Below is quote on Windlas biotech or Krisnaa diagnostic IPO by Mr. Yash Gupta, Equity Research Associate, Angel Broking Ltd
Which pharmaceutical sector IPO is better to apply for, Is it Windlas biotech or Krisnaa diagnostic?
Both the IPO opens on 4th August and will close on 6th August 2021. Windlas biotech is engaged in the business of CDMO, domestic generic, and export business. CDMO accounts for 85% of the top line in FY2021 and CDMO business is high margin business along with having good potential to grow in India in the near future. On other side Krisnaa diagnostic is in the business of public private partnership (“PPP”) diagnostics segment, 67% of companies revenue comes from public health agencies, which is a low-margin business.
On the valuation side, Windlas biotech IPO is priced at adjusted PE levels of 22.2x and Krisnaa diagnostic IPO priced at PE levels of 77.9x. Krishnaa has a weak balance sheet with a negative net worth in FY2020 and on the other side windlass has a strong balance sheet with almost zero debt after the IPO.
So overall we believe Windlas biotech has more potential than Krishnaa diagnostic in long term. We have a subscribe rating to Windlas biotech and we expect the company to list with listing gains of 12%-20%.
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