Windlas Biotech Limited (NSE: WINDLAS) Q1 2026 Earnings Call dated Aug. 13, 2025
Corporate Participants:
Unidentified Speaker
Hitesh Windlass — Managing Director
Komal Gupta — Chief Executive Officer & Chief Financial Officer
Analysts:
Unidentified Participant
Dhwanil Desai — Analyst
Sudarshan Padmanabhan — Analyst
Vilina Jain — Analyst
Ankit Gupta — Analyst
Nirali Shah — Analyst
Nitin Agrawal — Analyst
Veer Vadera — Analyst
Amit Agicha — Analyst
Shreyansh Jain — Analyst
Paras Chheda — Analyst
Avnish Burman — Analyst
Presentation:
operator
Ladies and gentlemen, please stay connected. The call will begin shortly. Good day and welcome to The Winless Biotech Limited Q1FY26 earnings conference call. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your Touchstone phone.
Please note that this call is now being recorded Today on the call we have Mr. Hitesh Windless, Managing Director Ms. Komal Gupta, CEO and CFO. I now hand the conference over to Mr. Hitesh Windless. Thank you and over to you sir.
Hitesh Windlass — Managing Director
Thank you. Good afternoon everyone and thank you for joining us today for our financial results for the quarter ended 30 June 2025. We have uploaded the press release and investor presentation on our website as well as on the exchanges. I hope that everybody must have gotten an opportunity to to go through it. Initially I would like to discuss the outlook and way forward for Windless Biotech followed by financial highlights for Q1 26 of the company which will be shared by our CEO and CFO Ms. Komal Gupta. This quarter reinforces our strong growth trajectory marking the 10th successive quarter of record revenue performance.
The company reported an earnings per share of 8.4 for Q1FY26 marking a 30% YoY increase in line with its commitment to shareholder value creation. The Board paid a dividend of Rs 12.2 crores, equivalent to rupees 5.8 per share to its shareholders for FY25. In August 2025, the Indian pharmaceutical market registered a YoY growth of 9% in Q1 FY26 with a modest volume growth of 1%. We delivered 19.9% YoY revenue growth for the quarter driven by steady contributions from all three business verticals. Our generic formulation CDMO vertical continues to deliver healthy performance driven by customer additions, expansion in product portfolio and consistent delivery of quality manufacturing products.
The trade generics and institutional vertical sustained their growth momentum through deeper penetration across core and adjacent markets supported by government healthcare schemes such as Ayushman Bharat and Jan Aushadi. In exports, we are actively pursuing several strategic initiatives aimed at meeting the increasing global demand for high quality and affordable generic medicines on the manufacturing front, we are strengthening our operational infrastructure through the upgrade of our recently acquired Plant 6 which remains on schedule for its planned capacity expansion. Additionally, our injectable facility is enhancing our ability to serve diverse customer needs and deliver a wider range of products efficiently.
As we move ahead, our outlook on the broader Indian Pharma sector remains optimistic. Our focus remains on driving long term value for shareholders by boosting operational efficiencies, nurturing key talent and expanding our dosage form capabilities. I will now request Ms. Komal Gupta, our CEO and CFO to discuss the financial performance highlights. Over to you Komal.
Komal Gupta — Chief Executive Officer & Chief Financial Officer
Thank you. Hitish. Good afternoon everyone. On the back of performance momentum seen consecutively across last 10 quarters, we delivered another quarter of consistent performance. With revenue of 210 crore rupees, EBITDA 27 crores and PAT Rs 18 crores, the company recorded 20% yy growth in revenue, 27% in EBITDA and 31% impact. The company’s gross margin expanded by 71bps to 38.3% while EBITDA margin improved by 70bps to 12.6%. Windless Biotech is strategically focused on strengthening core capabilities and expanding into high potential geographies to meet evolving market needs. Through disciplined execution and operational efficiency, we are well positioned to drive sustainable growth, enhance competitiveness and create long term value for our shareholders.
Our generic formulation CDMO vertical achieved growth of 17.8% YoY contributing Rs. 160 crores in revenue. Our continuous endeavor to ensure delivery excellence and stringent quality standards strengthen our positioning as a trusted CDMO partner in pharmaceutical industry. The trade, generics and institutional vertical grew by 25.2% YoY to Rs. 44 crore. This growth was driven by enhanced distribution reach, stronger market presence in previously underserved regions and increased product range. Exports vertical registered 45.4% YoY growth to Rs. 6 crores as we continue to deepen our presence in key regulated and semi regulated markets. As we progress through FY26, the company remains focused on driving process enhancements and strengthening internal efficiencies.
We are currently witnessing encouraging trends across all business verticals. Backed by a differentiated value proposition and strong customer engagement. The company is optimally structured to unlock its long term goals in a sustainable and impactful manner. That’s all from our side. We can now begin Q and A session. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their Touchdown. Telephone. If you wish to remove yourself from the question queue, you may press star. And two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Dhuanil Lesai from Turtle Capital. Please go ahead.
