Coral Laboratories Limited

Healthcare — Drug Manufacturers - Specialty & Generic · BSE

₹530.00−₹22.85 (−4.13%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Very High

Driven by high debt relative to equity, 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. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:27 pm

Understanding the Business

Company site ↗

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

What does this company do?

Coral Laboratories Limited manufactures and sells pharmaceutical formulations in India, Ethiopia, and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees149

Annual revenue₹84 Cr

How does it make money?

Turns over ₹84 Cr a year. Of every ₹100 of sales, about ₹19 reaches shareholders as profit, with ₹30 left at the operating level before interest, tax and depreciation. Each of its 149 employees supports ₹56.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹56.6 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 10.9% 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?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +8% while net margin moved +135% 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+8%

Margin effect+135%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 0.85 — moves roughly with the market
✗ 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
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

66/ 100

Good

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

Valuation

88/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

9.9x

3Y Median

15.5x

40 monthly readings · mean 15.5x · range 5.5x–40.8x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 37% below its 3y median of 15.5x. 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 70% below the peer median of 33.3x.

vs. its own history

Cheap

15.5x median over 40 months · -37%

vs. sector peers

Cheap

33.3x median of 4 peers · -70%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.7x

PEG

0.27

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 13.7% to 29.8% over 3 years.
Return on equity is rising
ROE has improved from 4.2% to 7.8%.
Return on capital is rising
ROCE has improved from 5.3% to 10.9%.
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 2.07x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🟡Inventory building faster than salesFinancial
Inventory up 64% against revenue up 8% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 13.7% to 29.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 37% 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.
Cheaper than its peers
It trades 70% 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?

Leverage amplifies any setback
Debt/Equity of 2.07x. Interest is payable whether or not the business has a good year.
Growth barely outpaces inflation
Revenue compounding at 2.7% 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 28%✓ 29.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹8 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✗ 2.7% CAGR
Latest reported year was 57.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 10.9%
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

5 good · 3 neutral · 3 weak

Market Cap

₹189 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

9.9x

Cheap

Cheap against the generic band

P/B Ratio

0.91x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹53.76

Profitable

Profitable on a per-share basis

ROE

7.8%

Weak

Weak capital efficiency

ROCE

10.9%

Moderate

Moderate return on the capital in the business

Debt/Equity

2.07x

High

High leverage

Revenue Growth (YoY)

57.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

110.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.38%

Modest

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

Free Cash Flow

-₹8 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

9.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

16.3%

Good

Healthy core-business profitability

Net Margin

19.9%

Good

Strong bottom-line conversion

Current Ratio

6.48

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.85

Market-like

Moves roughly in line with the market

52W Range Position

53%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

560.7 / 583.8

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

42.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹78 Cr	₹82 Cr	₹113 Cr	₹84 Cr	+2.7%
EBITDA	₹11 Cr	₹23 Cr	₹35 Cr	₹25 Cr	+32.9%
EBITDA Margin	13.7%	27.9%	31.2%	29.8%	—
PAT (Net Profit)	₹6 Cr	₹16 Cr	₹24 Cr	₹16 Cr	+36.5%
EPS	₹18.04	₹44.19	₹67.61	₹45.85	+36.5%
ROE	4.2%	8.9%	12.0%	7.8%	—
ROCE	5.3%	11.5%	15.9%	10.9%	—
Total Debt	—	—	₹4 Cr	₹4 Cr	—
Free Cash Flow	₹11 Cr	-₹6 Cr	-₹4 Cr	-₹8 Cr	—

🟢 Revenue has grown at 2.7% a year over 3 years.

🟢 EBITDA has grown at 32.9% a year over 3 years.

🟢 EBITDA Margin has risen from 13.7% to 29.8% over 3 years (+16.0 pts).

🟢 PAT (Net Profit) has grown at 36.5% a year over 3 years.

🟢 EPS has grown at 36.5% a year over 3 years.

🟢 ROE has risen from 4.2% to 7.8% over 3 years (+3.7 pts).

🟢 ROCE has risen from 5.3% to 10.9% over 3 years (+5.6 pts).

🔴 Free Cash Flow has turned negative, from ₹11 Cr to -₹8 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹241 Cr

Total Liabilities

₹32 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹16 Cr

Capex

-₹24 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

80.0%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

22 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

2 positive1 mixed3 general

Coral Laboratories Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 13 Oct

Coral Laboratories board approves FY26 cost audit report

scanx.trade, 25 Sept

Coral Laboratories Up 1% After Completing Ointment Unit Capacity Expansion at Dehradun Plant

Alice Blue, 24 MarCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Coral Laboratories approves dividend and Coral Laboratories stock yields 0.35 percent

ad-hoc-news.de, 13 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Coral Laboratories Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 01 Sept

Coral Laboratories passes all AGM resolutions; dividend approved

scanx.trade, 29 SeptCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability · Valuation

MiddlingFinancial Health

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 2 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Free cash flow remains positive; Revenue growth stays above 4% a year · see Key things to watch ↑