Windlas Biotech Ltd- The Pharma beneficiary
Jul 2, 2025
6 mins to read
1. About the Company
Windlas Biotech is one of India's leading CDMO (Contract Development and Manufacturing Organization) players, operating primarily in the generic pharmaceutical space. Established in 2001 and listed in August 2021, the company has a strong legacy in providing complex formulation services to top pharmaceutical companies in India. Headquartered in Dehradun with five WHO-GMP compliant manufacturing units, Windlas has grown from being a pure-play domestic supplier to gradually expanding into exports and specialized therapies like injectables.
The company caters to over 5,500 brands and maintains relationships with 7 of the top 10 Indian pharmaceutical formulation companies. Windlas is vertically integrated across formulation development, licensing, commercial manufacturing, and packaging. The company’s evolution is marked by milestones such as:
Commissioning injectable facilities in FY25
Extending Plant-2 capacity for oral solids
Adding Plant-6 for future expansion
Highest ever EPS post-listing in FY25: Rs. 29.2
2. Key Financial Metrics
3. Industry Analysis
The Indian pharma industry remains resilient, with FY25 witnessing 8.4% YoY growth. However, volume growth was subdued and pricing supported most topline expansion. The CDMO segment, particularly for generic formulations, is witnessing tailwinds due to:
Regulatory reforms like Schedule M compliance (Oct 2021).Schedule M lays down the Good Manufacturing Practices (GMP) that pharmaceutical companies in India must follow for the manufacture, testing, and storage of drugs, removing out non-compliant smaller manufacturers
Rising preference for outsourcing from top pharma firms
Cost competitiveness of India in global formulations manufacturing
Windlas, with its focus on complex generics and chronic therapies, is well-positioned to benefit from this shift. The trade generics segment is also growing rapidly with support from government schemes like Jan Aushadhi and penetration in underserved rural markets.
4. Business Segments
a) Generic Formulations CDMO (73% of FY25 revenue)
5-year revenue CAGR: 14%
Products: oral solids, modified-release, dispersible, chewables
Focus on chronic/sub-chronic therapies (60% share)
99% product IP owned by Windlas
757 customers, 5,582 brands
Top 10 customer concentration down to 35.5%
As per management, the CDMO segment is expected to maintain double-digit growth with margin stability due to increased contribution from complex generics and deeper wallet share from existing clients.
b) Trade Generics & Institutional (23%)
5-year CAGR: 40%+
400 brands across 29 states
Direct distribution to 1,095 stockists (not Medical Representative driven)
Supported by rural demand, affordability, and govt procurement
Management has highlighted strong growth visibility in this segment driven by rural healthcare access, demand from Jan Aushadhi channels, and the ability to launch newer SKUs under their own brands.
c) Exports (4%)
FY25 Revenue: Rs 33 Cr (+19% YoY)
Presence in semi-regulated markets
Over 80 products exported in FY25
Dossier filings in progress for regulated markets.
Export business, while currently small, is expected to see scale-up from FY27 onwards as regulatory approvals materialize. Management maintains a cautious but optimistic tone here.
5. P&L Analysis
Revenue has grown from ₹352 Cr in FY18 to ₹760 Cr in FY25 — a CAGR of ~11.5%.
Notable acceleration post-FY22, in line with capacity expansion (Plant 2 extension and injectable commissioning).
FY25 revenue growth of ~20% YoY.
Operating Margins (OPM) remained relatively stable in the 10–13% range throughout, with FY25 at 12%.
Depreciation rises due to expansion and Interest slightly rose due to increasing debt(Still very much within the range)
6. Balance Sheet Analysis
Net cash business with 495Cr Reserves and 33Cr Debt
Asset turnover: 1.1x
Plant utilization for oral solids: ~62%
Fixed assets increased to 223Cr up from 179Cr
According to management, despite planned capex of Rs. 80–100 Cr over the next two years, the company intends to remain debt-free, financing growth through internal accruals and existing cash flows.
7. Cash Flow Analysis
Operating cash flow (OCF): Rs. 68.2 Cr
FCF (post capex): ~Rs. 55 Cr
Capex: Rs. 72.2 Cr (FY25)
Working capital tightly managed at 14 days
Management reiterated their strong cash conversion cycle and emphasized that they expect OCF to improve further from FY26 as new capacity utilization improves, especially in injectables.
