Windlas Biotech Limited
Q1 FY26
Call date · August 13, 2025
1 · Management Commentary
Key Positives
- Achieved 10th consecutive quarter of record revenue; Q1 FY26 revenue at INR 210 crores (+19.9% Y-o-Y).
- EBITDA grew 27% Y-o-Y to INR 27 crores; PAT up 31% Y-o-Y to INR 18 crores.
- Gross margin expanded 71 bps Y-o-Y to 38.3%; EBITDA margin improved 70 bps to 12.6%.
- All three business verticals (CDMO, Trade Generics & Institutional, Exports) delivered strong growth.
- Continued customer additions, product portfolio expansion, and deeper market penetration.
- Dividend of INR 12.2 crores (INR 5.8/share) paid for FY25.
Key Negatives
- Export vertical, while growing rapidly (45.4% Y-o-Y), remains small in absolute terms (INR 6 crores).
- No specific guidance on injectable facility ramp-up or utilization; management refrained from sharing granular dosage form-wise data.
- CapEx and Plant 6 commercialization timelines extend into FY27 for full impact.
Forward Guidance
- Capex of INR 40–50 crores planned for Plant 6, with phased commercialization expected; full facility likely operational in FY27, though partial benefits may accrue earlier.
- No immediate plans for Phase II injectable expansion; will trigger based on utilization and order flow.
- Focus on expanding dosage form capabilities and exploring new geographies.
- Continued disciplined execution, operational efficiency, and process enhancements.
- Open to inorganic opportunities (M&A); if none materialize post-Plant 6 and injectable ramp-up, may pursue further organic CapEx for new dosage forms.
- No formal revenue or margin guidance; management emphasizes long-term, sustainable growth across all verticals.
2 · Q&A Highlights
Q 1 (Injectables Ramp-up & Utilization): What is the progress and outlook for the injectable facility, including utilization and margin impact?
A (Management):
• Progressing on action plans for injectables; utilization improving but no specific numbers disclosed.
• Margin expansion expected as operational efficiency and scale improve; timeline not specified.
• Will consider Phase II expansion only as peak utilization approaches.
Q 2 (Exports Growth & Strategy): How sustainable is export growth and what are the strategic initiatives?
A (Management):
• Export growth strong but from a small base; focus on unlocking new markets (Asia, CIS, Africa) and adding product registrations.
• Regulatory approvals pending in some markets; optimistic on long-term expansion.
Q 3 (Trade Generics Business): What is the outlook for Trade Generics, portfolio expansion, and distribution reach?
A (Management):
• Active portfolio of ~200+ products; significant room to grow (peers have 600–800+).
• Distribution network at ~1,000+ stockists, mainly in North India; long-term target of 5,000–6,000 stockists.
• Growth is seasonal and lumpy; focus on annual performance and healthy expansion.
Q 4 (Plant 6 Capex & Revenue Potential): What is the timeline and revenue potential for Plant 6?
A (Management):
• INR 40–50 crores CapEx on track; 2–3 more quarters for refurbishment, then validation.
• Full commercialization in FY27; partial benefits may accrue earlier.
• At peak, Plant 6 plus existing plants (excluding injectables) can deliver INR 1,000 crores revenue; including injectables, INR 1,100 crores.
Q 5 (API Price Impact & Margins): How do API price fluctuations affect margins and growth?
A (Management):
• API price changes (mainly in antibiotics, which Windlas does not manufacture) have limited impact; business is mostly volume-driven.
• Long-term, cost-plus model and product mix mitigate volatility.
Q 6 (Cash Utilization & M&A): Plans for deploying surplus cash and approach to dividends/M&A?
A (Management):
• Dividend payout maintained at ~20% of profit.
• Open to M&A but will not rush; if no inorganic opportunity arises post-Plant 6 and injectable ramp-up, will consider organic CapEx for new dosage forms.
Q 7 (Competitive Intensity & Market Structure): How is competition evolving in Trade Generics and CDMO?
A (Management):
• Competitive intensity rising as more players enter Trade Generics; focus on quality, relationships, and execution.
• Organized players expected to benefit from regulatory tightening (Schedule M) and industry consolidation.
Q 8 (Segment Margins & Growth Focus): What are the margin profiles and growth priorities across segments?
A (Management):
• Margins broadly stable across segments; injectables expected to deliver higher EBITDA margins (18–21%) at scale.
• Growth pursued across all three verticals; no preference for one over others.
3 · Other Key Numbers
- Q1 FY26 Revenue: INR 210 crores
- Q1 FY26 EBITDA: INR 27 crores
- Q1 FY26 PAT: INR 18 crores
- Q1 FY26 EPS: INR 8.4 (30% Y-o-Y growth)
- Dividend paid (FY25): INR 12.2 crores (INR 5.8/share)
- Gross margin: 38.3% (+71 bps Y-o-Y)
- EBITDA margin: 12.6% (+70 bps Y-o-Y)
- Generic Formulations CDMO revenue: INR 160 crores (+17.8% Y-o-Y)
- Trade Generics & Institutional revenue: INR 44 crores (+25.2% Y-o-Y)
- Exports revenue: INR 6 crores (+45.4% Y-o-Y)
- CapEx planned for Plant 6: INR 40–50 crores
- Peak revenue potential (all plants incl. injectables): INR 1,100 crores
- Active Trade Generics portfolio: ~200+ products
- Distribution network: ~1,000+ stockists
- No order book value disclosed; margin by segment not specifically quantified.
- Depreciation run-rate to remain stable until Plant 6 capitalization; will increase post-commissioning.
- No one-off elements in Q1 export growth.
- No formal revenue/margin guidance provided.