Dhwanil Desai
Hi, good afternoon everyone. Congratulations for a very good set of numbers. My first question is, you know, how is the ramp up on the injectable side? And also, you know, if you can help us with the utilization and how do we see the ramp up going ahead? And a question tied to this is that our gross margin has expanded, you know, significantly. So, you know, when do we see the full benefit of, you know, cost absorption of the new plant? You know, as the scale up happens on the injectable side.
Hitesh Windlass
So as Mr. Dhanail, as discussed consistently in our past conversations, also we want to emphasize that our business is more amenable to be evaluated on longer term basis rather than quarter by quarter and also as a whole rather than part by part. Thus, we continue to reinforce this message by bringing to your attention at the company level performance as opposed to dosage form wise performance. So our action plans are in place and we are progressing on the various dosage pumps, including injectables. With regards to your question on the margin expansion, Komal, if you want to add.
Komal Gupta
Yeah, in terms of margin expansion, as we have mentioned in the past, we see that we expect the margins expansion to happen exactly when the correct operational efficiency balance along with the revenue and capacity expansion hit is difficult to mention the timeline, but we see margins growing as you have been seeing consistently.
Dhwanil Desai
No, I appreciate the point of not disclosing utilization, but I think last two quarters we were talking about increased cost depreciation because of the injectable plant. So I think it would be really good to know that, you know, how that cost absorption is happening along with the scale up. Even if you don’t want to talk about specifics, because we were talking about those factors in the last quarter. Right.
Komal Gupta
So last quarter we gave injectables revenue detail. We did not give any other detail. And that was in line with what we have been saying for earlier, all three quarters. Last year was our first year of injectables facility commercialization. And that’s why we promised 31st March post 31st March call, we promised all the investors that we would give injectables revenue detail at the end of the year. And we delivered, which was not a very, you know, encouraging number, but we don’t intend to. In addition to giving the vertical wise details which we continue to give right from beginning, we don’t want to add up another thing last quarter that was the reason why we discussed depreciation.
Of course depreciation increase was coming in from two factors for first three quarter which was injectables depreciation. We never give injectables depreciation as a separate number. But we maintained that most of the increase is because of injectables in Plant 4. There was also additional depreciation coming in from Plant 2 extension capitalization this year. Also the reduction if you see is coming in from mainly the injectables and also comportion of plant extension. That much we can mention and we can continue to mention Manil, but we don’t intend to continue to give the exact ramp up detail for every dosage form which we do not do earlier.
Also we don’t give tablet, capsule, liquid sachet such details in past we have never given.
Dhwanil Desai
Okay, appreciate that. Second question is on the, you know, I think in the commentary we talked about the export market and some steps that we are talking taking. So if you can dwell more on that, you know, so I think export numbers have been growing but still, I think, you know, still relatively smaller compared to the scale, you know, in the other two segments. So if you can talk on that and how do we see the journey here?
Hitesh Windlass
Sure. While you know this quarter also if you see our growth has been good but of course it is a small base and we really have, you know, to unlock more markets and unlock more product in our row segment. So the rest of the Asia, the cis, Africa, these are the markets that or the geographies that we are active in. And we have been adding more and more dossiers. So getting registrations done as well as getting renewals of our existing products done in these markets. Some new markets also we have been trying to open. So the registrations are expected.
You know, most of the regulatory authorities don’t really give timeline commitments here. So you know we have been waiting for some of them. In the past we had also talked about, you know, in licensing of certain MAs for Europe and those are also, you know, in the process of transfers where the regulatory authorities the filings have been done and we are now in the wait mode to get the transfer approvals. So there is a lot of work going on in the background and we are optimistic and we are expecting that as each of these various filings unlocks or approvals come through, we will be able to commercialize and expand our vertical over there.
Dhwanil Desai
Okay, I’ll have more questions, I’ll come back in the queue. Thank you.
operator
Thank you, thank you. The next question is from the line of Sudarshan Padmanabhan from Ask ndpms. Please go ahead.
Sudarshan Padmanabhan
Yeah, thank you for taking my question. And John, good set of numbers. My question is you know just taking forward from the previous participant, you know, not necessarily dwelling on numbers but if we are looking at in a utilization of injectable plant, you know, probably where do we, how have we seen the ramp up in that plant and you know, just taking forward your comments in terms of you know one is of course new client addition is you know, very good for us but how has the wallet share improved in the last, you know, two to three quarters? If you can qualitatively give some color on that.
Hitesh Windlass
Yeah, so Sudarshanji basically you know, the CDMO space is not very well documented. So you know, even for us we don’t while we get, we can track how each customer is increasing or in contribution to us or in magnitude in terms of how much, you know, business we are able to attract. But wallet share is very difficult for us to know because you know, there is no real set of publish data and also customers also don’t like to disclose what percentage or what is the total outsourcing they are doing. So hard to answer that question on our side the way we look at it is more in terms of the client concentration being an important factor.
So since we are a B2B business our internal metrics have been around ensuring that we don’t have over dependence on any one customer. So we have been over the last four, five years consistently improving in reducing the contribution of our topmost client. And this year also this quarter also we are staying in line. All our growth is coming from distributed set of clients. It is not significant or chunky growth from one business or one customer or one product. And so that way we are maintaining the health and the focus of broad based business development in this vertical.
