Balaxi Pharmaceuticals Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹22.19+₹0.06 (+0.27%)

DalalBaazaar Score

33 / 100

🔴 Weak

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Balaxi Pharmaceuticals Limited engages in the international wholesale distribution of pharmaceutical products in India and internationally. The company offers pharmaceutical products across various therapeutic areas, including antibiotics, analgesic, anti-malaria, and others.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees500

Annual revenue₹270 Cr

How does it make money?

Turns over ₹270 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 500 employees supports ₹54.0 lakh of revenue a year, the signature of a people-led business.

EBITDA margin4.2%

Net margin0.5%

Revenue / employee₹54.0 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.

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 3.3% 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.

ROCE3.3%

ROE0.6%

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 -20% while net margin moved -96% 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-20%

Margin effect-96%

DalalBaazaar Score

33/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 7.1% a year
✗ Profit has declined at 68.6% a year
✗ Profit fell 94.3% in the latest year

Quality vs. Valuation

Company Quality

31/ 100

Weak

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

Valuation

37/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

49.3x

3Y Median

9.5x

40 monthly readings · mean 16.3x · range 3.5x–87.6x

Sector Median

33.3x

median of 4 sector peers

⚠️Current valuation is approximately 421% above its 3y median of 9.5x. 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 48% above the peer median of 33.3x.

vs. its own history

Expensive

9.5x median over 40 months · +421%

vs. sector peers

Expensive

33.3x median of 4 peers · +48%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

49.3x

P/B

0.49x

EV/EBITDA

14.5x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Very low debt
Debt/Equity of 0.23x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention7

Margins are compressing
EBITDA margin has slipped from 17.6% to 4.2% over 3 years.
Debt is rising
Total debt is up 333% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 25.1% to 0.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 30.8% to 3.3% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 160% against revenue growth of -20% — customers are taking longer to pay.
Valuation above its historical average
At 49.3x the stock trades 421% above its own median of 9.5x.

Red Flags

6 items require attention · 3 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 333% over 3 years, from ₹13 Cr to ₹58 Cr.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 13.4 points, from 17.6% to 4.2%.
🔴Receivables growing faster than salesFinancial
Receivables up 160% against revenue up -20% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 10.8x to 2.4x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹47 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 97% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 17.6% to 4.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 5.1x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 160% against revenue up -20%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 421% 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 25.1% to 0.6%. 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.

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

1EBITDA margin holds above 2%✓ 4.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.1x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹47 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 2.4x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 3.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 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

4 good · 2 neutral · 5 weak

Market Cap

₹123 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

49.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

0.49x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.45

Profitable

Profitable on a per-share basis

ROE

0.6%

Weak

Weak capital efficiency

ROCE

3.3%

Weak

Low return on total capital employed

Debt/Equity

0.23x

Low

Conservative leverage

Revenue Growth (YoY)

14.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-94.3%

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

-₹47 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹22.19

Operating Margin

4.7%

Weak

Thin margins leave little room for error

Net Margin

0.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

4.05

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.74

Defensive

Steadier than the market

52W Range Position

24%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

22.6 / 23.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

39.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹336 Cr	₹241 Cr	₹293 Cr	₹270 Cr	-7.1%
EBITDA	₹59 Cr	₹44 Cr	₹33 Cr	₹11 Cr	-42.2%
EBITDA Margin	17.6%	18.3%	11.5%	4.2%	—
PAT (Net Profit)	₹46 Cr	-₹2 Cr	₹25 Cr	₹1 Cr	-68.6%
EPS	₹9.08	₹-2.32	₹4.54	₹0.26	-69.4%
ROE	25.1%	-1.2%	10.8%	0.6%	—
ROCE	30.8%	1.8%	12.4%	3.3%	—
Total Debt	₹13 Cr	₹19 Cr	₹53 Cr	₹58 Cr	+63.0%
Free Cash Flow	-₹9 Cr	₹3 Cr	-₹57 Cr	-₹47 Cr	—

🔴 Revenue has shrunk at 7.1% a year over 3 years.

🔴 EBITDA has shrunk at 42.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 17.6% to 4.2% over 3 years (-13.4 pts).

🔴 PAT (Net Profit) has shrunk at 68.6% a year over 3 years.

🔴 EPS has shrunk at 69.4% a year over 3 years.

🔴 ROE has fallen from 25.1% to 0.6% over 3 years (-24.6 pts).

🔴 ROCE has fallen from 30.8% to 3.3% over 3 years (-27.4 pts).

🔴 Total Debt has grown at 63.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹337 Cr

Total Liabilities

₹88 Cr

Total Debt

₹58 Cr

Cash & Equivalents

₹15 Cr

Operating Cash Flow

-₹4 Cr

Capex

-₹43 Cr

Corporate Actions

Ex-Dividend Date

01 Jul 2022

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

6 general

Balaxi Pharma Share Price

Upstox, 16 Oct

Balaxi Pharmaceuticals (BALAXI.NS) Firms Up Near ₹22.74 as Buyers Defend Lower Levels - Equity Put Call

siam.in, 08 Oct

Balaxi Pharmaceuticals Share Price: Buy or Sell

Univest, 09 Sept

Balaxi Pharmaceuticals Limited (NSE:BALAXI) Looks Inexpensive After Falling 27% But Perhaps Not Attractive Enough

Simply Wall Street, 31 Dec

Balaxi Pharmaceuticals Submits RTA Report on Physical Share Transfer Re-Lodgements for April 2026

scanx.trade, 12 May

Balaxi Pharmaceuticals Ltd. Peer Comparison – Compare with Others

Value Research, 31 Aug

Watch Items

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

DalalBaazaar Thesis

🔴Business QualityWeak5.9/20

🟡Financial HealthAdequate10.1/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak4.6/15

🔴ValuationDemanding6.2/15

🔴RiskHigh4/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 2%4.2%
✗Debt / EBITDA falls below 3x5.1x
✗Free cash flow remains positive-₹47 Cr
✗Interest cover stays above 3x2.4x
✗ROCE stays above 8%3.3%