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🚨 Hyderabad Ayurvedic & Nutraceutical Manufacturer with FY26 Revenue up 105%, PAT up 231% and Own-Brand Mix above 50% coming with SME IPO Himalaya Nutravedics India Limited ♾ IPO 🔹 BSE SME IPO 🔹 100% book-built issue 🔹 100% fresh issue. No OFS 🔹 Face value: ₹10 🔹 Price band: ₹100 – ₹106 🔹 Lot size: 1,200 shares 🔹 Fresh issue: 24,99,600 shares 🔹 Issue size At ₹106: ~₹26.50 cr 🔹 Anchor date: Sep 21 🔹 IPO bidding: Sep 22 - 24 🔹 Allotment: Sep 25 🔹 Listing: Sep 29 🔹 BRLM: Nirbhay Capital Services 🔹 Registrar: KFin Technologies 🔹 Market maker: Allwin Securities ♾ Company 🔹 Incorporated in June 2022, manufacturing operations started in 2022 🔹 Hyderabad-based Ayurvedic + nutraceutical manufacturer 🔹 Business: • Classical/Shastric Ayurvedic formulations • Proprietary Ayurvedic formulations • Nutraceutical supplements • Own branded products • Third-party contract manufacturing 🔹 Dosage forms include: • Softgel capsules • Hardgel capsules • Tablets • Liquid orals • Medicated oils • Protein powders 🔹 Products address areas including: • Gut health • Immunity • Metabolic health • Women's wellness • Fertility • Bone & joint care • Pain management • Paediatric wellness • General wellness 🔹 More than 100 products are marketed across multiple SKUs 🔹 Distribution network spans 17 states 🔹 Mainly follows doctor-centric marketing approach through medical practitioners, distributors and pharmacy channels 🔹 Manufacturing is carried out from a single Hyderabad facility supported by AYUSH + FSSAI licences and WHO-GMP standards ♾ Business transformation 🔹 Historically operated through a mix of own brands + third party manufacturing 🔹 Own-brand contribution increased materially and reached ~51% of FY26 rev 🔹 Company is now planning a larger D2C + digital expansion 🔸 Own brands carry better margins than third-party manufacturing and were one of key drivers behind recent margin expansion 🔹 Proposed channels include: • Own digital platform • E-commerce • Digital marketing • Consumer-focused sales • Wider brand-building 🔸 This is important because D2C is not simply additional sales volume 🔸 It requires cust acquisition, digital advertising, logistics, returns management, technology and brand spending that differ from existing B2B/doctor-led operations ♾ Product concentration Ayurvedic product revenue: 🔹 FY24: ₹11.43 cr / 79.27% 🔹 FY25: ₹19.34 cr / 92.09% 🔹 FY26: ₹40.73 cr / 94.57% Nutraceutical contribution: 🔹 FY24: 20.73% 🔹 FY25: 7.91% 🔹 FY26: 5.43% 🔸 Despite operating in both segments, almost 95% of FY26 rev came from Ayurvedic products 🔸 Business has therefore become more concentrated in Ayurveda rather than diversified across categories ♾ Customer concentration FY26 revenue concentration: 🔹 Largest customer: 36.02% 🔹 Top 3: 56.33% 🔹 Top 5: 65.61% 🔹 Top 10: 81.24% For comparison: 🔹 Top customer: • FY24: 43.02% • FY25: 49.54% • FY26: 36.02% 🔹 Top 10: • FY24: 84.19% • FY25: 86.97% • FY26: 81.24% 🔹 Dependence on single largest customer improved in FY26 🔸 But more than 81% of rev still comes from only 10 cust 🔸 Company does not have long-term contracts with several cust ♾ Supplier concentration FY26 purchases: 🔹 Largest supplier: 62.13% 🔹 Top 3: 75.98% 🔹 Top 5: 