Windlas Biotech Ltd Management Discussions

Overview

Behind many of the medicines that Indians rely on every day stands a company most of them have never heard of — and, in a sense, that is the point. For more than two decades, Windlas Biotech has been the partner that Indias leading pharmaceutical brands turn to when a medicine needs to be developed, approved, and manufactured to the highest standards. We do not put our name on the box; we put our science, our systems, and our reputation behind the names that do. When a pharmaceutical company asks us to make its product, it is trusting us with the one thing it cannot afford to compromise — quality — and earning that trust, again, is the everyday work of our company.

Financial Year 2026 was, by almost every measure, the strongest year in our history. We crossed 9,000 Millions in revenue for the first time, closing at 9,041 Millions, and in doing so completed our thirteenth consecutive quarter of record revenue — a run that now stretches across more than three years and through every kind of operating environment. We grew faster than our industry. We strengthened our margins on the measure that reflects the operating business. We generated more cash than ever before and we ended the year as we have ended every recent year: net debt-free, and able to invest in our future and reward our shareholders at the same time.

This discussion explains how that year came together, and the thinking behind it. We have tried to write it plainly, becauseourshareholders includenot only largeinstitutions but many individuals who have placed their savings, and their faith, in this company. To all of them we offer the same promise we make to our customers: we will tell you what we intend to do, and then we will do what we said. What follows is, in the end, an honest account of how well we kept that promise this year.

1. Economic and Industry Backdrop

1.1 The Macroeconomic Setting

To understand a companys year, it helps to understand the world it lived through. FY26 was a testing year for the global economy — growth was slow and uneven, held back by geopolitical tension, fractured trade, and the long shadow of high interest rates. India, though, stood apart. For yet another year the fastest-growing major economy in the world, India grew by an estimated 7.6%; and, crucially for a company like ours, it grew for the right reasons. This was not growth borrowed from any one sector, but growth built on the rising incomes, the growing confidence, and the improving health of ordinary Indians.

For a company whose business is medicines made for the Indian market, these are not abstract statistics — they are the foundations of our demand. As incomes rise, families spend more on their health. As insurance widens, more of that spending becomes formal and recurring. As the Government invests in hospitals, primary care, and affordable-medicine programmes, healthcare reaches places it has never reached before. Every one of these forces moved in our favour this year, and each is structural — the kind of tailwind that does not reverse with the next quarter.

Global growth — a regional snapshot

Region / Economy	2024 (Actual)	2025 (Estimate)	2026 (Projected)	Trend
Global Economy	3.2%	3.1%	3.1%	Stable
Advanced Economies	1.7%	1.8%	1.8%	Modest recovery
United States	2.8%	1.8%	1.7%	Moderating
Euro Area	0.8%	0.8%	1.2%	Gradual recovery
Emerging & Developing Asia	5.3%	4.8%	4.7%	Sustained leadership
China	5.0%	4.6%	4.5%	Stabilising
India	8.2%	7.1%	7.6%	Fastest growing major economy
Emerging & Developing Economies	4.2%	3.9%	3.9%	Growth engine

Source: IMF World Economic Outlook (Apr 2026); MoSPI Second Advance Estimates (Feb 2026). Figures to be reconciled to final published data.

Indias development indicators support healthcare demand

The structural drivers that matter most to pharmaceutical demand all strengthened during the year. Rising incomes lift affordability; expanding insurance formalises spending; and sustained public investment widens access — particularly across the Tier-2, Tier-3, and rural markets our Trade Generics vertical serves.

Source: MoSPI; Government of India budget documents; industry estimates.

Indicator	FY26	Growth	Source
Nominal GDP ( Rs. Lakh Crore)	Rs.345.47 Lakh Crore	+8.6% YoY	MoSPI SAE, Feb 2026
Real GDP Growth (%)	7.6%	Recovery from 7.1% in FY25	MoSPI SAE, Feb 2026
Gross National Income (GNI)	Rs.341.16 Lakh Crore	+8.7% YoY	MoSPI SAE, Feb 2026
Gross National Disposable Income (GNDI)	Rs.353.13 Lakh Crore	+8.8% YoY	MoSPI SAE, Feb 2026
Per Capita GNI ( Rs.)	Rs.2,40,147	+7.7% YoY	MoSPI SAE, Feb 2026
Per Capita GNDI ( Rs.)	Rs.2,48,572	+7.9% YoY	MoSPI SAE, Feb 2026
Private Final Consumption Expenditure — Real	7.7% real growth	Robust domestic demand	MoSPI SAE, Feb 2026
Gross Fixed Capital Formation — Real	7.1% real growth	Sustained investment cycle	MoSPI SAE, Feb 2026
Gross FDI Inflows (FY26 — Full Year)	US$ 94.53 Billion	+ 17% YoY	DPIIT RBI
Forex Reserves (Jan 16, 2026)	US$ 701.40 Billion	11 months import cover	RBI
Total Exports — Goods + Services (FY26)	US$ 860.09 Billion	+4.22% YoY	Ministry of Commerce
PE / VC Investments (CY2025)	US$ 60.7 Bn 1,475 deals	+8% / +9% YoY	EY-IVCA Trendbook 2026

