Ambalal Sarabhai Enterprises Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹37.75−₹0.10 (−0.26%)

DalalBaazaar Score

62 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, falling profits.

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Ambalal Sarabhai Enterprises Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Ambalal Sarabhai Enterprises Limited, together with its subsidiaries, manufactures and markets pharmaceutical, molecular diagnostics, and electronic products in India and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Annual revenue₹201 Cr

How does it make money?

Turns over ₹201 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation.

EBITDA margin13.5%

Net margin8.9%

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, DR. REDDY S LABORATORIES, CIPLA LTD, DIVI S LABORATORIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

SUN PHARMACEUTICAL IND LP/E 34.9x · ROE 14.5%

DR. REDDY S LABORATORIESP/E 31.0x · ROE 8.8%

CIPLA LTDP/E 31.8x · ROE 9.8%

DIVI S LABORATORIES LTDP/E 83.0x · ROE 17.5%

What is its competitive advantage?Little sign of one

Returns on capital of 12.4% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE12.4%

ROE11.2%

Peer median ROE14.5%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +18% while net margin moved +31% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+18%

Margin effect+31%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.01 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

64/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

69/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

22.2x

Sector Median

33.3x

median of 4 sector peers

🟢Against its sector it trades 33% below the peer median of 33.3x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

33.3x median of 4 peers · -33%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

22.2x

P/B

1.83x

EV/EBITDA

12.5x

PEG

1.40

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Debt is rising
Total debt is up 25% over 3 years — worth checking what it funded.
Receivables growing faster than sales
Receivables are up 75% against revenue growth of 18% — customers are taking longer to pay.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Receivables growing faster than salesFinancial
Receivables up 75% against revenue up 18% — sales are being booked faster than they are collected.
🟡Debt is increasingFinancial
Total debt is up 25% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 33% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹7 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 75% against revenue up 18%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 5.8% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 12%✓ 13.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Revenue growth stays above 4% a year✓ 5.8% CAGR
Latest reported year was 8.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Free cash flow remains positive✓ ₹7 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 9%✓ 12.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 7 neutral · 1 weak

Market Cap

₹289 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

22.2x

Fair

Fairly valued against the generic band

P/B Ratio

1.83x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹1.7

Profitable

Profitable on a per-share basis

ROE

11.2%

Moderate

Moderate capital efficiency

ROCE

12.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.36x

Low

Conservative leverage

Revenue Growth (YoY)

8.0%

Modest

Modest growth

Profit Growth (YoY)

-51.4%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹7 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹37.75

Operating Margin

12.0%

Average

Average margins

Net Margin

6.6%

Average

Average bottom-line conversion

Current Ratio

1.27

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.01

Defensive

Steadier than the market

52W Range Position

38%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

39.3 / 42.0

Bearish alignment (short < long)

RSI (14)

35.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹170 Cr	₹173 Cr	₹195 Cr	₹201 Cr	+5.8%
EBITDA	₹21 Cr	₹16 Cr	₹20 Cr	₹27 Cr	+9.3%
EBITDA Margin	12.3%	9.2%	10.5%	13.5%	—
PAT (Net Profit)	₹11 Cr	₹6 Cr	₹5 Cr	₹18 Cr	+15.9%
EPS	₹1.49	₹0.74	₹0.64	₹2.32	+15.9%
ROE	8.7%	4.2%	3.5%	11.2%	—
ROCE	12.3%	8.4%	6.0%	12.4%	—
Total Debt	₹45 Cr	₹46 Cr	₹51 Cr	₹57 Cr	+7.7%
Free Cash Flow	-₹15 Cr	₹6 Cr	-₹20 Cr	₹7 Cr	—

🟢 Revenue has grown at 5.8% a year over 3 years.

🟢 EBITDA has grown at 9.3% a year over 3 years.

🟢 EBITDA Margin has risen from 12.3% to 13.5% over 3 years (+1.2 pts).

🟢 PAT (Net Profit) has grown at 15.9% a year over 3 years.

🟢 EPS has grown at 15.9% a year over 3 years.

🟢 ROE has risen from 8.7% to 11.2% over 3 years (+2.5 pts).

🟡 ROCE has held roughly flat at 12.4% over 3 years.

🔴 Total Debt has grown at 7.7% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹15 Cr to ₹7 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹281 Cr

Total Liabilities

₹123 Cr

Total Debt

₹57 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

₹13 Cr

Capex

-₹6 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

35.1%

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
DR. REDDY S LABORATORIES	31.0x	8.8%
CIPLA LTD	31.8x	9.8%
DIVI S LABORATORIES LTD	83.0x	17.5%

Recent News

1 mixed1 negative4 general

Ambalal Sarabhai Share Price Gains 10.31% in Today's Trading

Univest, 04 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

AMBALALSA Stock Price and Chart — NSE:AMBALALSA

TradingView, 20 Apr

Ambalal Sarabhai Enterprises Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 29 Aug

Ambalal Sarabhai Q1 Results: Net Profit Falls 52% YoY to ₹3.98 crore

scanx.trade, 12 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Ambalal Sarabhai Enterprises (AMBALALSA.NS) Gains 0.90% to ₹42.43; Stock Holds Above ₹40.31 Support - Arms Index

https://www.siam.in/, 09 Sept

Ambalal Sarabhai Enterprises Ltd. Stock: 11.62% Price Rise

Univest, 30 Jul

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate10.5/20

🟢Financial HealthStrong16.5/20

🟢GrowthStrong13.1/20

🟡ProfitabilityModerate8.3/15

🟡ValuationFair9.3/15

🔴RiskHigh4.4/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 12%13.5%
✗Debt / EBITDA stays below 2x2.1x
✓Revenue growth stays above 4% a year5.8% CAGR
✓Free cash flow remains positive₹7 Cr
✓ROCE stays above 9%12.4%