Concord Drugs Limited

Healthcare — Drug Manufacturers - Specialty & Generic · BSE

₹69.10−₹2.59 (−3.61%)

DalalBaazaar Score

46 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, 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. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:45 pm

Understanding the Business

Company site ↗

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

What does this company do?

Concord Drugs Limited engages in the manufacture and sale of pharmaceutical formulations in India.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees250

Annual revenue₹79 Cr

How does it make money?

Turns over ₹79 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 250 employees supports ₹31.5 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹31.5 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 5.8% 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?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +51% while net margin moved -29% 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+51%

Margin effect-29%

DalalBaazaar Score

46/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 2.2% is weak

Quality vs. Valuation

Company Quality

44/ 100

Weak

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

Valuation

44/ 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

41.4x

3Y Median

77.0x

40 monthly readings · mean 108.3x · range 30.0x–250.4x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 46% below its 3y median of 77.0x. 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 24% above the peer median of 33.3x.

vs. its own history

Cheap

77.0x median over 40 months · -46%

vs. sector peers

Expensive

33.3x median of 4 peers · +24%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

23.4x

PEG

18.01

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 14% over 3 years.
Very low debt
Debt/Equity of 0.30x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 8.1% to 5.8% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 2 high · 3 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.9x — little room if earnings dip.
🔴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 -₹8 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 3.1 points over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 41% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 46% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
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 8.8% to 5.7%. 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 3.2x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 24% above the peer median. That premium needs a reason that persists, or it closes.
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

1Revenue growth stays above 11% a year✓ 14.8% CAGR
Latest reported year was 53.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 4%✓ 5.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.2x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹8 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 1.9x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

5 / 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 · 3 neutral · 4 weak

Market Cap

₹91 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

41.4x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.60x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹1.67

Profitable

Profitable on a per-share basis

ROE

2.2%

Weak

Weak capital efficiency

ROCE

5.8%

Weak

Low return on total capital employed

Debt/Equity

0.30x

Low

Conservative leverage

Revenue Growth (YoY)

53.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

608.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

-₹8 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

9.2%

Average

Average margins

Net Margin

2.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.53

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.59

Defensive

Steadier than the market

52W Range Position

26%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

74.1 / 75.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

25.5

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹52 Cr	₹45 Cr	₹45 Cr	₹79 Cr	+14.8%
EBITDA	₹5 Cr	₹4 Cr	₹4 Cr	₹4 Cr	-0.8%
EBITDA Margin	8.8%	9.0%	9.1%	5.7%	—
PAT (Net Profit)	₹1 Cr	₹0 Cr	₹0 Cr	₹1 Cr	+2.3%
EPS	₹1.06	₹0.47	₹0.34	₹0.95	-3.6%
ROE	3.1%	1.4%	1.0%	2.2%	—
ROCE	8.1%	6.6%	6.7%	5.8%	—
Total Debt	₹17 Cr	₹18 Cr	₹19 Cr	₹15 Cr	-5.1%
Free Cash Flow	₹1 Cr	-₹0 Cr	₹1 Cr	-₹8 Cr	—

🟢 Revenue has grown at 14.8% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (-0.8% a year).

🔴 EBITDA Margin has fallen from 8.8% to 5.7% over 3 years (-3.1 pts).

🟢 PAT (Net Profit) has grown at 2.3% a year over 3 years.

🔴 EPS has shrunk at 3.6% a year over 3 years.

🟡 ROE has held roughly flat at 2.2% over 3 years.

🔴 ROCE has fallen from 8.1% to 5.8% over 3 years (-2.3 pts).

🟢 Total Debt has shrunk at 5.1% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹8 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹75 Cr

Total Liabilities

₹26 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹7 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

67.9%

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

2 mixed4 general

Concord Drugs Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

HESTER BIOSCIENCES Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 17 Oct

Concord Drugs passes all seven resolutions at 31st annual general meeting

scanx.trade, 01 Oct

Concord Drugs shares soar 4% after pharma order worth ₹14.71 Cr

Alice Blue, 30 DecPrice 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.

Concord Biotech shares jump over 8% after US FDA approves latest Mycophenolate Mofetil drug

Upstox, 02 JunPrice 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.

Concord Biotech vs Unichem Laboratories vs Aarti Drugs: Compariso

Univest, 25 Sept

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

MiddlingFinancial Health · Growth · Valuation

WeakBusiness Quality · Profitability · Risk

Points for each in the Score ↑

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

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