Source: MoSPI SAE Feb 2026 RBI DPIIT Ministry of Commerce EY-IVCA Trendbook 2026

Indias Macroeconomic Strengths — Underpinning Healthcare & Pharma Growth

Indias macroeconomic fundamentals provide a highly enabling environment for the healthcare and pharmaceutical sectors. Rising per capita incomes are directly driving demand for better quality healthcare, diagnostics, and medicines. A young and growing population, urbanisation, and changing lifestyle patterns are accelerating the chronic disease burden — creating long-term structural demand for pharmaceutical formulations, CDMOs, and healthcare services.

• Indias public health expenditure has more than doubled in four years, reaching 6.1 Lakh Crore (3.8% of GDP) in FY25 — up from 1.3% of GDP in 2015

• Private Final Consumption Expenditure (PFCE) grew 7.7% in real terms in FY26 — a direct driver of OTC, chronic, and retail pharmaceutical demand

• Gross Fixed Capital Formation growing at 7.1% — sustained investment in healthcare infrastructure, diagnostics, and pharmaceutical manufacturing

• FDI inflows of US$ 94.53 Billion in FY26 (+17%) — healthcare and pharma among the top recipient sectors

• Indias exports crossed US$ 860 Billion in FY26, with pharmaceutical exports forming a significant and growing share

Structural Drivers of Healthcare Growth

Indias healthcare sector is being shaped by multiple converging structural forces — rising disposable incomes, expanding insurance penetration, accelerating digital health adoption, and sustained government investment. Together, these are improving healthcare affordability, accessibility, and the formalisation of care delivery — creating a durable long-term growth platform across all healthcare sub-segments.

Source: MoHFW PRS India PIB (Budget) Grand View Research (Digital Health)

Monthly Per Capita Consumption Expenditure (MPCE) — Rs.

Segment	FY23	FY24	Growth
Rural	Rs.3,773	Rs.4,122	+9.3% YoY
Urban	Rs.6,459	Rs.6,996	+8.3% YoY

Improving MPCE across rural and urban India enhances household affordability for healthcare spending, supporting higher utilisation of medical services, stronger demand for organised healthcare, and deeper penetration across underserved markets. Rural MPCE growth of 9.3% YoY signals an emerging healthcare consumption opportunity beyond urban centres.

Source: PIB HCES 2023-24, MoSPI

1.2 The Indian Pharmaceutical Market

India is the third-largest pharmaceutical market in the world by volume, the pharmacy to much of the developing world, and the source of roughly one in five generic medicines sold anywhere on earth. It is a market built on scale, trust, and affordability — and it is our home market. During FY26 it kept growing in value, even as the number of units sold across the industry barely moved, rising only about 2.7% over the year. Growth was led, as it increasingly is, by chronic and sub-chronic therapies — the medicines people take every day, for years — with cardiac, anti-diabetic, and respiratory segments pulling well ahead of the market.

We dwell on the gap between value growth and volume growth because it is the truest measure of what we achieved this year. In a market that added almost no volume, Windlas grew revenue by 19%. That is the difference between simply riding a market and genuinely outperforming it — and it is not a one-year accident. It is a pattern we have now sustained across thirteen consecutive quarters of record revenue, in good years and hard ones alike.

Therapy-area growth favours our portfolio

Therapy area (FY26 growth)	Growth	Relevance to Windlas
Cardiac	13.6%	Core chronic segment in our CDMO mix
Anti-diabetic	11.3%	Sustained chronic-therapy demand
Respiratory	Above market	Significant Trade Generics presence
Oncology	33%	Fast-growing specialty opportunity
Overall IPM (value)	8-9%	Volume growth modest at 2.7%

Source: IQVIA; industry data; company analysis.

