Windlas Biotech Limited — Q3 FY26 earnings call

Call held 11 Feb 2026

Management summary

Windlas Biotech delivered a strong Q3 FY26, with revenue growing 20% YoY to INR233 crores, driven by robust performance in its CDMO and Exports segments. The 9-month FY26 revenue reached INR666 crores, up 19% YoY, and EPS increased 12% to INR24.02. While Trade Generics growth was slower in Q3, the company is progressing with Plant 6 nearing mechanical completion and remains focused on strategic expansion and operational efficiencies amidst a consolidating regulatory environment.

Highlights

  • Q3 FY26 revenue from operations grew 20% YoY to INR233 crores, marking the 12th consecutive quarter of highest ever revenue.

  • 9 Months FY26 revenue from operations grew 19% YoY to INR666 crores.

  • Generic Formulations CDMO vertical demonstrated strong growth of 23% in Q3 FY26 and 20% in 9 months FY26.

  • Exports vertical showed robust performance with 36% growth in Q3 FY26 and 29% in 9 months FY26.

  • 9 Months FY26 EPS increased 12% YoY to INR24.02, reflecting strong financial performance.

Concerns

  • Trade Generics and Institutional verticals grew a more modest 7% in Q3 FY26, compared to 18% for 9 months FY26.

  • Industry volume growth was reported as muted at 1.6% YoY in Q3 FY26, though management questioned data completeness.

  • Management refrained from providing quantitative future guidance for verticals due to competitive reasons and the binary/time-taking nature of export approvals.

Key financials

4 periods

Q3 FY26

  • Revenue
    ₹233 Cr
    YoY +20%
  • PAT
    ₹22 Cr
  • PAT Margin
    9.6%

Q3 FY26, ex-ESOP

  • EBITDA
    ₹32 Cr
  • EBITDA Margin
    13.6%

9 Months FY26

  • Revenue
    ₹666 Cr
    YoY +19%
  • PAT
    ₹60 Cr
  • PAT Margin
    9%
  • EPS
    ₹24.02
    YoY +12%

9 Months FY26, ex-ESOP

  • EBITDA
    ₹89 Cr
  • EBITDA Margin
    13.3%

What they filed

Q4 FY26: revenue up 17.2%, net profit up 0.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ1 FY25Q2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26
Revenue175 187 195 203 210 +20%222 +19%233 +19%238 +17%
EBITDA21 23 25 26 27 +29%29 +26%24 −4%25 −4%
Net profit13 16 16 16 18 +38%18 +13%15 −6%16 +0%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentGrowth (Q3 FY26)Growth (9 Months FY26)
Generic Formulations CDMO23%20%
Trade Generics and Institutional7%18%
Exports36%29%

Capital allocation

high confidence
  • Capex Capex disclosed
    • Plant 6 completion ₹10 Cr
    On which the expected capex is about INR50 crores to INR60 crores. Most of it is already incurred in coming period, about INR10-odd crores should get added.
  • Debt Debt disclosed
    My second question is, how does the management look at very heavy capex, a high debt, not exactly a high debt, but a good amount of debt because since we are a debt-free company and also a big mission greater than the cash that we have or do we always try to maintain a debt-free company and not look at very heavy capex or acquisition? Yes, that's my question?
  • Liquidity Liquidity disclosed Net cash position improved versus H1, but not quantified due to balance sheet not being audited in limited review.
    Cash flow generation, because the balance sheet is not audited in limited review, we want to refrain from mentioning those numbers, but there is improvement versus H1.

Guidance & targets

Capex

  • Plant 6 mechanical completion Capex · FY26 · High confidence by end of FY '26
    our Plant 6, as you are aware, we are about to complete Plant 6 mechanical completion is expected to be completed by end of FY '26.

    — Komal Gupta

Capacity

  • Revenue capacity from all plants (ex-injectables) Capacity · post Plant 6 completion · High confidence INR1,000 crores
    So this is -- with this, we would reach INR1,000 crores revenue capacity from all the plants, excluding injectables.

    — Komal Gupta

  • Additional revenue capacity from injectables Capacity · post Plant 6 completion · High confidence INR100 crores
    And from injectables, we are talking about INR100 crores additional.

    — Komal Gupta

Operations

  • Plant 6 commercial operations Operations · H1 FY27 · Medium confidence H1 FY27
    net-net, in first half of FY '27, we should be ready to also do the commercialization.