In your third question was around the utilization levels. So on the utilization levels we are in, you know, not much is changing because of one quarter is very small period for us to say. So if you look at, you know, our last year’s, you know, numbers then we are within a range of similar utilizations.
Sudarshan Padmanabhan
Sure sir. The reason why I was asking more on the wallet share and the interest from customers is you know, the schedule M which is you know, intending to be, you know, more implemented aggressively with time. So just wanted Your sense more qualitatively, you know, from your interaction with the clients, that is the ecosystem gearing up towards, you know, this schedule and implementation focus on more quality. You know, I’m trying to understand the polarization from unorganized, inefficient players to organize. Is it starting to move?
Hitesh Windlass
Sure. I think you hit on a very important point Sudhashinji that you know, even when we first got listed, this was one of our important thesis that given the very highly fragmented nature of the contract manufacturer industry, very large number of people present and the increasing quality pressures, we definitely expected that it should lead to more benefit towards the organized players. Now if you look at schedule M, there have been lot of changes done in terms of quality expectations. They are on the infrastructure side which needs capital. They are on the day to day reporting and defect monitoring and reduction side which requires competent manpower and systems.
And they are on the soft aspects of actually doing, sorry, the actual tests being, the quality tests also being enhanced. So Indian pharmacopoeia has also been revised so more tests are required to be done. Dissolution test has entered in almost all domestic supplies. So all of this means that there is more cost, there is more oversight and there is a focus on more careful execution. And this is where the investments that we have been doing windlass since many years, whether it was our electronic systems, moving our QA and QC to electronic systems or whether it is infrastructural investments, the new facilities or even the upgrades to the older facilities and even on the manpower side where we have very strong performance linked compensation both in terms of variable pay as well as in terms of equity linked compensation.
So, so these are very important things that we have been laying the foundation and we hope that as this structural change of new schedule N continues to implement and the government becomes more and more stricter over a few further years, organized companies and people who have this forward thinking should benefit. And so that’s how our thesis has been and we continue to believe in that strongly.
Sudarshan Padmanabhan
So one final question before I jump back to you is today when I look at the raw material prices, whether it is chemicals or apa, you know, lion share of the prices have actually come down. And you know, broadly, you know, if you look at the CDMO business, it’s a cost per business model. So just wanted your thoughts. Whether you know, is this something, you know, that you would be looking at or is it something that doesn’t really matter in the overall scheme of things that something goes plus and something goes binance but business goes as it is.
Komal Gupta
We can give you the reference of last 10 quarters. There have been quarters when API prices went down a lot and there have been quarters when API prices grew net net. In the longer scheme of things, as you rightly mentioned, we don’t see a solid impact as such because you end up reaching where you want to reach by doing more volume when API prices are a little bit low. But that ultimately gets. Also when you see API prices rising, really your growth percentages don’t go haywire. So net net in the long term you end up being positive good.
So we continue to have that optimistic sense that doesn’t change because of API prices going down.
Hitesh Windlass
And also one more thing is that, you know, like our all our facilities are general category products so we are not in antibiotics. And a lot of the fluctuation that you see or hear about API prices because antibiotics are very high value, you know, high volume and high value. So therefore, you know, those companies which are having those dosage forms will have a greater impact because we are mostly general. So, you know, impact tends to be not so severe that we, you know, pointed out.
Sudarshan Padmanabhan
Sure, sir, thanks a lot. I’ll join.
operator
Thank you. The next question is from the line of Velina Jain from Perpetuity Ventures. Please go ahead.
Vilina Jain
Hi sir. So can you highlight the progress which is there on Plant 6 and the commercialization of the same?
Hitesh Windlass
Sure. Plant 6. We had acquired sort of a facility and we are now in the refurbishment phase. We expect that it will be about at least maybe two to three more quarters before we do the mechanical refurbishment and then we will enter the validation period. But given our understanding, we are completely on track so there is no slippage there. But we are expecting also how to bring it sooner so that we can cater to the business requirement. And in terms of Capex, maybe Komal, you can also share the budget and those aspects.
Komal Gupta
Yeah, CAPEX plan that we mentioned earlier stays on track for 40 to 50 crores. Capex is what is planned for this plan.
Vilina Jain
Okay, so we can expect the commercialization then only in FY27, assuming 2, 3 more quarters of refurbishment and validation.
Hitesh Windlass
It is possible that, you know, phase wise there might be areas of the facility we might be able to bring up sooner. But yeah, I mean we have not, you know, we want obviously to be able to do it like that and bring some benefit in this year. But yeah, facility, you know, in terms of the. All the areas and all the sections will mostly come up in next year. But we should have some portion of the facility being able to be Able to cater to our requirements here also.
Vilina Jain
Okay. And on a fully commercialized optimized capacity, what is the asset turns which we’ll be expecting from here.
Komal Gupta
So other than injectable, with our existing plants and Plant 6 capitalized, we should be able to deliver 1000 crores revenue. There might be some upside coming in later, Velina, on the basis of our past experience where some efficiency improvement we are able to bring in at a later stage on the basis of process improvements and you know, optimizations that are possible in the plant. That should be a later thing though to start with. As soon as Plant 6 is capitalized, we should be able to resist deliver 1000 crores aside of injectables.