Key Growth Catalysts for Indias Pharmaceutical Industry

Catalyst	Data Point	Relevance
Rising Chronic Disease Burden	25.6% of Indians report cardiovascular ailments (NSO 2025), vs 16.7% in 2017-18	Structural long-term demand driver for chronic therapy formulations
Ageing Demographics	Elderly (60+) to reach 230 Mn by 2036; 1 in 7 Indians will be elderly	Sustained demand for chronic, specialty and geriatric therapies
Expanding Export Opportunity	US$ 31 Bn exports FY26; 34% to USA; 200+ destination countries	Diversified revenue and global market scale- up
Innovation Transition	Biopharma SHAKTI (10,000 Cr); GCC pharma hubs; biosimilar pipeline expansion	Value migration from generics to complex and innovative therapies
Digital Health & AI	India digital health: US$ 14.5 Bn (2024) US$ 107 Bn (2033), CAGR 25%	AI diagnostics, telemedicine, digital dispensing transforming care
Schedule M Consolidation	DCGI enforcement of revised GMP norms; higher compliance barriers	Accelerating consolidation toward larger, compliant CDMO players

Source: NSO India Survey 2025 PIB Grand View Research EY India DCGI

1.3 Healthcare as a Growth Lever

Indias healthcare sector is growing at roughly 10-12% a year, well ahead of mature markets, supported by rising incomes, widening insurance, digital-health adoption, and sustained government investment. Public health expenditure has more than doubled in four years, and successive Union Budgets have continued to prioritise health infrastructure, affordable medicines, and digital delivery. For a company whose business is affordable, quality-assured formulations, these are durable tailwinds.

Government programmes widening access

Scheme	Allocation	Key Milestone / Status	Impact
AB PM-JAY	Rs.9,500 Millions	42 Cr+ Ayushman cards issued; includes citizens 70+ years	Health coverage 5 L per household; 12 Cr+ vulnerable families
NHM	Rs.39,390 Millions	Ongoing — primary, maternal & child health, disease control	Largest public health delivery programme in India
PM-ABHIM	Rs.4,770 Millions	Critical-care capacity expansion; public health infrastructure	Bolstering ICU and emergency health infrastructure
PMBJP	Target: 25,000 stores by Mar 2027	18,000+ Jan Aushadhi Kendras operational (May 2025)	Medicines at 50-80% lower prices; rural & semi-urban access
ABDM	Rs.350 Millions (FY26-27 BE)	7.94% increase YoY; digital health records, telemedicine	Interoperable digital health ecosystem; e-Sanjeevani integration
Bulk Drug Parks	Rs.3,000 Millions (through FY27)	Established to strengthendomestic API manufacturing	Reduce import dependence; lower pharma production costs
Biopharma SHAKTI	Rs.10,000 Millions (5-yr outlay)	Announced in Union Budget FY27	1,000+ clinical trial sites; position India as biopharma hub

Source: PIB Ministry of Health & Family Welfare PRS India Demand for Grants 2026-27

1.4 Contract Development and Manufacturing

There is a quiet but profound shift underway in how medicines get made. More and more, pharmaceutical companies are choosing to focus on what they do best — building brands, reaching patients, shaping clinical strategy — and to entrust the science and craft of developing and manufacturing their products to specialised partners. This is the business we are in, and the tide is flowing strongly in its direction. Indias CDMO market is growing at roughly 7-8% a year and is expected to nearly double over the next decade; and yet India still accounts for only a low-single-digit share of the global market. In that gap between what India is today and what it can become lies a long runway of opportunity — and we intend to be among those who travel it.

In India, this structural shift is being reinforced by regulatory consolidation: as revised Schedule M standards raise the compliance bar, smaller and non-compliant manufacturers are exiting, and quality-led, audit-ready partners are gaining share. We see this consolidation as one of the most durable tailwinds for our business, and one for which our quality systems and compliance track record have prepared us well.

Why India wins in CDMO

Competitive Dimension	Indias Position	Strategic Significance
Regulatory Credibility	650+ USFDA-approved facilities; WHO- GMP, EU-GMP, TGA compliance	Direct access to regulated markets; instils client confidence
Cost Advantage	Manufacturing costs 40% lower than Western counterparts	Drives outsourcing preference; competitive pricing on complex generics
Talent & Scientific Base	Large pool of scientists, pharmacists, engineers at lower cost	Supports R&D-intensive formulation, regulatory filings, analytical work
IP Ownership Model	Indian CDMOs own 99% formulation IP vs Chinese CDMOs (build-to-spec)	Higher value capture; stronger client stickiness; differentiated model
End-to-End Capability	Full lifecycle — development ^ regulatory ^ commercial manufacturing	Meets client preference for integrated, single-partner relationships

Source: IMARC Rx Propellant PIB Scimplify Industry estimates

1.5 Indias Trade Generics Market

Within the pharmaceutical market, trade generics is among the fastest-structurally-expanding segments — driven by affordability, deeper distribution, and the Governments Jan Aushadhi network. The segment is estimated to grow several-fold over the coming years, with the bulk of the opportunity in the smaller towns and rural geographies where access is improving fastest. This is precisely the market our Trade Generics & Institutional vertical is built to serve.