8. Concall Summary (Q4FY25)
Plant 6 is expected to be fully operational in FY26, increasing Windlas’ oral solids capacity from ₹800 Cr to ₹1,000 Cr.
The injectable facility, commissioned last year with ₹75 Cr investment, started contributing revenue (~₹6 Cr in Q4).
The margin profile for injectables is higher, but asset turns will remain modest (~1.2x) in early years.
Management did not provide numerical guidance for FY26 but expressed confidence in growth from injectables and Plant 6.
They expect improvement in return ratios as new capacities contribute meaningfully over the next 4–6 quarters.
No large capex is planned in FY26 aside from maintenance and injectable validation support.
FY25 R&D spend was ₹6.3 Cr; management plans to increase this to support complex formulation development.
Working capital days remained at 14 — among the lowest in the industry.
9. Key Growth Drivers / Special Situation Triggers
Commercialization of Injectable Facility
The ₹75 Cr injectable plant has begun generating revenue in FY25, with management expecting significant ramp-up in FY26–27. This vertical opens up access to higher-margin therapies like oncology and critical care, marking Windlas’ entry into a more complex and less commoditized space.Trade Generics Scale-Up in Semi-Urban and Rural India
Windlas’ non-MR-based distribution model and presence in over 1,000 stockists makes it a major beneficiary of increasing generic penetration in Tier 2–3 India. With ~400 SKUs and demand from Jan Aushadhi stores, this segment has compounded at 40%+ and continues to expand rapidly.Expansion of Oral Solid Capacity (Plant 6)
The new oral solids facility (Plant 6) is expected to add ~₹200 Cr in potential annual revenue capacity starting FY26. It positions Windlas to serve more clients and scale volume-led growth in its CDMO vertical without additional fixed cost strain.Regulatory Tailwind from Schedule M Compliance
Many smaller, non-compliant formulation manufacturers have shut down or lost business after stricter Schedule M enforcement post-2021. Windlas, with its strong compliance framework and multi-site WHO-GMP certified plants, is consolidating market share in the CDMO space.Deeper Penetration in Chronic Therapies
Chronic and sub-chronic therapies now contribute ~67% of Windlas’ formulation portfolio. These segments offer longer duration prescriptions, higher repeat usage, and greater pricing stability — translating to stronger revenue visibility.Asset-Light, Net-Cash Balance Sheet Enables Scalability
With negligible debt and over ₹200 Cr in cash, Windlas can fund its expansion internally without dilution or leverage. This financial flexibility allows them to invest in scale (e.g., Plant 6, new dossiers) while maintaining a healthy return profile.Entry into Exports with Gradual Regulatory Filings
Although small currently, Windlas has initiated multiple product filings for semi-regulated and regulated export markets. This long-term pipeline, if executed well, could open up high-margin B2B international business from FY27 onward.Strong Customer Base with Deepening Wallet Share
Serving 7 of the top 10 Indian pharma companies and over 750 customers, Windlas is strategically positioned to grow wallet share from its existing base by offering complex formulations and lifecycle management support.
10. Valuation vs Peers
Trading at Reasonable valuation ratios compared to peers.
Management believes re-rating is possible if the injectable and export verticals deliver meaningful contribution by FY26–27.
11. Antithesis
Injectables ramp-up could be slower than expected, leading to underutilized capacity and depressed return ratios despite capex already incurred.
Export business remains nascent, contributing just 4% of revenue. Regulatory approvals in regulated markets are uncertain and can take several years to materialize.
Customer concentration in CDMO is still material, with the top 10 clients contributing over one-third of revenue. Any client exit or pricing renegotiation could impact profitability.
Trade generics face pricing pressure, given low entry barriers and high competition. This segment may struggle to maintain its current growth trajectory and margin profile.
No high-margin complex IP or ANDA pipeline, which limits long-term optionality and keeps Windlas positioned in lower-valuation brackets compared to innovation-led peers.
Compliance or regulatory lapses, if they occur, could severely disrupt operations. The pharma manufacturing business is highly sensitive to audit failures.
12. Conclusion
Windlas Biotech is evolving into a capital-efficient, multi-vertical pharma company with strong fundamentals. The business mix is improving, the balance sheet remains clean, and multiple levers for margin expansion are in place.