Vilina Jain
Okay, and given that we are optimistic on the injectables progress, do we have any plans on the phase two expansion? Currently.
Hitesh Windlass
No. Currently we will trigger that expansion. We want to be very careful in terms of the new areas that we are opening. So Plant 6 is the most important capex that we are doing. We need to successfully finish this by this time and then as soon as the orders require us to do expansion on Plant 5 injectable capacity, we’ll do that. That is a much smaller time frame thing because from the facility wise capabilities or utilities and all that area is already built in. We just would add the machinery and qualify.
Vilina Jain
So that wouldn’t take more than a quarter or two, right?
Hitesh Windlass
Yeah, depending on what machinery we go for. Yeah.
Vilina Jain
Okay, understood. And lastly on the trade generics business, so although on a yoy basis we see a growth of growth of 25% for the business, on a QOQ basis it’s been a bit lower. So on an annual basis can we still see like a 225crore run rate for this business?
Hitesh Windlass
So Velina, as you know, we are not giving a guidance, but what I want to say is that even if you look at the past few quarters, there has been variation in TGX revenue. In some quarters we are able to, you know, ship and meet the deadline for some of the tenders. And in some quarters there is a seasonal effect in our geographies. So I would think that the base is still not so big that we can go quarter by quarter kind of trending. We still are just beginning to build this business. And so my sense is that we look at it annually and we are definitely committed to going and building this vertical in a very strong vertical for Vindala.
Vilina Jain
Understood, thank you.
Hitesh Windlass
Thank you.
operator
Thank you. The next question is from the line of Avnish barman from Bulgaria. Please Go ahead.
Avnish Burman
Hi, good afternoon. Thanks for taking my question. Komal. Is it possible to split the 18% growth rate in CDMO into volume and pricing?
Komal Gupta
Yeah, it’s mostly volume driven growth if you ask me. There will be very small portion which is driven by. Because of prices. It’s mostly volume driven.
Avnish Burman
Okay. And as you mentioned, the bulk of API price decreases we’ve seen in antibiotic side, which you don’t deal with in your portfolio. The API prices have not moved too much this quarter. Is that the right assumption to make?
Hitesh Windlass
No, they have, they have avnish. See, in our portfolio we are dealing with almost close to 400 different APIs. Right. So you know what I. And all the prices are also dependent on what is the volume that one is buying at and also what is the supplier base that one has got in a certain API. So that’s why, you know, it’s very, very complicated and we don’t want to say that. Okay. You know that there is a trend of which is impacting, you know, growth.
Komal Gupta
In terms of, you know, if everyone is wanting to give us the credit, we did work more to deliver this kind of growth. We agree.
Sudarshan Padmanabhan
Yeah, yeah.
Avnish Burman
I mean, I know it’s complicated, but I mean if you have to put it in simple terms, if even if there is like a little bit of API price decline on a blended basis, that means your volumes would have grown even more than 18%, right? That’s what you’re indicating?
Komal Gupta
That’s correct.
Hitesh Windlass
That’s correct. Yes.
Avnish Burman
Okay, great. The second question, I don’t know whether Komal, you mentioned in your opening remarks or not, but I just wanted to know the reason for the depreciation decrease this quarter sequentially and is this the current run rate before the depreciation for Plant 6 comes in wherever, whenever it comes in?
Komal Gupta
Yeah, both are correct. So depreciation reduction remains the same reason that was the reason of increase last year. So injectables capitalization that had happened because we, we do use WDV method in initial years. We end up depreciate, you know, having more depreciation impact. And as the years pass by, the overall depreciation tend to get lower. That is what is exactly happening in our case. And that’s why a depreciation reduction, and you are right, this is without the depreciation impact of Plan 6. So whenever we capitalize Plan 6, there will be some depreciation impact coming in.
Avnish Burman
So Yeah, I mean before that impact, this is the run rate for the existing business as of now.
Komal Gupta
Yes, this can be considered as A base run rate for this year.
Avnish Burman
And I think Hitesh mentioned that some phase wise commercialization for Plant 6 will happen in in the fag end of FY26. So that is when the extra depreciation starts kicking in, I’m guessing.
Komal Gupta
Yeah, it should. So you know, towards the. So whenever the capitalization happens accordingly for that portion of the year, depreciation impact should come in. You’re right.
Avnish Burman
Okay, thank you so much and congrats on a good set of numbers.
Dhwanil Desai
Thanks.
Hitesh Windlass
Thank you.
operator
Thank you. I request each participants to ask two questions. The next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.
Ankit Gupta
Yeah, thanks for the opportunity and congratulations for a good set of numbers.
Dhwanil Desai
So just wanted to check with.
Ankit Gupta
You know, last quarter we had 6 crore of revenues from the injectable segment. I know that you are not disclosing the numbers, but are we growing on a QOQ basis on this number or. You know, it has remained a steady range from that.