Segment	Market (2024)	Projected (2030)	Share	Growth Driver
Branded Generics	Rs2,084 Bn	Rs3,710 Bn	87%	New launches, price-led growth, chronic penetration
Trade Generics	Rs240 Bn	Rs680 Bn	10%	Jan Aushadhi expansion, affordability, direct distribution
Patented Drugs	Smaller base	Rs155 Bn	3%	Specialty therapies, biosimilars, oncology innovation

Jan Aushadhi Kendra Network — A Structural Tailwind

18,000+ Jan Aushadhi Kendras operational as of May 2025 (target: 25,000 by March 2027). Medicines offered at 5080% lower prices vs branded equivalents. The expansion of this network is expected to significantly enhance access to affordable medicines—driving higher generic medicine volumes, stronger institutional participation, and wider market reach for CDMO players with established trade generics capabilities.

Source: PIB Ministry of Chemicals & Fertilizers UJA Market Reports Industry estimates

1.6 The Opportunity in Patent Expiries

One of the most powerful forces shaping our industry over the coming years is also one of the simplest to understand. A large number of widely used long-protected medicines are losing their patents this decade — one of the biggest such waves the industry has ever seen. When a medicine comes off patent, it opens other companies can finally make their own versions of it. For Windlas, the most immediate and meaningful part of this opportunity is right here at home. As these molecules open in India, Indian pharmaceutical companies race to launch their own generic and complex-generic versions for a vast domestic market — and to do that, they need a development-and- manufacturing partner who can take a product from idea to shelf quickly, at quality, and at scale. That is precisely what we do.

This is precisely where our model earns its place. We develop and own the intellectual property behind the formulations we make; we are deep in complex generics, fixed-dose combinations, and modified-release products; and our customers value the speed and regulatory confidence with which we help them launch. As patent expiries flow through to the domestic market, the breadth and quality of our development pipeline become an increasingly decisive advantage for the brands we serve.

2. Windlas Biotech at a Glance

Windlas Biotech Limited ("the Company") is a prominent player in the Generic Formulations CDMO space, committed to advancing pharmaceutical manufacturing through a strong emphasis on quality, operational excellence, and affordability. The Company partners with leading pharmaceutical organizations by providing end-to-end solutions across formulation development, licensing, and commercial manufacturing.

Guided by its mission to bridge critical healthcare gaps, Windlas offers a diverse portfolio across chronic and subchronic therapeutic segments, with dosage capabilities spanning Oral Solid Dosage forms, Liquid Dosage forms, and Injectables (Ampoules, Vials, and Lyophilised).

Windlas Biotech Limited is among the Top 5 players in Indias Generic Formulations CDMO industry, committed to delivering Accessible, Affordable and Authentic (AAA) pharmaceutical solutions across the healthcare ecosystem. The Company partners with 8 of the Top 10 Indian pharmaceutical companies, providing formulation development and commercial manufacturing services through its Generic Formulations CDMO vertical, while serving the underserved population of Tier-2 and Tier-3 markets through its Trade Generics & Institutional vertical, and expanding its international footprint through the Exports vertical.

Mission

To serve the unmet healthcare needs of society by accelerating drug research of our customers, by manufacturing high quality products and by creating innovative solutions that improve the affordability of medicines.

Vision

Our vision is to be regarded as a leading partner of choice in the Indian pharmaceutical contract development and manufacturing space. We shall also be recognized as one of the fastest growing generic medicines company with a Pan-India distribution network. With manufacturing facilities approved by regulated and emerging market authorities, we export medicines and health products outside India. We pro-actively invest in research and development and bring to market a portfolio of unique IP protected products that add lasting value to the under-served patients

2.1 The Year in Numbers

* Excluding the impact of non-cash ESOP expense of 166 Millions

3. Financial Review

Numbers are where a companys actions speak most clearly, and we are proud of the ones this year produced. They tell a consistent and, we believe, compelling story: revenue that keeps compounding, margins that keep widening on the measure that matters, cash that keeps building, and a balance sheet strong enough to let us invest in tomorrow and reward our owners today — at the same time.