84.06% 🔹 Top 10: 94.30% Top 10 supplier dependence: 🔹 FY24: 97.32% 🔹 FY25: 94.84% 🔹 FY26: 94.30% 🔸 Supplier concentration remains extremely high 🔸 Does not have long-term agreements with several key suppliers ♾ Geographic concentration FY26 revenue: 🔹 Kerala: 49.33% 🔹 Gujarat: 13.21% 🔹 Uttar Pradesh: 11.68% 🔹 Telangana: 9.49% 🔹 Andhra Pradesh: 6.25% 🔹 Kerala + Guj + UP contributed ~74.2% of FY26 rev 🔹 Kerala dependence fell from 68.92% in FY25 to 49.33% in FY26 ♾ Manufacturing capacity FY26 utilisation: 🔹 Medicated oils: 90.20% 🔹 Softgel capsules: 63.72% 🔹 Tablets: 17.84% 🔹 Liquid orals: 13.00% 🔹 Protein powder: 10.87% 🔹 Hardgel capsules: 4.25% 🔸 Has significant unused capacity across several manufacturing lines 🔸 Future growth may therefore come partly from better utilisation of existing infrastructure rather than immediately requiring major new manufacturing capacity ♾ IPO money 🔹 Up to ₹13.75 cr: Working-capital requirements 🔹 Up to ₹7.50 cr: Branding, digital marketing + sales expansion 🔹 Balance: GCP 🔹 ₹21.25 cr allocated to working capital + brand/digital expansion ~80% of upper-band gross issue size Working-capital deployment: 🔹 FY27: Up to ₹5 cr 🔹 FY28: Up to ₹8.75 cr Brand/digital/sales deployment: 🔹 FY27: Up to ₹5 cr 🔹 FY28: Up to ₹2.50 cr 🔹 Total estimated working-capital requirement: Up to ₹32.68 cr 🔹 IPO funding towards it: ₹13.75 cr 🔹 Remaining req: ~₹18.93 cr through internal accruals/borrowings ♾ Promoters 🔹 Rohit Asawa 🔹 Divya Asawa 🔹 Chanda Asawa 🔹 Rama Raju Penmatsa 🔹 Promoter holding before IPO: 95.14% 🔹 Based on full fresh issue, est post-IPO holding: ~68.13% 🔸 Dilution comes entirely from new shares issued by company ♾ Financials Revenue from operations: 🔹 FY24: ₹14.43 cr 🔹 FY25: ₹21.00 cr 🔹 FY26: ₹43.07 cr EBITDA: 🔹 FY24: ₹0.94 cr 🔹 FY25: ₹2.99 cr 🔹 FY26: ₹8.10 cr PAT: 🔹 FY24: ₹0.43 cr 🔹 FY25: ₹2.23 cr 🔹 FY26: ₹7.39 cr Net worth: 🔹 FY24: ₹1.34 cr 🔹 FY25: ₹6.75 cr 🔹 FY26: ₹16.38 cr 🔹 FY26 rev growth: ~105% 🔹 FY26 PAT growth: ~231% 🔹 FY24-FY26 rev CAGR: ~73% 🔹 FY24-FY26 PAT CAGR: ~317% 🔸 Recent growth has been extremely fast from a relatively small base ♾ Margins + returns EBITDA margin: 🔹 FY24: 6.48% 🔹 FY25: 14.24% 🔹 FY26: 18.82% PAT margin: 🔹 FY24: 2.95% 🔹 FY25: 10.63% 🔹 FY26: 17.16% ROE: 🔹 FY24: 37.29% 🔹 FY25: 55.02% 🔹 FY26: 63.87% ROCE: 🔹 FY24: 17.00% 🔹 FY25: 30.18% 🔹 FY26: 36.41% Debt/equity: 🔹 FY24: 2.39x 🔹 FY25: 0.26x 🔹 FY26: 0.31x 🔹 FY26 total debt: ~₹5.13 cr 🔹 Outstanding secured borrowings had increased to ~₹5.32 cr by Aug 14, 2026 🔸 Balance-sheet leverage is much lower than FY24, although absolute borrowing remains meaningful relative to company size ♾ Biggest financial watch: cash flow Operating cash flow: 🔹 FY24: -₹0.55 cr 🔹 FY25: -₹1.39 cr 🔹 FY26: -₹3.83 cr PAT: 🔹 FY24: +₹0.43 cr 🔹 FY25: +₹2.23 cr 🔹 FY26: +₹7.39 cr ⚠️ Company generated negative operating cash flow in every reported year despite rapidly rising accounting profits 🔹 FY26 inventory: ~₹8.92 cr 🔹 FY26 trade receivables: ~₹10.59 cr 🔹 Inventory + receivables together were ~₹19.5 Cr. Equivalent to ~45% of FY26 annual rev 🔸 Rapid expansion is absorbing a substantial amount of cash into inventory and customer credit 🔸 Future cash conversion is one of most important numbers to monitor after listing ♾ Tax benefit 🔹 Company is a DPIIT-recognised startup eligible for Section 80-IAC tax deduction 🔹 Benefit was first claimed for FY25 🔹 Eligible to claim benefit for FY26 + FY27, subject to applicable conditions 🔸 Recent PAT therefore benefits from unusually low taxation 🔸 Company itself highlights that after tax holiday expires, applicable income tax could be around 25% plus surcharge and cess under prevailing assumptions 🔸 It estimates post-tax profit could be lower by approximately 28% of corresponding PBT, all else remaining constant ⚠️ Current PAT margin and P/E should not be analysed as if present tax benefit continues indefinitely ♾ Tax proceeding 🔹 Income Tax Department raised a ~₹27.26 lakh demand relating to deduction under Section 80-IAC after delayed filing of Form 10CCB 🔹 Company has disputed demand 🔹 Appeal was filed in March 2026 🔸 Amount is not very large compared with FY26 PAT, but matter is relevant because tax benefit is an important contributor to reported profitability ♾ Trademark watch 🔹 Applications covering existing “Himalaya Nutravedics” corporate wordmark/logo are under opposition proceedings 🔹 Submitted counter-statements and proceedings remain pending 🔹 Pending resolution, company has undertaken not to procure fresh packaging carrying opposed trademark/logo once existing material is exhausted 🔹 Existing finished goods + packing material bearing current mark are expected to be phased out within approximately 6 months from undertaking, or earlier where commercially feasible 🔹 Individual product names are not part of this opposition 🔹 Company has also publicly clarified that it is not associated, affiliated or connected with any other company/business using “Himalaya” name 🔸 This deserves attention because company plans to deploy up to ₹7.5 cr into branding + digital expansion 🔸 Brand transition and major brand-building expenditure are therefore happening at same time ♾ Compliance watch 🔹 Historical corporate filings include several delays Examples: 🔹 MGT-14 filing delay: 1,308 days 🔹 Certain MSME Form I filings delayed by as much as 1,000 days 🔹 Appointed full-time company Secretary/Compliance Officer 🔹 Environmental consent for establishment + consent for operation were also obtained in 2026 after historical delays 🔹 Current environmental approvals are valid ♾ Valuation Price band: ₹100–₹106 Post-issue:~88.06 lakh shares Est post-issue market capitalisation at ₹106: ~₹93.35 cr 🔹 Based on FY26 PAT of ₹7.39 cr: Post-issue EPS: ~₹8.39 Implied post-issue P/E at ₹106: ~12.6x 🔸 This diluted calculation is more useful than simply dividing price by historical pre-issue EPS because fresh issue increases share count materially Peers: 🔹 Jeena Sikho Lifecare 🔹 Sandu Pharmaceuticals 🔸 Peer comparisons require caution because Himalaya Nutravedics is much smaller and differs in own-brand/contract-manufacturing mix, distribution model and tax position 🔸 Upper-band ~12.6x post-issue P/E looks very different once temporary tax benefit + negative operating cash flow are considered alongside headline PAT ♾ Strengths 🔹 FY26 revenue more than doubled 🔹 PAT grew ~231% in FY26 🔹 EBITDA margin expanded from 6.48% to 18.82% in 2 years 🔹 PAT margin expanded from 2.95% to 17.16% 🔹 Own-brand