Komal Gupta
Because we have given last quarter the revenue Q4. If I mention that that would kind of be giving the numbers which I would want to avoid maybe. So that is the only reason we don’t want to do it. Although we want to emphasize that we continue to make progress on the action plan for improving capacity utilization for this facility.
Ankit Gupta
So improvement. Okay. So they’re improving as capacity utilization is improving. Quarter on quarter is what you are saying.
Hitesh Windlass
So yeah, Ankiti, the issue is that, you know, we want whatever the injectable, you know, progress that we are making, we are definitely, you know, trying to accelerate and the actions required to do that. Which is the more companies auditing the dossiers, more companies, you know, auditing the plant, approving, giving us the pos. All of that is in progress. Right. So it is something that, you know, dosage form wise, we don’t want to, you know, begin the tradition of giving numbers because anyways, all our business, the facility is also supporting cdmo. It is also supporting our trade generics.
Eventually for exports also it will go. So that’s why we are not providing the dosage form wise. Revenue breakups or cost breakups and things like that.
Ankit Gupta
Any thoughts on, you know, we can double our capacity in injectable by putting up another floor. So have we reached the stage that we would be taking a call on expansion on the injectable part? But it’s too early still.
Komal Gupta
We would do that when we are very close to the peak utilization of the facility. Right. We are not. Definitely not there yet.
Ankit Gupta
At least FY27, you will not take a call on that and most probably you will take a call in FY27 is what we can think of.
Komal Gupta
No, no, we don’t know, honestly at this point we don’t know. It can happen sooner or it can happen later which depends on when we see peak utilization limits reaching as I mentioned, you know, which is close to 100 crores of revenue from this. So when we see that kind of a run rate hitting then we would, you know, even when we see like a couple of months later that is where we are going to reach then we would start off for the capacity expansion. And as earlier, that is not a, that is not a, you know, very long process.
It should be maybe 2/4 is the kind of timeline it should take for us to do that.
Ankit Gupta
My last question, second question was on the cash utilization. So it’s been a very long time since we’ve been accumulating cash and have a very large kitty with us. So any thoughts on how we’ll think about utilizing it or distributing it to shareholders? Any progress on that front or have we taken any call on it yet?
Komal Gupta
Yeah, so since the, since we got listed we have maintained compliance with our dividend policy which is distributing close to 20% of the profit which we have done consistently and we hope to continue to do that in future as well. That saying that second thing is for M and A transactions also we have been exploring but we don’t want to rush it. We did not come across something solid. So we are not even in the final stages of some opportunity. But we stay open to sharing the wealth with all the stakeholders that stays on card and if we come across some opportunity we would go for that if at all.
You know, we are able to, you know, completely stabilize injectable business as well. And Plant 6 is also up and running by that time. If we don’t see any inorganic opportunity really clicking in, we would go for capex on our own for some other dosage form. That’s the plan.
Dhwanil Desai
Sure.
Ankit Gupta
Okay, thank you and wish you all this.
operator
Thank you. The next question is from the line of Nirali Shah from ashika Stock Service Ltd. Please go ahead.
Nirali Shah
Thank you for the opportunity. Just from the previous participants question, I wanted to have a clarity. What could be the seat utilization for our all of the facilities on a blended basis? I mean currently we are in mid-60s range.
Hitesh Windlass
There’s a lot of background noise. You’re asking about peak utilization for all the facilities. For all the facilities on a blended basis, yes. In the last years.
operator
Mute your lines when you’re not talking. There is a lot of background noise. Thank you.
Hitesh Windlass
So we are in the similar, you know, your utilization levels because you know, if you look at, you know, Q4 versus Q1, you know, the revenues are, you know, that way. So our revenue and utilization are going to move hand in hand because most of the growth is coming from volume. So automatically you can sort of triangulate it.
Komal Gupta
Yeah. So the moment Plan 6 is ready, we are ready for 1100 crores of revenue at peak utilization. But we see that there might be some, you know, upward possibility in that as well.
Nirali Shah
Okay, and next one on the exports. So we did guru 45% IOI. Should we view this as a sustainable growth or was there any one off element in this quarter?
Komal Gupta
None of the verticals as we earlier mentioned, we should look at the quarterly growth number and consider that as this it’s better to look at in a long term scenario for all three verticals. We say that and maintain that for the ones where there is good growth percent and the ones where we might not be very happy, that kind of growth percent both. No point looking at the quarterly growth number. We stay optimistic on exports. But what kind of growth percent number? As you are aware, we don’t really give the guidance for the upcoming periods.
Nirali Shah
And there was no one off element, right?
Hitesh Windlass
One off element?
Komal Gupta
No, no one off. Okay.
operator
And just a last one because you mentioned that.
operator
But I request you to rejoin the queue for the follow up question as there are many participants in the queue. Thank you. The next question is from the line of Nitin Agrawal from Dam Capital. Please go ahead.
Nitin Agrawal
Thanks for taking the question, sir. Hitesh. On the, on the, on our branded trade, generic business. If you can give us some qualitative sense on the last year for whereabouts, how has the portfolio expanded for the business and from a geographical perspective, how has you increased the area that you’ve been reaching out to a number of distributors as you go to reaching out?