    — Komal Gupta

Depreciation

  • Plant 6 annual depreciation Depreciation · annually, starting H1 FY27 · Medium confidence INR9-10.8 crores
    broadly, you can consider maybe INR60 crores per annum into -- INR60 crores into, say, 15% to 18% somewhere, I don't know. Initially, that should be the number annually.

    — Komal Gupta

What to watch in Q4 FY26

Plant 6 Commercial Operations Start

H1 FY27
Current Mechanical completion by end of FY26
Target Commercial operations begin

Why it matters

Signals new capacity coming online and potential revenue contribution from the new facility.

net-net, in first half of FY '27, we should be ready to also do the commercialization.

Risks & concerns

  • Muted Industry Volume Growth

    medium

    Industry volume growth was 1.6% YoY in Q3 FY26, which management noted as muted and questioned the completeness of data capture for government programs.

    Management acknowledged

  • Competitive Landscape in Trade Generics

    medium

    Management noted increased competition in the Trade Generics segment with 'more and more people are jumping into Trade Generics'.

    Management acknowledged

  • Lumpiness of Institutional Business

    medium

    Institutional business can be lumpy, with tenders sometimes captured within the quarter and sometimes not, impacting quarterly performance.

    Management acknowledged

  • Regulatory Pressure and Industry Consolidation

    medium

    Strict enforcement of Schedule M by regulators is leading to inspections and closures, posing a risk to smaller, less compliant players but an opportunity for organized CMOs.

    Management acknowledged

Q&A highlights

6 direct, 1 evasive
Upcoming Capex and Revenue Capacity Direct
our Plant 6, as you are aware, we are about to complete Plant 6 mechanical completion is expected to be completed by end of FY '26. On which the expected capex is about INR50 crores to INR60 crores. Most of it is already incurred in coming period, about INR10-odd crores should get added. So this is -- with this, we would reach INR1,000 crores revenue capacity from all the plants, excluding injectables. And from injectables, we are talking about INR100 crores additional.

Provides specific figures for remaining capex on Plant 6 and the resulting increase in revenue capacity for the company.

Asked by Aniket from Cr Kothari Sons and Stock Broking

Plant 6 Regulatory Approvals and Market Focus Direct
No. As you know, Aniket, we are not targeting the U.S. market. And even Plant 6 has been added to primarily support all 3 verticals. And as you know, more than 95% sales we are doing to India. So the utilization of Plant 6 will also be more focused towards India and then it will gradually support the other verticals also. So no, we are not looking at U.S. or Europe for Plant 6.

Clarifies that the new Plant 6 capacity is primarily for the Indian market and not targeting highly regulated markets like the US or Europe, managing investor expectations.

Asked by Aniket from Cr Kothari Sons and Stock Broking

Trade Generics Growth Strategy Partial
And I believe that growth in this vertical is driven by geographic expansion, adding more products, portfolio expansion and addition of new institutional accounts with a strongly aligned sales force. So we continue to consistently work on these fundamentals and chase our growth aspirations for this vertical.

Explains the strategic levers management is pulling to drive growth in the Trade Generics segment, which showed slower growth in Q3.

Asked by Dhwanil Desai from Turtle Capital

CDMO and Export Growth Guidance Evasive
So Dhwanil, as you are aware, we refrain ourselves from giving future guidance, either overall revenue-wise or bottom line-wise or even vertical-wise breakup. But we continue to stay positive on all three verticals and we see that there is growth opportunity in all of them.

Management explicitly declined to provide quantitative guidance for specific verticals, citing competitive reasons and the unpredictable nature of export approvals.

Asked by Dhwanil Desai from Turtle Capital

CDMO Volume Growth and Facility Contribution Direct
One thing that we can share, Gautam, is that most of our growth comes from volume, right? Because we are a cost-plus business and API prices are not increasing. So the growth is primarily volume oriented. And for sure, there is improved contribution from our injectable facility as well as from our Plant 2, which -- extension which we commissioned in the late last year.

Confirms that CDMO growth is volume-driven and that recent investments in injectables and Plant 2 are successfully contributing to growth.

