Bafna Pharmaceuticals Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹461.35+₹9.00 (+1.99%)

DalalBaazaar Score

43 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:44 pm

Understanding the Business

Company site ↗

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

What does this company do?

Bafna Pharmaceuticals Limited manufactures and sells finished pharmaceutical formulations in India. The company offers its products in various dosage forms, including tablets, capsules, and solid orals.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees339

Annual revenue₹151 Cr

How does it make money?

Turns over ₹151 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 339 employees supports ₹44.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹44.4 lakh

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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 12.2% 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.

Peer median ROE14.5%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +31% while net margin moved -25% 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+31%

Margin effect-25%

DalalBaazaar Score

43/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 140.2x is demanding — it needs sustained high growth to justify
✗ P/E is 441% above its own historical median of 25.9x — expensive by its own standards
✗ P/B of 11.37x is a steep premium to book

Quality vs. Valuation

Company Quality

47/ 100

Average

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

Valuation

23/ 100

Expensive

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

140.2x

3Y Median

25.9x

40 monthly readings · mean 47.3x · range 15.8x–149.4x

Sector Median

33.3x

median of 4 sector peers

⚠️Current valuation is approximately 441% above its 3y median of 25.9x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 321% above the peer median of 33.3x.

vs. its own history

Expensive

25.9x median over 40 months · +441%

vs. sector peers

Expensive

33.3x median of 4 peers · +321%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

54.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 15.4% to 11.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 16.1% to 12.2% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 63% over 3 years, from ₹23 Cr to ₹37 Cr.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹10 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 2.6 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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?

Margins are being competed away
EBITDA margin has fallen from 16.2% to 13.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 441% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 15.4% to 11.5%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
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%✓ 13.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹10 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 7% a year✓ 9.3% CAGR
Latest reported year was -23.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 1.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 9%✓ 12.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

3 / 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

2 good · 4 neutral · 5 weak

Market Cap

₹1,091 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

140.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

11.37x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹3.29

Profitable

Profitable on a per-share basis

ROE

11.5%

Moderate

Moderate capital efficiency

ROCE

12.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.39x

Low

Conservative leverage

Revenue Growth (YoY)

-23.2%

Shrinking

Sales are contracting

Profit Growth (YoY)

-97.9%

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

-₹10 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-3.4%

Weak

Thin margins leave little room for error

Net Margin

5.5%

Average

Average bottom-line conversion

Current Ratio

1.57

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.07

Defensive

Steadier than the market

52W Range Position

100%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

385.0 / 323.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

100.0

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹115 Cr	₹152 Cr	₹146 Cr	₹151 Cr	+9.3%
EBITDA	₹19 Cr	₹14 Cr	₹14 Cr	₹21 Cr	+3.2%
EBITDA Margin	16.2%	9.4%	9.3%	13.6%	—
PAT (Net Profit)	₹11 Cr	₹7 Cr	₹4 Cr	₹11 Cr	-0.7%
EPS	₹4.79	₹3.11	₹1.76	₹4.69	-0.7%
ROE	15.4%	9.1%	4.9%	11.5%	—
ROCE	16.1%	9.9%	6.6%	12.2%	—
Total Debt	₹23 Cr	₹24 Cr	₹28 Cr	₹37 Cr	+17.8%
Free Cash Flow	-₹3 Cr	-₹6 Cr	₹0 Cr	-₹10 Cr	—

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

🟢 EBITDA has grown at 3.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 16.2% to 13.6% over 3 years (-2.6 pts).

🟡 PAT (Net Profit) has been broadly flat over 3 years (-0.7% a year).

🟡 EPS has been broadly flat over 3 years (-0.7% a year).

🔴 ROE has fallen from 15.4% to 11.5% over 3 years (-3.9 pts).

🔴 ROCE has fallen from 16.1% to 12.2% over 3 years (-3.9 pts).

🔴 Total Debt has grown at 17.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹176 Cr

Total Liabilities

₹79 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹15 Cr

Capex

-₹25 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

89.7%

Corporate Actions

Ex-Dividend Date

19 Sept 2013

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 mixed5 general

Bafna Pharmaceuticals Share Price Forecast to 2030

Univest, 15 Jul

Bafna Pharmaceuticals promoters report no share encumbrance in FY26

scanx.trade, 30 Jun

Why Is Bafna Pharmaceuticals Share Price Falling Key Reasons 2026

Univest, 03 JunPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Bafna Pharmaceuticals Clarifies Share Price Movement Following Stock Exchange Queries

scanx.trade, 15 Apr

Akum Pharma’s Finance chief Rajkumar Bafna resigns citing pollution in Delhi

The Hindu, 28 Dec

Bafna Pharmaceuticals: 7 Stock Signals to Watch

Univest, 22 Sept

Watch Items

Revenue growth is negative (-23.2%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

MiddlingBusiness Quality · Financial Health · Profitability

WeakGrowth · Valuation · Risk

Points for each in the Score ↑

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. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