3.1 Revenue and Profitability

Revenue from operations grew 19% to 9,041 Millions — our highest ever, and our thirteenth consecutive quarterly record along the way. Adjusted EBITDA — before the non-cash ESOP expense we describe below — rose 26% to 1,214 Millions, lifting the adjusted EBITDA margin to 13.4% from 12.7%, and adjusted profit after tax reached 831 Millions, a margin of 9.2%. On a reported basis, after that non-cash ESOP expense, EBITDA was 1,047 Millions and profit after tax 665 Millions. The shape of these numbers is the shape of a business steadily becoming more valuable as it grows.

Five-year financial summary ( Millions)

Particulars	FY22	FY23	FY24	FY25	FY26
Revenue from Operations	4,659	5,131	6,310	7,599	9,041
Gross Margin	1,631	1,876	2,348	2,880	3,469
Gross Margin %	35.0%	36.6%	37.2%	37.9%	38.4%
EBITDA (excl. ESOP)	542	612	802	966	1,214
EBITDA (excl. ESOP) %	11.6%	11.9%	12.7%	12.7%	13.4%
Reported EBITDA	524	602	782	941	1,047
Reported EBITDA Margin%	11.3%	11.7%	12.4%	12.4%	11.6%
Profit for the year (excl. ESOP)	399	436	603	635	831
Profit for the year (excl. ESOP)%	8.6%	8.5%	9.5%	8.4%	9.2%
Reported PAT	381	426	582	610	665
Reported PAT Margin%	8.2%	8.3%	9.2%	8.0%	7.4%
EPS (	18.58	19.70	27.97	29.19	31.60

3.2 Cash, Returns, and the Balance Sheet

The Company generated 1,049 Millions of cash from operations, this step-up in operating cash generation is more than a financial metric; it validates the structural quality of the business model. It signals that revenue growth is translating into real, distributable earnings rather than merely accrual-based profits.

We ended the year, net debt-free with 2,507 Millions of liquidity at the ready. Our return on capital employed (Excluding CWIP) was 32% and our return on equity (Excluding CWIP) 29%, comfortably above what that capital costs us. And an A+ / Stable rating from ICRA says, in an independent voice, what our own numbers say: this is a balance sheet built to weather anything and to seize what comes.

Measure (FY26)	Value	Read-through
Cash from operations	Rs1,049 Millions	High-quality, cash-backed earnings
Net liquidity	Rs2,507 Millions	Funds growth without leverage
ROCE / ROE (ex-CWIP)	32% / 29%	Returns well above cost of capital
Credit rating	A+ / Stable	Independent validation of balance sheet

3.3 Rewarding Shareholders

A companys true regard for its shareholders shows not in what it says but in what it returns. During the current financial year 2027, we bought back 4,70,000 shares at 1,000 each, returning 470 Millions to shareholders — and, tellingly, the promoters chose not to participate, so that the entire benefit flowed to public shareholders and the act stood as a plain statement of the Boards belief in the value of this company.

On top of that, the Board has proposed a dividend of 6.30 per share for FY26, in keeping with our aim of paying out close to a fifth of our profits each year. That we can invest in our growth, buy back our shares, and pay a dividend all at once is, to us, the clearest proof of the financial discipline on which this whole company is built.

4. The Three Business Verticals

One of the things we are quietly proud of is how balanced our company has become. We do not lean on any single product, customer, or market. Instead we grow on three engines, each drawing on the same shared foundation of formulation science, quality systems, and manufacturing scale — and in FY26, revenue mix was well balanced: The Generic Formulations CDMO vertical contributed 73% of revenue, Trade Generics & Institutional 22%, and Exports 5%; together they tell the story of a business diversified by design, not by accident.

Vertical	FY26 Revenue	Growth	Share	Defining metric
Generic Formulations CDMO	Rs6,637 Millions	+20%	73%	926 customers; 8 of Top 10
Trade Generics & Institutional	Rs1,946 Millions	+ 13%	22%	546 brands; 1,582 stockists
Exports	Rs458 Millions	+40%	5%	67 products; 10 countries
Total	Rs9,041 Millions	+ 19%	100%

Internal Strengths — How Windlas Acquires and Retains Clients

Strength	How It Creates Client Value
IP-First Development Model	Almost all products developed with full in-house IP; clients get proprietary, protected formulations
Complex Generic Expertise	FDCs, modified-release, customised generics, novel formats—capabilities most smaller CDMOs cannot offer
Quality & Compliance Track Record	WHO-GMP across 5 plants; 250 QC staff; eQMS
Responsiveness & Turnaround	High internal agility; quick development and manufacturing cycles, critical for launch timelines
Regulatory Support	End-to-end dossier preparation, product registration support, regulatory affairs across domestic and export markets

4.1 Generic Formulations CDMO

Our CDMO vertical grew 20% to 6,637 Millions in FY26 — its highest revenue ever — and behind that number is something we treasure: trust, at scale. We served 926 customers during the year, a number that has grown by roughly a third every year since FY22, and they include 8 of the top 10 pharmaceutical companies in India. These are the most discerning buyers in the market, and they keep choosing us. Just as importantly, the work itself is getting more sophisticated: complex generics rose to 74% of our CDMO mix, from 67% a year earlier, as more of what we make moves toward the harder, higher-value products that fewer companies can deliver.

