Hindustan Laboratories IPO

Strengths · 7

• 01Revenue from operations rose from Rs 172.34 crore in FY2023 to Rs 186.37 crore in FY2024 and Rs 219.75 crore in FY2025, and profit after tax rose from Rs 22.25 crore to Rs 41.27 crore over the same period.
• 02EBITDA margin was 24.52% and PAT margin was 18.78% in FY2025, against 17.81% and 12.91% in FY2023.
• 03Debt is low. Total borrowings were Rs 6.79 crore on 31 March 2025 against a net worth of Rs 178.74 crore, and the debt to equity ratio was 0.06.
• 04Return ratios were high in FY2025: return on net worth was 26.11% and return on capital employed was 33.13%.
• 05The product list grew from 661 products on 31 March 2023 to 948 on 30 September 2025, which gives the company more items to bid for in each tender.
• 06The company won 22 of the 28 bids announced in the six months ended 30 September 2025, a win ratio of 78.57%, up from 63.95% in FY2025.
• 07Supply covers 27 states and Union Territories, and private customers gave Rs 20.14 crore (9.17%) of FY2025 revenue, up from Rs 0.36 crore in FY2023.

Risks · 10

• 01Government customers gave 89.93% of revenue in the six months ended 30 September 2025. Tenders are won one at a time and are not renewed automatically.
• 02Customers are concentrated. The top 10 customers gave 61.08% of FY2025 revenue and 65.43% in the first half of FY2026, and the largest customer alone gave 20.90% in the first half of FY2026.
• 03Cash flow lags profit. Operating cash flow was Rs 10.77 crore in FY2025 against a profit after tax of Rs 41.27 crore, because trade receivables rose by Rs 19.00 crore.
• 04Collection is slowing. Debtor days rose from 92 in FY2024 to 97 in FY2025 and 124 in the six months ended 30 September 2025, and net working capital days rose from 52 in FY2023 to 133.
• 05All production is at one plant in Palghar. Unit 2 has not started production, and tablet capacity utilisation was 53.24% in FY2025 and 22.22% in the first half of FY2026.
• 06The offer includes an offer for sale of up to 91,00,000 shares by the promoter, and the promoter's weighted average cost of acquisition is Rs 10 per share. The company gets no money from this part.
• 07The only named object is Rs 72.50 crore for working capital. The general corporate purposes amount is not yet fixed and can be up to 25% of the gross proceeds.
• 08The company and promoters face legal cases. There is 1 criminal case and 2 tax cases against the company (Rs 1.07 crore, quantifiable part), and 6 criminal cases and 1 material civil case (Rs 2.00 crore) against the promoters.
• 09Related-party dealings are large. Promoter Rajesh Doshi gave the company loans of Rs 24.91 crore in FY2025, and the company pays rent to the promoter, his family and his HUF for its offices.
• 10Bank guarantees against tenders were Rs 32.84 crore on 30 September 2025, and the company has to keep earnest money and performance deposits of 3% to 5% of contract value for tenders.

Hindustan Laboratories Limited is a Mumbai-based pharmaceutical company that makes generic medicines in bulk and supplies them to government institutions. These are medicines whose patents have expired. The company calls this a business-to-government (B2G) model. It wins supply contracts through tenders from central government bodies under the Ministry of Health and Family Welfare and from state government agencies. Its products carry its own logo and are sold either under brand names or generic names, depending on what the buyer asks for.

Government customers gave 98.14% of revenue in FY2024, 90.83% in FY2025 and 89.93% in the six months ended 30 September 2025. State agencies are the larger part: they gave 67.76% of revenue in FY2025, while central agencies gave 23.07%. Private customers have grown from 0.21% of revenue in FY2023 to 9.17% in FY2025. The company supplied to 27 states and Union Territories in FY2025 and in the first half of FY2026. It won 55 of the bids whose results were announced in FY2025, a win ratio of 63.95%.

The product list has grown from 661 products on 31 March 2023 to 871 on 31 March 2025 and 948 on 30 September 2025. Therapeutic areas with the most revenue in FY2025 were vitamin supplements (20.59%), blood-related products (13.08%) and nutritional and mineral supplements (6.65%). Tablets are the main product: the plant has an installed capacity of 9,500 million tablets, and it made 5,057.39 million in FY2025, a utilisation of 53.24%.

All manufacturing is at one site in Palghar, Maharashtra, about 100 km from Mumbai. The company is adding a Unit 2 there, which is under commissioning and has not started production. Unit 2 is expected to have an installed capacity of 2500 million tablets, 30 million external liquid units, 50 million ointment units and 17.50 million creams. The company also holds a cosmetics licence from the Maharashtra Food and Drugs Administration, issued on 27 May 2025, and plans to bid for government tenders in products such as hand wash, shampoo and sunscreen lotion. The company had 616 employees working in its manufacturing facilities on 30 September 2025.

The company does not own its premises. The registered office, the corporate offices and the manufacturing facility are all leased, and some are leased from the promoter and his family HUF. The company was incorporated on 14 June 2017 and is promoted by Rajesh Vasantray Doshi, Kunjal C Dedhia and Krishiv Rajesh Doshi.

The industry

The industry report by CARE says India's pharmaceutical sector grew at an 8% CAGR from FY20 to touch USD 58 billion in FY25, and is expected to grow at a 12% CAGR to USD 100 billion by FY30. India ranks 3rd in the world by volume and 14th by value, because generics make up around 70% of industry revenue and are priced low. The industry is fragmented, with over 10,000 manufacturers. The report also says growth is expected to moderate because of rising competition and oversupply in generics. Hindustan Laboratories sits in the government-supply (B2G) part of this market, where buyers choose suppliers through tenders.

Customer concentration: Top 10 customers gave 61.08% of FY2025 revenue (57.61% in FY2024) and 65.43% in the six months ended 30 September 2025. The largest customer gave 13.38% in FY2025.