Hitesh Windlass
Sure, sure, Nitin. So in terms of our portfolio, you know, we have an active portfolio of somewhere around close to 200 plus products and we are also increasing this. My sense is that you know, to really have, you know, there’s still a lot of room to grow in terms of portfolio also for us. But you know, so it happens step wise, you know, some of the larger companies, if you see they have a portfolio of more than 600, 800 products. So there’s a lot of room for us to grow there. In terms of the geographic areas, we are still mostly Focused in the north where up Bihar, Madhya Pradesh and Rajasthan.
These are the areas where we have been more successful and we are now also looking to have more push and see how we can activate and strengthen the other states. So that progress is also ongoing in terms of our distribution network. Again you know, just based on between last quarter and this. So Q4 we have already talked about close to about thousand plus stockist network that we are working with. So that number last three months, no significant change over there. So this has been more on the increasing the depth of more products. The growth is on that.
And there are obviously some seasonal aspects between Q4 and Q1. But yeah, I mean the longer term view is to have more than 5,6000 stockists in order to be able to cover India in a justified way. And that requires more products also that will be able to put more products also when you have a larger network and of course requires the strengthening of the team and all the those things.
Nitin Agrawal
And since you mentioned that, do you think that, you know it will be feasible for us to hit that cannons for distribution, for reach.
Hitesh Windlass
I’m sorry, I could not hear that question correctly cleanly. Can you please repeat.
operator
Can you please be little louder? We can’t hear you properly.
Nitin Agrawal
I’m sorry, I was asking, you know, Bar, since you mentioned that 5,6000 distributors would be an aspirational number to get to. To be. To make a, you know, optimal reach out on trade generic business. How much time do you think it’ll take for us to get there?
Hitesh Windlass
So Nitin, it really depends on you know, when. A lot of times when you appoint a stockist and you start the business, you know, you realize that the stock is, you know, the payment cycle with him works with us or not. Is he as organized as we would want him to be or not? Is he as aggressive in his area to push the product? So there always is some number of stockists that you end up dropping and some number of stockists that you keep on adding and the, you know, so we have to. And because we work with a very small sales force, we don’t have like a huge army of you know, medical reps, like branded generics companies.
So if you have, you have to be very, very particular in understanding the flow of goods, what kind of products the stockist is selling, how it is, how quickly he is able to liquidate which kind of products. And based on that only you increase the exposure with each stockist. So this is going to be a sort of a nucleation and a growth kind of a model. So you nucleate few and then see which ones of them grow and then keep on expanding. So it’s not like we don’t want to say that, you know, we are less aggressive in terms of pointing and trying out new stockes.
But we also also have to be very importantly careful and make sure that the health of the business is appropriate and we are not dumping inventory or there is no, you know, expansion is justified under the right health reasons of the, you know, one could do it, you know, immediately also. But there will be a time we will build it strongly.
Nitin Agrawal
Thanks. And the last one, hitesh on this, you know, over in the markets where you’re operating, how was the experience been with the competitive intensity? Has it, you see any major changes? Has it gone up? There’s been a lot of companies, at least the larger list of companies also seem to be interested in scaling up their brand generic game. So have you seen more competitive intensity increasing in some of these business?
Hitesh Windlass
Yeah, I think that, you know, as more and more companies jump into the fray, the branded generic companies have sort of a dual problem to solve. One is that they have to build a new vertical which is, you know, working on slightly different, you know, way as opposed to their branded generic. So you are not meeting the doctor. So it’s a different capability. Second is that when they sell low priced products, even if they are branded differently, the same product goes and cannibalizes their branded generic revenue in their core markets also. And we have seen large companies talking about, even in their earnings call, rejigging the distribution network because of this cannibalization.
So it’s not a straightforward thing where anybody who jumps in is able to secure those wins. But yes, this area is getting more attention and one of the things that I am actually quite happy about is that the perception that trade generics are poor quality products, that is going away, you know, because as more and more companies are looking to come in and bring products into the trade generics vertical, the acceptance is increasing. We are seeing more, you know, even patient level, you know, acceptance coming up. When onto the, you know, websites, online stores and see same product available at various different prices, they ask this question and some of our stockists come and say that okay, your products, even though we are not putting them on the 1mgs or the Pharmeasys, but they are now there and locally the stockists are pushing them and are able to generate business.
So my sense is that this vertical is going to grow and India needs it too. Right. Because a huge population is Living in these villages in Kasbah and you know, I mean like, you know, I have spoken in the past Also Allahabad has 3000 villages in one district. How are you going to cover it? With branded generic medical reps. So there will be a huge, you know, way of market opening that we believe should happen and enough room for everyone to grow and yes, of course competitive intensity will also be there.
Nitin Agrawal
Thank you so much.
operator
Thank you. I request each participant to ask two questions. The next question is from the line of Veer Vadera from Nivishai. Please go ahead.
Veer Vadera
Congratulations for a great set of numbers. So I have one question. If we look over the period of time the company’s product mix has evolved. And overall share of CDMO segment has been declined little bit. Even though it holds significant revenue potential in future, how should we view this trend going forward? And also I wanted to know the. Margin profile for each segment like CDMO. Trade, generic and export side.
