Synopsis: Windlas Biotech fell 6% after receiving an FSDA show-cause notice, leading to the temporary suspension of its codeine-based cough syrup manufacturing. The affected segment contributed Rs 55.21 crore this fiscal. While Q3 revenue rose 19% YoY, profit remained flat, and regulatory uncertainty weighed on investor sentiment.
The shares of this company, which is a leading domestic pharmaceutical formulations contract development and manufacturing organisation (CDMO) and manufactures both solid and liquid pharmaceutical dosage forms and more, had its shares in the news following the FSDA show cause notice regarding its cough syrup containing codeine.
With the market cap of Rs 1,700 crore, the shares of Windlas Biotech Ltd have fallen about 6% and reached a low at Rs 803, compared to their previous day’s closing price of Rs 851.05. The shares are trading at a PE of 25.4, whereas its industry PE is at 29.6. The shares have given a return of more than 100% since their listing in August 2021.
About the FSDA notice
Windlas Biotech Limited has received a Show Cause Notice from the Food Safety & Drug Administration (Uttarakhand). This has resulted in a temporary halt in the production of its cough syrup containing codeine. However, since Windlas Biotech Limited has started preparing its response to this notice within the given time period, it can be concluded that this is not a concluded case.
The product segment, which has been affected, contributes to the revenue for the company in the current financial year till February 9, 2026, and the amount is Rs 55.21 crore. There is revenue uncertainty, but the operations are not affected since the product segment affected is codeine-based cough syrups.
Importantly, the production of other products will continue as usual, which will limit the chances of a bigger system failure. The financial impact will, therefore, be determined by how the authorities will respond with regulations and how long the suspension will last, but for now, the situation seems under control.
Financials
The revenue from operations for the company stood at Rs 233 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 195 crores, up by about 19 per cent YoY. However, the net profit stood at Rs 15 crore in Q3 FY26, down compared to the Rs 16 crore profit in Q3 FY25.
The company reported all-round growth across verticals in Q3FY26. The revenue for Generic Formulations CDMO was the leader, with revenue rising to Rs 167 crore from Rs 136 crore in Q3FY25, up 23% YoY, reflecting healthy demand momentum and improved execution in the core manufacturing business.
Within this, the Trade Generals & Institutional segment grew moderately to Rs 53 crore from Rs 50 crore, up 7% YoY. The fastest growth percentage was witnessed in the Exports segment, which surged to Rs 13 crore from Rs 10 crore, representing a sharp 36% YoY jump. Overall, revenue growth in Q3 has come from strength in CDMO, coupled with improving traction in export markets.
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