Bal Pharma Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹96.00−₹1.74 (−1.78%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Bal Pharma Limited, together with its subsidiaries, manufactures and markets pharmaceutical formulations and active pharmaceutical ingredients (APIs) in India and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees939

Annual revenue₹303 Cr

How does it make money?

Turns over ₹303 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 939 employees supports ₹32.3 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹32.3 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?Some evidence

ROCE of 16.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

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 +0% while net margin moved +143% 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+0%

Margin effect+143%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of 0.44 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

53/ 100

Average

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

Valuation

70/ 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

21.1x

3Y Median

24.2x

40 monthly readings · mean 33.3x · range 13.2x–75.6x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 13% below its 3y median of 24.2x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 37% below the peer median of 33.3x.

vs. its own history

Fair

24.2x median over 40 months · -13%

vs. sector peers

Cheap

33.3x median of 4 peers · -37%

vs. generic bands

Fair

15x–35x

EV/EBITDA

10.0x

PEG

0.61

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 8.0% to 10.5% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from 4.0% to 7.6%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 2 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 1.94x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.4x — little room if earnings dip.
🟡Debt is increasingFinancial
Total debt is up 25% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 8.0% to 10.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 37% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

The debt load needs earnings to hold up
Debt is 5.2x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Growth barely outpaces inflation
Revenue compounding at 0.1% 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.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1EBITDA margin holds above 8%✓ 10.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.2x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 1.4x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✗ 0.1% CAGR
Latest reported year was 34.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹8 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

8 / 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

5 good · 4 neutral · 2 weak

Market Cap

₹153 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

21.1x

Fair

Fairly valued against the generic band

P/B Ratio

1.86x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.54

Profitable

Profitable on a per-share basis

ROE

7.6%

Weak

Weak capital efficiency

ROCE

16.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.94x

High

High leverage

Revenue Growth (YoY)

34.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

446.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.25%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹8 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

5.8%

Average

Average margins

Net Margin

2.2%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.05

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.44

Defensive

Steadier than the market

52W Range Position

56%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

102.8 / 95.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

35.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹302 Cr	₹339 Cr	₹294 Cr	₹303 Cr	+0.1%
EBITDA	₹24 Cr	₹34 Cr	₹29 Cr	₹32 Cr	+9.5%
EBITDA Margin	8.0%	9.9%	10.0%	10.5%	—
PAT (Net Profit)	₹3 Cr	₹7 Cr	₹7 Cr	₹6 Cr	+34.7%
EPS	₹1.67	₹4.96	₹4.56	₹3.95	+33.2%
ROE	4.0%	10.3%	9.3%	7.6%	—
ROCE	14.7%	18.8%	16.9%	16.5%	—
Total Debt	₹133 Cr	₹142 Cr	₹150 Cr	₹167 Cr	+7.8%
Free Cash Flow	-₹16 Cr	₹12 Cr	₹2 Cr	₹8 Cr	—

🟡 Revenue has been broadly flat over 3 years (0.1% a year).

🟢 EBITDA has grown at 9.5% a year over 3 years.

🟢 EBITDA Margin has risen from 8.0% to 10.5% over 3 years (+2.5 pts).

🟢 PAT (Net Profit) has grown at 34.7% a year over 3 years.

🟢 EPS has grown at 33.2% a year over 3 years.

🟢 ROE has risen from 4.0% to 7.6% over 3 years (+3.6 pts).

🟢 ROCE has risen from 14.7% to 16.5% over 3 years (+1.8 pts).

🔴 Total Debt has grown at 7.8% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹16 Cr to ₹8 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹376 Cr

Total Liabilities

₹293 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹31 Cr

Capex

-₹22 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

65.3%

Corporate Actions

Dividend Rate

₹1.2

Ex-Dividend Date

17 Sept 2026

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

Bal Pharma opens 48-hour window for shareholder feedback on warrant pricing

scanx.trade, 11 Oct

Bal Pharma Upper Circuit Today: Price, Data and Peers

Univest, 12 Oct

With EPS Growth And More, Bal Pharma (NSE:BALPHARMA) Makes An Interesting Case

Simply Wall Street, 12 May

Bal Pharma Limited (BALPHARMA.NS) Rallies 7.01% to ₹112.11 as Stock Approaches Resistance Zone - VWAP Bounce

https://www.siam.in/, 29 Sept

BALPHARMA Historical Data

Equitypandit, 31 Dec

Bal Pharma BALPHARMA NSE Price Movement Clarification

Kalkine India, 10 Sept

Watch Items

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

DalalBaazaar Thesis

StrongGrowth

MiddlingBusiness Quality · Financial Health · Profitability · Valuation

WeakRisk

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.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x; Revenue growth stays above 4% a year · see Key things to watch ↑