🟢 1. At a Glance
Wanbury Ltd is a ₹874 Cr microcap pharma player with sky-high ROE (70%), improving margins, and a breakout FY25 performance. But beneath that profitable pill lies some bitter aftertaste—76% promoter pledge, low interest cover, and a history of financial volatility. Is this finally the turnaround… or another placebo rally?
🧪 2. Hook – “Debt, Drama, and a Dose of Iron”
Let’s face it: Wanbury has been a pharma penny stock refugee for a decade. And now it’s suddenly showing signs of life?
The company recently launched Wanbury C RED, a next-gen iron supplement. It posted ₹31 Cr PAT in FY25 (vs ₹-10 Cr in FY23), OPM hit 13%, and FY25 EPS surged to ₹9.32.
But this isn’t just about pills. It’s also about fines for audit delays, promoter pledging, and shady other income swings.
So, what changed?
🧬 3. WTF Do They Even Do?
Wanbury operates in two key segments:
💊 1. APIs (Active Pharmaceutical Ingredients)
- Serves 50+ countries
- Focus on Metformin, Tramadol, Salsalate
- Major export-driven biz
💉 2. Formulations (Domestic Branded Generics)
- Pan-India sales team
- Focused on therapies like:
- Iron deficiency
- CNS (painkillers)
- Cardiovascular & diabetology
- Recent expansion via Wanbury C RED (iron + Vit C combo)
🧪 They also emphasize R&D, but no proprietary blockbuster drug yet.
📊 4. Financials – Profit, Margins, ROE, Growth
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 392 | 511 | 485 | 557 | 600 |
| Net Profit (₹ Cr) | -13 | 81 | -10 | 56 | 31 |
| OPM (%) | 5% | 7% | 5% | 13% | 13% |
| ROCE (%) | 27% | 46% | 21% | 61% | 35% |
| ROE (%) | – | 70% | – | 61% | 70% 😵 |
| EPS (₹) | -5.04 | 24.94 | -3.18 | 17.09 | 9.32 |
🧠 TL;DR:
- FY23 was a one-off write-down + weak quarter
- FY24 & FY25 show clear margin expansion
- ROE is high due to tiny equity + leverage boost
💸 5. Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| P/E (TTM) | 28.6x |
| P/B | 14.9x (!) |
| Market Cap | ₹874 Cr |
| Book Value | ₹18.1 |
| ROE | 70% (!!) |
📊 Fair Value Estimate:
Let’s assume:
- FY26 EPS: ₹11 (10% growth)
- Apply conservative 18x–25x range
🎯 Fair Value Range: ₹200 – ₹275
Current Price: ₹269
👀 Already near upper range → Market is pricing in the turnaround
⚙️ 6. What’s Cooking – News, Triggers, Drama
🔥 Positives:
- New product: Wanbury C RED launched in 2025
- Export demand: API segment seeing global traction
- EPS revival: After a volatile decade, profits are consistent
⚠️ Concerns:
- 30 May 2025: Secretarial compliance report flagged board composition issues, promoter shares not fully dematerialized
- ESOP dilution ongoing: 2.74 lakh granted, 1.06 lakh shares allotted
- High dependence on “other income” in multiple quarters
💰 7. Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Equity | ₹33 Cr |
| Reserves | ₹26 Cr |
| Borrowings | ₹177 Cr |
| Other Liabilities | ₹178 Cr |
| Total Assets | ₹414 Cr |
📌 D/E ratio > 2x
📉 Debt still a concern → they cleaned up some, but it’s not gone
💵 8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY23 | ₹20 Cr | -₹9 Cr | -₹32 Cr | -₹21 Cr |
| FY24 | ₹4 Cr | -₹17 Cr | ₹15 Cr | ₹2 Cr |
| FY25 | ₹26 Cr | -₹51 Cr | ₹26 Cr | ₹1 Cr |
🧠 Cash flows erratic. FY25 had high capex (possibly R&D, formulation scaling)
📉 9. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROCE | 35% |
| ROE | 70% |
| OPM | 13% |
| Interest Cover | < 2x (🚨 low) |
| Promoter Pledge | 76.7% (🛑) |
| Debtor Days | 70 |
| Inventory Days | 47 |
| Payable Days | 172 |
⚠️ ROEs impressive but juice is from leverage, not operational excellence
📈 10. P&L Breakdown – Show Me the Money
| FY | Revenue | EBITDA | PAT | EPS |
|---|---|---|---|---|
| 2023 | ₹485 Cr | ₹26 Cr | -₹10 Cr | -₹3.18 |
| 2024 | ₹557 Cr | ₹73 Cr | ₹56 Cr | ₹17.09 |
| 2025 | ₹600 Cr | ₹76 Cr | ₹31 Cr | ₹9.32 |
🧠 FY24 was a sweet spot. FY25 had better ops but lower net due to higher interest & lower other income.
🧪 11. Peer Comparison – Who Else in the Game?
| Company | P/E | ROE | ROCE | Rev (₹ Cr) | OPM | Mcap (₹ Cr) |
|---|---|---|---|---|---|---|
| Sun Pharma | 35x | 17% | 20% | 52,578 | 29% | ₹4.0 L Cr |
| Cipla | 23x | 18% | 23% | 27,548 | 26% | ₹1.2 L Cr |
| Zydus | 21x | 21% | 24% | 23,241 | 30% | ₹98K Cr |
| Wanbury | 29x | 70% | 35% | 600 | 13% | ₹874 Cr |
📌 Wanbury’s valuation is in the big league… but revenue size is 1/50th
👨💼 12. Shareholding – Promoters & the Pledge Trap
| Group | Jun 2022 | Mar 2025 |
|---|---|---|
| Promoters | 39.85% → 39.76% | |
| Pledge | 76.7% (🚨) | |
| FIIs | 0% → 1.55% ✅ | |
| Public | 60.2% → 58.7% |
🔻 No dilution, but no promoter buying either
🔐 76.7% of promoter stake is pledged = danger zone
🧑⚖️ 13. EduInvesting Verdict™
Wanbury Ltd is giving classic “turnaround” energy – improving margins, new launches, strong ROE, and consistent profit.
But this ain’t your clean-cut pharma play:
- Promoter pledge = 76.7%
- Interest coverage still weak
- Other income swings + low cash conversion
The market is already pricing in a lot. For it to go from ₹269 → ₹500+, Wanbury will need to clean the balance sheet, reduce debt, and prove FY25 wasn’t a fluke.
🎯 Fair Value Range: ₹200 – ₹275
✍️ Written by Prashant | 📅 09 July 2025
Tags: Wanbury, pharma microcap, API exporter, high ROE stock, promoter pledge, turnaround pharma, EduInvesting, Wanbury C RED