Komal Gupta
So the margin profile stays similar within the vertical. We don’t see a huge change that has happened a little bit on higher side I would say but not a significant change for me to really mention in terms of how we see the growth. Honestly, I’ll tell you how we look at it internally. We are looking, looking at all the three verticals where there is infinite potential for us to grow in all three. And we are trying our best to, you know, to push all the three segments separately. Whichever we are able to execute better, we are very happy.
And so that is how we look at it. We don’t want to, you know, gun for a growth or of a particular vertical more than the other. That is not how we look at it because we have of course separate teams and we have separate strategies for all three verticals and we are trying to push all three.
Veer Vadera
Okay, thank you. Best of luck for the future.
Komal Gupta
Thank you.
operator
Thank you. The next question is from the line of Amit Agija from HG Hawa. Please go ahead.
Amit Agicha
Yeah, good afternoon.
Hitesh Windlass
Good afternoon.
Amit Agicha
Yeah, thank you for the opportunity. The current books.
operator
So your voice is cracking. Yes, please continue.
Amit Agicha
Yeah, my question was like what is the current order book size in value and volume terms and how much is from repeat customer versus new ones?
Hitesh Windlass
Yeah, this is a competitively sensitive information so we are unable to share this.
Amit Agicha
Okay, thank you. All the best.
operator
Thank you. The next question is from the line of Shreyansh Jain from 3A capital. Please go ahead.
Shreyansh Jain
Hello.
operator
Yes sir. Please continue.
Shreyansh Jain
Yeah, thank you for the opportunity and congratulations for a good set of numbers. So my first question is could you throw some light on a strategy?
operator
Can you please be a little louder? We can’t hear you properly. Yes, please continue.
Shreyansh Jain
So could you throw some, could you throw some lights on strategies to compete with pharma giants like supply and trade centric segment?
Hitesh Windlass
You know, see we are not always competing. So first of all I want to also in light of the prior question, CIPLA has been doing trade generics for last 40 years, right? They are the largest with 2,500 crore kind of revenue. We would love to make Cipla trade generics in our CDMO vertical. Right? So when CIPLA grows and we are able to supply to them as a manufacturer in cdmo, that is a win for us. And yes, when our product goes in the market and that is seen as a product coming from which is having authentic quality, affordable price and accessible, then we also win some market share through in our trade generics vertical.
So the goal is never to have a winner take. And in these complicated markets, you know, CIPLA is, even though it’s been around for 40 years, but Leaffold is also about the same size which they have built in the last 15 years. So why how could Leaffold build a business when Cipla, you know, was the biggest giant out there? So you know, I think the idea has to be so big, huge opportunity. And also it is about your team, your products, the quality, consistency, your relationship, your managing the sales channel, how you are incentivizing your people.
So a lot of those things have a play and that is part of building the business.
Shreyansh Jain
Okay, and could you highlight the market size of trade genpex segment in India?
Hitesh Windlass
Again it’s not covered by IPM or any of the larger sort of data providing companies but there have been some estimates talking about close to 30,35,000 crore kind of space. But I don’t really know whether that is validated or not.
Shreyansh Jain
Okay, and do we see any challenges in terms of CDMO business if the. US imposed tariffs on Indian players? Who are, who is our clients?
Hitesh Windlass
No, not at all. In fact I think that one of the good things about, you know, us is that most of our business is in domestic market. So in some sense neither our customers domestic market business nor our domestic market business is really impacted by the international tariff kind of issues. So we are somewhat insulated, although we don’t have opportunities to sell in those markets either. But we are somewhat insulated by these kind of things.
Shreyansh Jain
Hope to go under, sir. Thank you.
operator
Thank you. The next question is from the line of Paras Cheda from purple on Vertex Ventures llp. Please go ahead.
Paras Chheda
Yeah, thank you for the opportunity, sir. Congratulations for a strong set of results. Just to clarify, from my understanding, did I understand it correctly that our peak revenue potential, including the plant 6 but excluding the injectables, is about 1, 100 crores?
Komal Gupta
No, no, including the injectables, that is 1100 crores. Excluding injectables, it would be 1000 crores injectables, about 100 crores. That is how we are reaching 1100 crores including injectables. However, you know, I also mentioned that through efficiency initiatives that we generally drive and in past we have seen that happening in Plant 2. There might be some upside to this now in fact.
Paras Chheda
Okay, so this is also includes your plan six potentially.
Komal Gupta
Yeah.
Paras Chheda
Okay. And again for clarification, if you don’t come across any inorganic opportunity, because you’ve been, I think sitting with this cash for quite a long time now, this will again, you know, get into organic people more. Once again.
Hitesh Windlass
Yeah. So, you know, the way we think about it is, you know, we want to do strategically more dosage form expansion. Injectable was the first one. Plant six is, you know, expansion of the core. So oral solids. Again, we have done that. But you know, once we have used up Plant 6 capacity and we are seeing the line of sight to that and injectable is also ramping up, we would love to then add another dosage form and if we don’t find inorganic, then we would want to build and obviously grow. So there will be always these phase wise, you know, very judicious but very thoughtful use of capital for organic and inorganic in that manner.
