340 brands in Complex Generics.

New Products/Services

Foraying into the injectables segment and expanding the Trade Generics portfolio, which has seen a 40% CAGR in revenue over the last three years.

Market Expansion

Targeting high-growth semi-regulated geographies in the Exports vertical, which grew 23% in H1 FY26.

Market Share & Ranking

Windlas is one of the leading formulations CDMO players in the organized domestic market, though it remains a moderate-sized player overall with FY25 revenue of INR 760 Cr.

Strategic Alliances

Maintains long-standing customer relationships with leading pharmaceutical companies for CDMO services; specific partner names for JVs are not disclosed.

🌍 External Factors

Industry Trends

Large pharma companies are shifting capex toward high-end products like biosimilars and regulated markets, creating an ecosystem where they outsource standard formulations to established CDMOs like Windlas.

Competitive Landscape

Competes with other domestic CDMOs and generic manufacturers; market dynamics are shifting toward specialized CDMOs as large players outsource non-core manufacturing.

Competitive Moat

Moat is built on 25 years of expertise, IP rights on 99% of products, and high entry barriers in complex generics (67% of portfolio). Sustainability is supported by long-term CDMO contracts and brand ownership in Trade Generics.

Macro Economic Sensitivity

Sensitive to the growth of the Indian Pharmaceutical Market (IPM), which grew 7.7% in Q2 FY26. Volume sensitivity is high as the industry saw a 0.2% volume decline in the same period.

Consumer Behavior

Increasing demand for affordable high-quality generic drugs is driving the 40% CAGR in the Trade Generics vertical.

Geopolitical Risks

Exposure to semi-regulated markets in the Exports vertical (23% growth) introduces risks related to trade barriers and local regulatory changes in those regions.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Companies Act 2013 (Section 143) and WHO-GMP standards for pharmaceutical manufacturing. Compliance with quality standards is central to the CDMO strategy.

Environmental Compliance

Operates three WHO-GMP compliant plants, ensuring adherence to international manufacturing standards.

Taxation Policy Impact

Effective tax rate is approximately 23.7% based on FY25 PBT of INR 80 Cr and Tax of INR 19 Cr. The company previously received an INR 8 Cr tax benefit from the WHC merger.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the successful ramp-up and capacity utilization of the new injectable facility, which carries higher depreciation costs (INR 28 Cr in FY25 vs INR 13 Cr in FY24).