Windlas Biotech

Windlas Biotech reported a strong financial performance for Q4 and FY26. The company's revenue grew 19% year-on-year to INR904 crores for FY26, marking the first time it crossed the INR900 crore threshold. Q4 FY26 revenue also saw an 18% year-on-year increase to INR238 crores, extending its track record to 13 consecutive quarters of record revenue. The company achieved its highest post-listing EPS of INR31.60 for FY26, while maintaining ROCE and ROE above 25%.

The Generic Formulations CDMO vertical was a key growth driver, achieving a 20% year-on-year growth to INR664 crores in FY26 and INR176 crores in Q4 FY26. The Trade Generics and Institutional vertical grew 13% to INR195 crores for FY26, despite some softness in Q3 and Q4 due to the codeine issue. The Export vertical demonstrated significant growth, with revenue increasing by 40% to INR46 crores in FY26 and 67% to INR17 crores in Q4 FY26, validating the company's efforts in regulatory approvals and product registrations.

For FY26, adjusted EBITDA stood at INR121 crores (13.4% margin), and PAT was INR83 crores (9.2% margin). In Q4 FY26, adjusted EBITDA was INR33 crores (13.6% margin), and PAT was INR23 crores (9.7% margin). The business generated INR105 crores of net operating cash flows, contributing to a strong net liquidity position of INR251 crores at year-end. This performance reflects the company's focus on scalability, durability, and profitability.

The company completed an INR47 crore buyback without promoter participation, reflecting confidence in its intrinsic strength. A dividend of INR13 crores, or INR6.3 per share, has been proposed for FY26. Management's capex philosophy focuses on 1.5 to 2.5-year chunks for capacity expansion, rather than longer 5-year cycles. Plant 6 is on track for commercialization by H1 FY27, and no new organic capex beyond maintenance is planned for FY27, with potential for additional capacity in FY28 based on utilization.

Windlas Biotech emphasizes robust quality systems and compliance, especially with increasing regulatory intensity for injectables, exports, and complex generics. The company's Plant 5 injectable facility received GMP certification from the Philippines, and EU GMP approval is on track. They conduct 70-80 customer audits annually across four facilities and focus on 'quality by design,' learning management systems, and external subject matter expert training to ensure high standards.

The trade generics vertical experienced some softness in Q3 and Q4 FY26 due to the codeine issue. Management is actively working to fill this gap with alternate products, including Ayurvedic and non-codeine cough syrups. They noted that large multinational brands have exited the codeine market, creating opportunities. The company believes in the long-term growth potential of trade generics, driven by geographic and portfolio expansion, and new institutional accounts.

The company's injectable facility is capable of filling vial formats, positioning it for the emerging GLP-1 market. Management is keenly watching the GLP-1 space, seeing it as a 'game changer' globally and in India, particularly for metro areas. While they can fill vials, they anticipate CDMO opportunities as volumes for GLP-1 products grow and companies seek external manufacturing partners. They are not currently pursuing GLP-1 for the trade generics route due to its metro-centric nature and regulatory actions against misuse.

Windlas Biotech has significantly reduced its working capital days from around 40 to 20-25 days. Management attributes this to conscious efforts and discipline across all departments. They aim to maintain these levels, acknowledging that minor variations of 10-15 days are possible due to external factors or product mix changes. This focus on working capital efficiency contributes to the company's strong liquidity position.