Windlas Biotech Ltd Valuation Shifts to Attractive Amid Sector Challenges

Valuation Metrics Reflect Improved Price Attractiveness

As of 26 Feb 2026, Windlas Biotech’s P/E ratio stands at 23.86, a figure that positions the company favourably against its peer group, many of whom trade at significantly higher multiples. For instance, Ajanta Pharma and Emcure Pharma command P/E ratios of 37.09 and 29.86 respectively, while J B Chemicals & Pharmaceuticals and Sai Life Sciences are priced at very expensive levels with P/E multiples exceeding 44 and 57.7. This relative discount in valuation suggests that Windlas Biotech’s shares are trading at a more reasonable price relative to earnings potential.

Similarly, the company’s price-to-book value ratio of 2.98 is modest compared to sector heavyweights such as Gland Pharma and Wockhardt, which trade at elevated P/BV multiples reflecting their premium market positioning. This lower P/BV ratio indicates that Windlas Biotech’s stock price is more closely aligned with its net asset value, enhancing its appeal to value-conscious investors.

Enterprise value to EBITDA (EV/EBITDA) at 12.98 further underscores the stock’s attractive valuation, especially when juxtaposed with peers like Ajanta Pharma (27.19) and J B Chemicals (29.1). This metric highlights the company’s operational earnings relative to its enterprise value, suggesting a more efficient valuation for Windlas Biotech’s earnings base.

Financial Performance and Quality Metrics Support Valuation

Windlas Biotech’s return on capital employed (ROCE) of 24.60% and return on equity (ROE) of 12.60% reflect robust operational efficiency and shareholder returns. These figures are particularly noteworthy given the company’s mid-cap status and the competitive pressures within the Pharmaceuticals & Biotechnology sector. The dividend yield of 0.76% adds a modest income component, although it remains secondary to growth and valuation considerations.

Despite a PEG ratio of 3.29, which suggests a premium relative to earnings growth, the company’s valuation grade has improved from fair to attractive, signalling that the market may be underestimating its growth prospects or that the current price offers a margin of safety for investors.

Share Price and Market Capitalisation Context

Windlas Biotech’s current share price of ₹755.50 is near its 52-week low of ₹732.60, significantly below the 52-week high of ₹1,137.60. This price contraction has contributed to the improved valuation metrics, as the market adjusts to recent earnings and sector dynamics. The company’s market cap grade remains modest at 3, reflecting its mid-cap status and liquidity profile.

However, the stock’s recent performance has lagged the broader Sensex index, with a one-month return of -3.93% compared to the Sensex’s 0.91%, and a one-year return of -7.96% versus the Sensex’s 10.29%. Over longer horizons, Windlas Biotech has outperformed significantly, delivering a three-year return of 195.06% against the Sensex’s 38.36%, underscoring its potential for sustained growth despite short-term volatility.

Sector Comparison Highlights Relative Value

When analysing Windlas Biotech’s valuation in the context of its Pharmaceuticals & Biotechnology peers, the company emerges as a relatively attractive proposition. Most peers are rated as expensive or very expensive, with P/E ratios ranging from 30 to over 175 in the case of Wockhardt. This premium pricing often reflects larger scale, stronger global presence, or superior growth visibility.

Windlas Biotech’s more moderate multiples suggest that the market is pricing in either a more cautious growth outlook or concerns over competitive pressures. However, the company’s solid ROCE and ROE metrics indicate operational strength that could support multiple expansion if growth accelerates or sector sentiment improves.

Mojo Score and Rating Update

MarketsMOJO’s latest assessment assigns Windlas Biotech a Mojo Score of 42.0 and a Mojo Grade of Sell, downgraded from Hold on 4 Feb 2026. This downgrade reflects a cautious stance driven by recent price declines and sector uncertainties. The score incorporates valuation, financial health, and momentum factors, signalling that while valuation has improved, other parameters warrant prudence.

Investors should weigh this rating against the company’s attractive valuation metrics and long-term growth potential, considering the stock’s recent underperformance relative to the broader market.

Outlook and Investment Considerations

Windlas Biotech’s valuation shift from fair to attractive offers a potential entry point for investors seeking exposure to the Pharmaceuticals & Biotechnology sector at a reasonable price. The company’s operational metrics and relative valuation discount versus peers provide a foundation for upside should earnings growth materialise as expected.

However, the stock’s recent price weakness and the sector’s competitive landscape necessitate a measured approach. Investors should monitor quarterly earnings, regulatory developments, and sector trends closely to gauge momentum and risk factors.

Conclusion: Valuation Recalibration Presents Opportunity Amid Caution

In summary, Windlas Biotech Ltd’s recent valuation parameter changes have enhanced its price attractiveness relative to historical levels and peer averages. The company’s P/E, P/BV, and EV/EBITDA ratios now reflect a more compelling entry point for investors willing to look beyond short-term price volatility and sector challenges.

While the Mojo Grade downgrade to Sell advises caution, the underlying financial metrics and relative valuation discount suggest that Windlas Biotech could reward patient investors if operational momentum improves. As always, a balanced approach considering both valuation and quality factors remains prudent in navigating the Pharmaceuticals & Biotechnology sector’s evolving landscape.

Limited Period Only. Start at Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Get 71% Off →