The most important quality-of-business development in this vertical is one that does not show up in the revenue line: the steady reduction in customer concentration. As our customer base has broadened, our dependence on any single relationship has fallen sharply. The contribution of our top ten customers has declined from 52% of revenue in FY22 to 32% in FY26. This is the deliberate result of broadening our base and deepening wallet share—and it makes the business materially more resilient.

4.2 Trade Generics & Institutional

The Trade Generics & Institutional vertical delivers affordable, high-quality off-patent formulations directly to stockists, distributors, and institutional buyers, reaching deep into the smaller towns and rural districts. The Company pursues a multi-pronged growth strategy encompassing channel development, product diversification, and geographic reach, with a strategic umbrella branding initiative across villages and semi-urban markets.

This vertical grew 13% to 1,946 Millions in FY26, carried by a portfolio of 546 brands and a network of 1,582 stockists and distributors across 29 states. As India widens access to affordable medicine — not least through the Governments expanding Jan Aushadhi network — a vertical built for exactly this purpose is positioned to keep growing for years to come.

4.3 Exports

The Exports vertical delivered its strongest performance in FY26, growing 40% YoY to 458 Millions. Given the longer lead times associated with export markets, we view this as an encouraging validation of efforts towards regulatory approvals and product registrations over the past few years. The focus remains on emerging and semi-regulated markets where the Companys WHO-GMP compliance provides a competitive entry advantage.

5. Manufacturing and Capacity

The strength of our business lies in our manufacturing capabilities. We operate five manufacturing facilities in Dehradun — all WHO-GMP compliant and ready for the stricter Schedule M standards now reshaping our industry — spanning oral solids, liquids, and injectables. This year we ran them harder and smarter: capacity utilisation rose to 66%, from 59% a year earlier. Our gross block of fixed assets stood at 4,262 Millions at year-end, up from 3,512 millions, the mark of a capital programme that is ambitious but always disciplined.

Our manufacturing platform (FY26)

Plant	Commissioned	Capability	Note
Plant 1	2001	Oral solids; liquids; pouches & sachets	Established base capacity
Plant 2	2014	Large-scale oral solids; liquids; sachets	Includes P-2 extension (FY25)
Plant 3	2018	Oral solids — tablets & capsules	Commenced operations in 2018
Plant 4	2009	Oral solids — tablets, capsules, sachets	Philippines GMP in FY26
Plant 5	2024	Injectables — ampoules, vials, lyophilised	Philippines GMP in FY26
Plant 6	In progress	Oral solids (brownfield, Selaqui)	Mechanical completion achieved; commercialisation on track H1 FY27

Our Injectables and Plant-2 Extension facilities continue to fuel overall business growth, demonstrating the strength of our strategic investments and expansion initiatives. Meanwhile, Plant-6 has achieved mechanical completion, and we remain on track for commercialization in the first half of FY27.

6. Research and Development

Windlas Biotech operates a DSIR-approved, state-of-the-art R&D centre equipped with pilot-scale facilities, supporting end-to-end pharmaceutical formulation development. The R&D team comprises experienced professionals across formulation development, analytical chemistry, medical affairs, and regulatory functions. With a strategic focus on developing low-cost, first-to-launch generic products — particularly complex generics, fixed-dose combinations, and modified-release formulations — the Company continues to build a differentiated portfolio aligned with high-growth chronic and sub-chronic therapy segments. Over the years we have built a library of 4,393 complex-generic variations — a quiet store of competitive advantage, complex generics now represent 74% of our CDMO product mix. This year we increased our investment in R&D by about a third, to 83 Millions.