Paras Chheda
And when you say another dosage form, you mean injectables or it could be another.
Hitesh Windlass
No, no, another dosage form. We don’t have so many dosage forms that we are not currently in steroids, hormones, we are not in softgel capsules, inhalers, we are not in eye drops, we are not in so many ointments. So there is a lot of room to grow. And our strategy is that as we add a dosage form, it should cater to all three of our verticals. So we have to be able to use it in TGX institutions in CDMO as well as than exports. So that’s why we want to, you know, keep going that way after stabilizing each step.
Paras Chheda
And is it fair to assume that this injectable facility, I mean the margins over there are relatively better, you know, compared to this one overall solid drug?
Hitesh Windlass
Yeah, I mean on a Fully developed business, the gross margins for injectables are higher. That’s the industry sort of.
Paras Chheda
I mean, how much percentage would you put it on EBITDA margin?
Hitesh Windlass
If you look at some of the pure injectable players in CDMO, they are somewhere in the range of 2118 to 21% EBITDA.
Paras Chheda
So potentially at least 10% of our revenue could be at least high 10 to 20 in that region. Potentially.
Hitesh Windlass
Potentially, yes. Once we execute and are able to get.
Paras Chheda
Yeah. And just last peripherman, in terms of, you know, broadly revenue growth over the medium term, let’s say three to five years and you will have some capacity organically or inorganically that will keep coming up and there is this market growth that we are seeing. Right. So I mean, what kind of revenue growth you sort of, you know, sort of not really project but you know, aim towards over the next three to five years kind of a thing. I mean, on a, you know, sort of a CAGR basis, something like that, given where the market is, given the trends in the industry, etc.
Hitesh Windlass
Yeah, this is, you know, we don’t want to sort of, you know, say that we are not giving a guidance and then give a guidance. But I think the right thing, sir, is to look at our past performance in the last 10 quarters, how we have delivered and you know, our aspiration is always do better things and we will continue to do everything that we can, staying committed to, to the same without saying that this is the number or that is the number that we are aiming for. We are trying to leverage every opportunity, unlock avenues for growth and at different points in time there will be different activities that we have to focus on to get there.
But we see room for growth in every vertical.
Paras Chheda
Right. So I mean, so for example, you know, what we see if you look at the historical growth itself, you know, I mean, over the last two years, financial years, we’ve grown by 50% for example. I mean, broadly current industry set up the dynamics the way it is some sort of historical growth that you point out, there is that room to grow further the way the industry foils and the dynamics that are there currently.
Hitesh Windlass
So, you know, while there are challenges, there are also opportunities. Right. So, you know, as we also discussed that higher quality systems and higher quality demand are pushing pressure on, you know, the smaller manufacturers. And so there is probably, you know, sort of a downwind that benefit that we organized players like us will get. Second thing is that, you know, the growth in trade generics, not just for Windlass, but for many Other people. So that is undocumented in the industry growth numbers. So as that grows again we will have you know, more opportunities to grow.
And third, which is, is actually probably one of the most important things if you look at the top 50 India listed companies and if you ask them who is doing capex for their domestic probably the answer will be very, very, very few because there is a strong base of organized suppliers of contract manufacturers, manufacturers like us. So unless companies are. So we see this, all these signs as opportunities and of course competition is part of life. Right. So you know, you have to always, you know, price right. You have to always deliver in, meet the service expectations and you know, grow that way.
So that that remains the same for everyone.
Komal Gupta
Yeah. So just to clarify we are not saying that we would maintain the growth percentages to you know, kind of say that the maintain the growth percentages that we have given in last two years or last five years or last 10 years. The CAGR and the percentage growth and the averages would be very different. So what we are saying is that we can only commit to you that we would continue to make our effort. We would continue to do stuff that is good for company in the long term instead of looking at the short term picture.
That is what we are committed to, that is what we have been doing. And so that’s why just to you know, while we see all the growth possibilities we don’t want you to assume from our answer that there is a particular percentage of growth a percent, you know, bettering the growth percent is not with what we are saying it might happen or it might not happen. That is not something that we know what we are internally pushing might be a much bigger number but we don’t know if that is going to happen or not.
Paras Chheda
I understand that. I mean see I have been tracking the company for the last last couple of years now although I missed this last quarter. But I mean I must admit that this is one of the most very well managed companies at least amongst what I have come across. And you know the management is excellent. Now the only one thing that I think, you know, and again, you know, because you have addressed your industry but that there could be a little bit of that, you know, aggressive move towards capacity expansion given our investments where we are, I mean the cash that we’re sitting on.
But all said and done, it’s of course up to you all but I mean it’s one of the best companies. So I do understand it’s difficult to project but that’s sort of a trend that I was looking out for in terms of where do we stand and the industry grows.
Komal Gupta
Thank you. Thank you for the kind words.
Hitesh Windlass
Thank you, sir.
operator
Thank you very much. Ladies and gentlemen, due to time constraints, we will take that as the last question for today. On behalf of Finless Biotech Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.
Komal Gupta
Thank you.
Hitesh Windlass
Thank you.