Asked by Gautam Gosar from Monarch AIF

Industry Volume Growth and Data Reliability Direct
I think that, in fact, in our side, we have been thinking why the industry volume growth has been so muted, right? And we have been also discussing around whether the data capture is full around especially government programs like Jan Aushadhi and Ayushman Bharat-related purchases, is that even being captured by the industry data reporting agencies like IQVIA and AIOCD.

Management expresses skepticism about the accuracy of reported industry volume growth, suggesting that official data might not fully capture the market reality, especially for government programs.

Asked by Avnish Burman from Vaikarya Change LLP

Schedule M Implementation and Industry Consolidation Direct
So the government is very serious. Regulator is very serious. A lot of inspections have been done. Some plants have been given observations and closures have also happened. In the overall scheme of things, if you see just from the perspective of how many CMOs are needed to really handle this market, it's certainly not 13,000-plus, right? There is no reason for the CMO industry to stay at this kind of a fragmented level.

Highlights the ongoing regulatory crackdown (Schedule M) as a significant driver for consolidation in the fragmented CMO industry, benefiting compliant and capable players like Windlas.

Asked by Vileh Rai from Kamayakya Wealth Management

Long-term Growth and Debt Strategy Direct
So in answer to your first question about the long-term trajectory or the arc of Windlas Biotech's birth and growth, right, I think that it is the journey is probably most importantly defined by capability building because when we are in a segment that is B2B and especially in a highly regulated industry with a lot of quality parameters changing, every one has to focus on capability building. ... And we like to be cash rich, but we are not risk-averse. So in past, we have taken several debt for working capital and for capex and for -- whenever we see an opportunity, so like if I have to do an acquisition, it's a very good strategic fit, I won't be shy in using my cash and also taking a debt.

Provides insight into the company's foundational strategy of capability building for growth and its flexible, yet disciplined, approach to capital allocation, including willingness to use debt for strategic M&A.

Asked by Kushal Goenka from Mangal Keshav Financials LLP

2 min read 5 chapters

Detailed narrative

Strong Q3 & 9 Months FY26 Financial Performance

Windlas Biotech delivered robust financial results for Q3 FY26, with revenue from operations growing 20% YoY to INR233 crores. This marks the 12th consecutive quarter of achieving the highest ever revenue. For the first nine months of FY26, the company reported a 19% YoY revenue growth, reaching INR666 crores, and an EPS of INR24.02, representing a 12% YoY increase. EBITDA for 9M FY26 stood at INR89 crores (13.3% of revenue), with PAT at INR60 crores (9% of revenue).

Key Segmental Growth Drivers

The Generic Formulations CDMO vertical was a primary growth engine, expanding by 23% in Q3 FY26 and 20% for the nine-month period, driven by an expanding customer base and new product launches. The Exports vertical also demonstrated strong momentum, growing 36% in Q3 FY26 and 29% for 9M FY26, through increased penetration into RoW and semi-regulated markets. While the Trade Generics and Institutional verticals grew 18% for 9M FY26, their Q3 FY26 growth was a more modest 7%.

Infrastructure Expansion and Future Capacity

The company's strategic investments in infrastructure are progressing well, with Plant 6 expected to achieve mechanical completion by the end of FY26. The remaining capex for Plant 6 is approximately INR10 crores out of a total INR50-60 crores. Upon completion, Plant 6 is projected to increase the company's revenue capacity to INR1,000 crores (excluding injectables), with an additional INR100 crores from injectables. Commercial operations for Plant 6 are anticipated to commence in H1 FY27, with an estimated annual depreciation of INR9-10.8 crores.

Impact of Regulatory Environment and Industry Consolidation

Management highlighted the significant impact of Schedule M implementation, noting that the government's strict enforcement has led to inspections and closures for non-compliant players. This regulatory pressure is expected to drive consolidation in the highly fragmented CMO industry, benefiting organized and quality-focused players like Windlas Biotech. The company emphasizes capability building, talent, and robust systems as key differentiators in this evolving landscape.

Capital Allocation and Growth Philosophy

Windlas Biotech maintains a debt-free balance sheet and prioritizes internal accruals for capex, such as the ongoing Plant 6 expansion. While the company is cash-rich, it is not risk-averse and is open to taking on debt for strategic acquisitions that align with its long-term growth objectives, particularly if capacity utilization in injectables reaches high levels. The core philosophy revolves around disciplined execution, diversification, operational efficiencies, and talent development to create long-term shareholder value.

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