I came across this podcast on Windlas Biotech
I hope you find it useful.
dr.vikas
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14-15% stake will be holding by Mr. Utpal seth, erstwhile mgr at RARE enterprises …not by RARE ENTERPRISES of Rakesh jhunjhunwala
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Please do mention the source of this information.
dr.vikas
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Good read with red flag : Windlas Biotech | IPO Analysis | SPTulsian.com
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For existing investors, what is the potential return expectation from the stock? The management has guided for ₹1,000 crore in revenue once the capex is fully operational, along with a 2-3% improvement in margins. In a best-case scenario, the company could achieve a PAT of ₹110 crore with 15% ebidta margins. Based on this, what price-to-earnings (P/E) multiple would be reasonable to attribute to the stock?
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You can take the Industry median of around 35x but PAT margin can’t get 15% that would be 10% max, 15% is EBITDA margin guidance
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can u share the pdf version of this as same is paid blog
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Injectibles-The company is preparing for audits by several large customers, which are scheduled for Q4 of FY25, with potential additional audits in Q1 of FY25. These audits will follow the company’s GMP certification process. Meanwhile, the company has an existing order book, with ongoing production and commercialization of products from stability batches. While it is difficult to predict when peak performance will be reached, there is positive momentum, strong responses from audits, and increased customer interest in the product portfolio. ATO 1.1 to 1.2.
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Schedule M with heightened stringency. -Surprise audits are being conducted across the industry, and the company has successfully cleared them. Several smaller companies in contract manufacturing hubs like Baddi and Uttarakhand have faced shutdowns due to non-compliance.
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intellectual property (IP) advantage - Unlike firms that merely provide manufacturing capacity and job work, companies with strong IP ownership can sell their formulations to multiple customers with variations in packaging and tablet design. This approach enables higher EBITDA margins compared to businesses that rely solely on contract manufacturing.
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Capex and ROCE-The capex for Plant-3 is expected to be fully utilized within FY25. Additionally, Plant-6 is being developed to help the company scale up to ₹1,000 crore in oral solid revenues. Anticipates continued capital investments to support expansion, which will impact the denominator in financial ratios. However, it expects to maintain a Return on Capital Employed (ROCE) of 27%–28% in the long run despite periodic fluctuations.
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Expected increase in adoption of trade generics with regulatory tailwinds through initiatives such as Schedule M etc could usher extended period of purple patch for Windlas (& some of their peers).
To me, this could be the strongest of all the tailwind for Windlas.
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IP advantage, will be able to cater to multiple pharma companies
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So basically all these three companies will be getting benefiting from PM Jan Aushadhi yogna , am I correct as these generic market is expanding very fast I am seeing long queue in these shops, please correct me if I am thinking in wrong direction.
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Windlas Biotech is a pharmaceutical company which is present in all segments of generics value chain (Generic formulations, Generic CDMO, Clinical trials, packaging, marketing)
- Owns 99% of IP (Trademarks, copyrights)
- In Q3FY25 Revenue grew by 20% Y-o-Y. Q-o-Q revenue is also increasing from past 8 quarters. They reported highest quarterly revenue in this quarter.
Last full year revenue: 631 crores
9-month revenue: 557 crores
3.They have three verticals:
a. Generic Formulations & CDMO vertical (77% of total revenue): In Q3FY25 it grew 8% Y-o-Y. They provide Generic Formulations CDMO Products and Services to 7 of the top 10 (15 of the top 20) Indian Formulations pharmaceutical companies.
b. Trade Generics & Institutional vertical (18% of total revenue): In Q3FY25 it grew 74% Y-o-Y. This is the segment they are most bullish on. Government policies, including Ayushman Bharat, continue to accelerate medical coverage to a vast number of economically backward and the company believes it is well-positioned to serve these opportunities.
c. Exports segment (5% of total revenue): In Q3FY25 it grew 19% Y-o-Y. - Gross margin expanded by 0.70% Y-o-Y to 38%. Recently they have entered into injectables which have higher gross margins than oral solids (tablets and capsules)
- EBITDA grew by 21% Y-o-Y and the margin was 12.6%.
- PAT grew just by 9% because of high depreciation of injectable facility. Since they follow WDV method of Depreciation major chunk of depreciation has already been taken care of
- They currently have 5 plants and 6th plant will commence in Q2FY26 (The aim with the Plant-2 expansion and the new Plant-6 is to have sufficient capacity to deliver a revenue of approximately INR 1000 crores for oral solids).
- Will Benefit from Schedule M (In simple language it is stricter quality checks as quality comes with cost many small players might shutdown which might benefit big companies including Windlas)
- Guidance:
ROCE: 25% for medium term, 27-28% for long term
Asset Turnover in injectable business could be 1.1–1.2 - CANSLIM framework analysis:
Current quarterly Y-o-Y earnings increasing
Annual earnings increasing
New product injectables which has higher gross margin
Leader in Domestic Generic Formulations CDMO in terms of revenue
Institutional Ownership increasing
Market health not confirmed uptrend but above 200 EMA - Catalyst:
a. Injectable business which can expand their gross margins
b. Growth in Trade generics & institutional business
c. Benefit of Schedule M
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Is anyone closely following the business? It seems there haven’t been many updates on this forum. Windlas Biotech’s injectable facility has already received Good Manufacturing Practice (GMP) certification from Uttarakhand’s Food Safety & Drugs Administration Authority, confirming compliance with WHO TRS Guidelines. While it has not yet contributed to revenue, it is expected to significantly boost it’s earnings (add ₹100 or so crore in revenue) and improve margins to 18%-20%. So looks like it is poised to be a key growth driver in the near future.
Does anyone know when it will become operational and start contributing to revenue?
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Hi Sumit,
As mentioned by the management in the previous concall, “large customers have scheduled audits of our injectable facility in Q4 of FY25,” which suggests that the facility is likely to begin contributing meaningfully to revenue from H1FY26 onwards. However, the company has already recorded some minimal revenue from the facility during H2FY25.
While this is expected to support margin expansion, it may not be to the extent you’ve indicated. Based on my understanding, the injectable segment can generate EBITDA margins of around 18–20% at steady state. However, given that a substantial portion of the business still comes from CDMO and generics, which typically yield ~13% margins, the overall EBITDA margin profile could see an improvement of about 150–200 bps over the next three years reaching towards 14.5-15% mark.
Thanks.
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Conservative mgt, as usual no guidance for fy26..adding plant VI, peak cap rev would be 1000cr excl Inj (90cr).. Declared dividend. They are waiting for Inj plants to stabilise to plan future capex .. open for M&A too.. PAT/OPM not grew as much due to higher employee cost and higher dep..Remg all similar to FY 24 with TG and Exp grew much higher than GFC. Indian IPM grew 8% (vol flat) but windlabs grew 20%. Tech chart (started learning) not encouraging.
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The management guidance can be summarised as follows as per concall Q4 FY 2025;
- Near term; Up to FY 2027
- Commercialise/Scale injectable facility which is estimated to contribute INR 90 crores in revenue
- Commercialise/Scale Plant 6 to reach peak potential of INR 1,000 crores in revenue
- When the above revenues are realised, margin expansion will follow
- Long term; Beyond FY 2027
- Aspiration to reach INR 2,000+ crores in its Trade Generics and compete with Alkem and Cipla
- Currently filing dossiers to build exports business that will contribute in later years
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