Portfolio by complex-generic type

Category	Share of mix	Why it matters
Modified-release formulations	34%	Highest IP protection and regulatory barriers
Fixed-dose combinations	28%	Clinically differentiated; highly sticky with clients
Customised generics	10%	Client- and patient-specific; deep integration
Novel dosage forms	2%	Chewables, dispersibles — compliance innovation
Plain oral solids	26%	Efficient capacity utilisation; commercial base

7. Quality, Health, Safety & Environment

7.1 Quality and Compliance

In our business, quality is not a department — it is the whole promise. A pharmaceutical company that entrusts its brand to us is, in effect, lending us its good name, and that is a trust we refuse to risk. So we have chosen to be uncompromising here. Every one of our five facilities runs on an electronic quality management system (eQMS), and we maintain complete transparency and regularly undergo audits by our customers, including leading multinational and Indian pharmaceutical companies with rigorous quality standards. This year we grew our quality team to 250 professionals, up from 177. As the industry consolidates under stricter Schedule M standards, quality is evolving from a regulatory obligation into a durable moat—one that protects customer trust and positions us for sustained growth.

7.2 People

Behind every number in this report are the 1,385 people who make Windlas what it is, and our most important investment is in them, human capital is a key driver of our operational excellence. We further augmented our workforce through contract personnel supplied by third-party agencies, with engagement levels varying in response to project requirements. We invest continually in their technical, quality, and leadership skills, regular training program and — through our employee stock ownership plans (ESOP-2021, ESOS-2023 and ESOP-2025)— we have handed a genuine stake in this company to key talents who steer it day to day, so that they build their own futures as they build yours.

7.3 Health, Safety, and Environment

We keep lowering the environmental footprint of our operations through energy-efficient utilities, briquette-fired boilers, rainwater harvesting, and emission controls, and we back our people with comprehensive fire-safety infrastructure and regular safety training across every site. A business built to last must be built responsibly — and that is the only way we know how to build.

• Eco-friendly briquette-fired boilers and energy-efficient utilities lowering carbon footprint across manufacturing sites

• Rainwater harvesting systems operational at multiple facilities

• Advanced fuming hoods with multi-stage filtration controlling volatile organic compound emissions

• Comprehensive fire-safety infrastructure across all facilities

• Regular training programmes on PPE usage, safety awareness, emergency protocols, and HSSE best practices

8. What Sets Us Apart

Many companies claim to be different; far fewer can show you why. We would rather show than tell, so here are the handful of structural strengths on which our competitive position truly rests — each one backed not by adjectives, but by evidence.

• A focused, IP-owning model. We own the intellectual property almost all of our products and operate entirely in higher-value formulations. This is the source of both our gross margin and our customer stickiness.

• Diversified Customer Base and Strong Customer Relationships. The Companys customer-centric approach, coupled with its focus on quality and reliability, continues to drive sustained business growth. Windlas serves 926 CDMO customers, including 8 of the Top 10 Indian pharmaceutical companies, supported by long-standing relationships with leading pharmaceutical companies. Reflecting this breadth, Top-10 customer concentration has fallen from 52% in FY22 to 32% in FY26. Its diversified customer portfolio mitigates concentration risk while creating opportunities for deeper wallet share and long-term partnerships.

• Advanced Manufacturing Infrastructure and Capacity Expansion. A key differentiator is Windlass network of five WHO-GMP-compliant facilities in Dehradun, supported by an eQMS and 250 quality-control professionals (up from 177 in FY25). Continuous investments in capacity expansion, modernisation and process automation have strengthened manufacturing flexibility across oral solids, liquids and injectable formulations.

• Research and Development. Supported by a DSIR-recognised R&D centre and a team of experienced formulation specialists, Windlas focuses on developing differentiated and complex generic formulations, novel dosage formats and value-added products. Company has built 4,393 complex- generic variations, with complex generics now 74% of the CDMO product mix (up from 67% in FY25); FY26 R&D spend rose 32% YoY to 83 Millions.

• Diversified and Value-Added Product Portfolio. Windlas has built a well- diversified portfolio spanning chronic, sub-chronic and acute therapeutic segments, with 5,644 products served in FY26 and chronic / sub-chronic therapies forming 53% of the CDMO mix, and a focus on complex generics, fixed-dose combinations, modified-release formulations, chewables, dispersibles and injectables that enhances competitive positioning and creates opportunities for higher-value business.

• Extensive Distribution Network and Market Reach. The Trade Generics & Institutional business is supported by a network of 1,582 stockists and distributors across 29 states and a portfolio of 546 brands, giving it deep penetration across semi-urban and rural India. Its commitment to Accessible, Affordable and Authentic medicines, coupled with strong institutional and government-programme relationships, has expanded reach.

