Incorporated in 2001, Windlass Biotech Limited is amongst the top five players in the domestic pharmaceutical formulations contract development and manufacturing organisation ('CDMO') industry in India in terms of revenue. With over two decades of experience in manufacturing both solid and liquid pharmaceutical dosage forms and significant experience in providing specialized capabilities, including, high potency, controlled substances and low-solubility, the company provide a comprehensive range of CDMO services ranging from product discovery, product development, licensing and commercial manufacturing of generic products, including complex generics, in compliance with current Good manufacturing Practices (GMP) with a focus on improved safety, efficiency and cost. Company's focus has currently been on launching new complex generic products in the chronic therapeutic category linked to lifestyle related disorders. The company have three distinct strategic business verticals ('SBVs'): (i) CDMO Services and Products; (ii) Domestic Trade Generics and over-the-counter ('OTC') Brands; and (iii) Exports. The company currently owns and operates four manufacturing facilities located at Dehradun in Uttarakhand. As of March 31, 2021, company's manufacturing facilities had an aggregate installed operating capacity of 7,063.83 million tablets/ capsules, 54.46 million pouch/ sachet and 61.08 million liquid bottles. In addition, the company have recently received a license to manufacture certain APIs at company's Dehradun Plant – I, which will help company with backward integration. Company's manufacturing facilities are regularly inspected for compliance with current GMP and all of company's manufacturing facilities are Schedule M compliant, while company's Dehradun Plant – I, Dehradun Plant – II and Dehradun Plant – IV are compliant with standards set by WHO GMP. Company's R&D laboratories (which include formulation development, analytical development and chemical research areas)are located at Dehradun Plant - I, and are recognized as an in-house R&D unit by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India. As per financial performance, Windlass has posted total income/net profits (loss) of Rs. 356.57 cr. / Rs. 11.11 cr. (FY18), Rs. 311.52 cr. / Rs. 63.71 cr. (FY19), Rs. 331.33 Cr. / Rs. 16 Cr. (FY20) and Rs. 430.70 Cr. / Rs. 15.62 Cr. (FY21). So company has posted average results. In FY21, company has shown good growth in sales, but net profit is almost static. Company has posted an average EPS of Rs. 13.59 and average RoNW of 13.27% for last three fiscals. Issue is priced at a P/BV of 4.21 as per NAV of 109.36 on 31.03.21. As per FY21 earnings, on fully diluted equity post issue, IPO is priced at P/E of around 64. As per RHP, there is listed peers shown in above table. On BRLM's front, three BRLMs are associated with this IPO, and have handled around 34 IPO in last three fiscals. From last 10 IPOs, 5 are opened below issue price and remaining are opened above issue on the day of listing. As of now, 2 are trading below and other are trading above issue price. ( As on 29.07.21) As per financials, Windlass has shown average results, RoNW is 18.19% and P/E is around 64, so IPO looks over valued. When we do detailed analysis of financials, gross profit is increasing, but due accounting adjustments, adjustments of joint venture profit (loss) and impairment of Goodwill decreased net profit. Performance of BRLM is average. So, we are giving NEUTRAL rating to this IPO and investors with view of long term may apply in this IPO.
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