contribution crossed 50% 🔹 ROE: 63.87% 🔹 ROCE: 36.41% 🔹 Debt/equity only 0.31x versus 2.39x in FY24 🔹 Presence across 17 states 🔹 More than 100 products across multiple SKUs 🔹 Existing spare manufacturing capacity can support additional volumes 🔹 100% fresh issue with no OFS 🔹 IPO money directly supports working capital + brand/digital expansion ♾ Watch-outs 🔹 Operating cash flow remained negative in FY24, FY25 and FY26 🔸 Profit growth has not yet translated into operating cash generation 🔹 ₹13.75 cr of IPO money is required for working capital 🔸 Rapid growth is highly cash intensive 🔹 Section 80-IAC tax holiday is temporary 🔸 Current PAT margin should not automatically be extrapolated into later years 🔹 Top 10 customers = 81.24% of revenue 🔸 Customer concentration remains high 🔹 Top 10 suppliers = 94.30% of purchases 🔸 Supplier concentration is even higher 🔹 Ayurvedic products = 94.57% of FY26 revenue 🔸 Product-category concentration is high 🔹 Kerala = 49.33% of FY26 revenue 🔸 Geographic concentration remains significant despite improvement 🔹 D2C + digital business is being expanded aggressively 🔸 Execution will require capabilities and spending beyond existing doctor/B2B-led model 🔹 ₹7.50 cr earmarked for branding + digital marketing + sales expansion 🔸 Return generated from this large brand investment will be important 🔹 Corporate wordmark/logo applications are under opposition 🔸 Brand transition overlaps with IPO-funded marketing expansion 🔹 Several manufacturing lines have low utilisation 🔸 Higher demand is required to efficiently use available capacity 🔹 Historical statutory filing delays 🔸 Listed-company compliance standards will be materially stricter 🔹 Single manufacturing facility 🔸 Any major disruption at Hyderabad facility can affect entire production base ♾ Final 🔹 Himalaya Nutravedics has grown from ₹14.43 cr rev + ₹0.43 cr PAT in FY24 to ₹43.07 cr rev + ₹7.39 cr PAT in FY26 🔹 Margin expansion, own-brand growth, high return ratios and falling leverage are major improvements 🔹 100% fresh issue is also notable, with most money directed into working capital and growth 🔸 But cash flow tells a different story from PAT: operating cash flow deteriorated to -₹3.83 cr in FY26 while profit reached ₹7.39 cr 🔸 Temporary startup tax benefit materially supports current PAT 🔸 Customer, supplier, product and geographic concentration remain high 🔸 ₹7.5 cr digital/branding expansion is a major strategic change and coincides with an ongoing corporate trademark transition 🛠️ Key things to watch next are anchor participation, QIB demand, subscription mix, operating cash-flow conversion, inventory + receivable growth, D2C execution, brand-spend productivity, trademark proceedings and profitability after tax benefits normalize ⚠️ This is not a buy/sell recommendation. IPO GMP is unofficial and changes quickly. SME IPOs can be illiquid and volatile. Always read the RHP/DRHP, check valuation, risks and your own financial situation before applying #himalayanutravedics #himalayanutravedicsipo #ayurveda #nutraceuticals #ayurvedicmedicine #healthcare #pharma #contractmanufacturing #wellness #smeipo #ipo #nse #bse #sebi #ipoalert #nifty50 #sensex #niftybank #niftyit #Nifty500 #niftysmallcap #shreekaram