• Financial Discipline and Balance Sheet Strength. Strong cash generation, prudent capital allocation, healthy liquidity and efficient working-capital management provide the flexibility to pursue growth while maintaining a resilient balance sheet. The Company is net debt-free with 2,507 Millions of net liquidity, generated 1,049 Millions of operating cash flow in FY26 and delivered ROCE of 32% and ROE of 29% (ex-CWIP); holding an A+ / Stable ICRA rating. This financial strength supports ongoing investment in capacity, technology, product development and market expansion.

• Experienced Leadership and Organisational Excellence. Backed by experienced leadership, robust governance and a skilled workforce of 1,385 employees, and an ESOP programme covering key talents that aligns leadership incentives with long-term value creation, Windlas Biotech remains well-positioned to capitalise on emerging opportunities while delivering sustainable long-term value to all stakeholders.

9. Risk Management and Internal Controls

We maintain a risk-management framework that identifies, assesses, and mitigates the principal risks to the business, supported by a risk-based internal audit programme, senior-management review, and Audit Committee oversight. We set out below the risks we consider most relevant, together with how we manage them.

Risk	Nature	Mitigation
Industry Risk	Macroeconomic trends, regulatory changes, geopolitical factors	Continuous monitoring; agile responses; revenue diversification across three verticals and multiple geographies
Operational Risk	Manufacturing disruptions, cGMP compliance, quality failures	Strict cGMP adherence; eQMS and LI MS; annual client audits providing external validation
Competition Risk	Domestic and international CDMO competition; pricing pressure	Economies of scale, strong customer partnerships, and R&D-driven efficiency improvements
Supplier Risk	API price volatility, supply chain disruptions	Diversified multi-geography supplier network; dual sourcing for critical APIs
Financial Risk	Foreign exchange volatility on export revenues	Framework to mitigate the impact of such fluctuations on our financial performance and hedging strategy.
Regulatory & Product- Compliance Risk	Regulatory action on specific product categories and tightening inspection norms and Schedule M compliance	Proactive quality and compliance systems; diversification of the product portfolio and continued Schedule M-readiness investments across all facilities

Internal Financial Controls & Internal Control Systems

The Company maintains a strong internal controls and internal financial controls framework to ensure compliance, operational efficiency, asset safeguarding, and reliable financial reporting. These controls are periodically reviewed to assess their adequacy and effectiveness in line with the scale and complexity of operations.

An automated compliance management system is used to monitor and manage regulatory requirements. Compliance documents are centrally maintained and verified by management, with quarterly compliance certifications submitted to the Board and an annual independent audit providing additional assurance.

Internal audits are carried out through a combination of an in-house internal audit team and Deloitte Haskins & Sells. The Audit Committee oversees the internal control environment and reviews key findings from both internal and external audits, ensuring timely action on observations and continuous improvement in governance practices.

The internal financial controls frame works upports accurate financial reporting and compliance with applicable accounting standards, strengthening the integrity and reliability of financial statements.

10. Key Financial Ratios

Details of significant changes (i.e., variations of 25% or more as compared to the immediately preceding financial year) in key financial ratios, along with explanations thereof:

Ratio	FY26	FY25	Change	Reasons for Significant Change
1 Debtors Turnover Ratio	4.59	5.01	-8.69%	-
2 Inventory Turnover Ratio	7.78	6.57	18.28%	-
3 Interest Coverage Ratio	0.07	0.07	-	-
4 Current Ratio	1.95	2.11	-7.20%	-
5 Debt Equity Ratio	0.05	0.05	0.00%	-
6 Operating Profit Margin (%)	11.6%	12.4%	-0.8 bps	-
7 Net Profit Margin (%)	7.35%	7.98%	-0.53 bps	-
8 Return on Net Worth (%)	12.23%	12.69%	-0.46 bps	-

11. Cautionary Statement

The Management Discussion and Analysis contains forward-looking statements, identified by words like plans, expects, will, anticipates, believes, intends, projects, estimates and on within the meaning of applicable securities laws and regulations concerning WBLs future business prospects and business profitability. All statements that address expectations or projections about the future, the Companys strategy for growth, product development, market position, expenditures and financial results, are forward-looking statements. All these prospects are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, ability to manage growth, competition (both domestic and international), economic growth in India and the target countries worldwide, ability to attract and retain highly skilled professionals, time and cost overruns on contracts, ability to manage international operations, Government policies and actions with respect to investments, fiscal deficits, regulations, interest and other fiscal costs generally prevailing in the economy, etc. Past performance may not be indicative of future performance. The Company does not undertake to make any announcement in case any of these forward-looking statements become materially incorrect in future nor shall the Company update any forward-looking statements made from time to time by or on its behalf.