Deccan Health Care Limited

Healthcare — Drug Manufacturers - Specialty & Generic · BSE

₹13.06+₹0.17 (+1.32%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

CAUTION

Risk

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, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:04 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 Deccan Health Care Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Deccan Health Care Limited, a nutraceutical company provides nutritional, personal care, and food-based solutions. It produces and distributes soft gelatin capsules, food pills, vitamin supplements, and nutritional meals.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees80

Annual revenue₹82 Cr

How does it make money?

Turns over ₹82 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 80 employees supports ₹1.02 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin7.1%

Net margin3.0%

Revenue / employee₹1.02 Cr

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 3.0% 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.

ROCE3.0%

ROE2.3%

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 +82% while net margin moved +347% 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+82%

Margin effect+347%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 2.3% is weak

Quality vs. Valuation

Company Quality

49/ 100

Average

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 reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

12.6x

3Y Median

35.0x

40 monthly readings · mean 57.9x · range 11.8x–156.1x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 64% below its 3y median of 35.0x. 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 62% below the peer median of 33.3x.

vs. its own history

Cheap

35.0x median over 40 months · -64%

vs. sector peers

Cheap

33.3x median of 4 peers · -62%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

12.6x

P/B

0.28x

EV/EBITDA

6.0x

PEG

0.12

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 4.5% to 7.1% over 3 years.
Return on capital is rising
ROCE has improved from 0.6% to 3.0%.
Valuation below its historical average
At 12.6x the stock trades 64% below its own median of 35.0x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Debt is rising
Total debt is up 145% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 145% over 3 years, from ₹2 Cr to ₹4 Cr.
🔴High leverageFinancial
Debt/Equity of 3.59x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 45% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 4.5% to 7.1%. 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 64% 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 62% 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 3.59x. Interest is payable whether or not the business has a good year.
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
3 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

1Revenue growth stays above 17% a year✓ 22.1% CAGR
Latest reported year was -0.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 5%✓ 7.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹6 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 3.0%
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

₹32 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

12.6x

Cheap

Cheap against the generic band

P/B Ratio

0.28x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.04

Profitable

Profitable on a per-share basis

ROE

2.3%

Weak

Weak capital efficiency

ROCE

3.0%

Weak

Low return on total capital employed

Debt/Equity

3.59x

High

High leverage

Revenue Growth (YoY)

-0.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

20.0%

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

-₹6 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹13.06

Operating Margin

2.4%

Weak

Thin margins leave little room for error

Net Margin

3.1%

Average

Average bottom-line conversion

Current Ratio

3.81

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.64

Defensive

Steadier than the market

52W Range Position

55%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

12.1 / 12.5

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

67.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹45 Cr	₹60 Cr	₹75 Cr	₹82 Cr	+22.1%
EBITDA	₹2 Cr	₹4 Cr	₹3 Cr	₹6 Cr	+42.4%
EBITDA Margin	4.5%	6.3%	4.2%	7.1%	—
PAT (Net Profit)	₹0 Cr	₹1 Cr	₹1 Cr	₹2 Cr	+101.1%
EPS	₹0.24	₹0.8	₹0.45	₹1.01	+61.4%
ROE	0.4%	1.5%	1.1%	2.3%	—
ROCE	0.6%	2.3%	1.5%	3.0%	—
Total Debt	₹2 Cr	₹2 Cr	₹1 Cr	₹4 Cr	+34.8%
Free Cash Flow	-₹7 Cr	-₹13 Cr	-₹7 Cr	-₹6 Cr	—

🟢 Revenue has grown at 22.1% a year over 3 years.

🟢 EBITDA has grown at 42.4% a year over 3 years.

🟢 EBITDA Margin has risen from 4.5% to 7.1% over 3 years (+2.6 pts).

🟢 PAT (Net Profit) has grown at 101.1% a year over 3 years.

🟢 EPS has grown at 61.4% a year over 3 years.

🟢 ROE has risen from 0.4% to 2.3% over 3 years (+1.9 pts).

🟢 ROCE has risen from 0.6% to 3.0% over 3 years (+2.4 pts).

🔴 Total Debt has grown at 34.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹149 Cr

Total Liabilities

₹39 Cr

Total Debt

₹4 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

-₹4 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

57.5%

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

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

Equitymaster, 17 Oct

Deccan Health Care Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 04 Sept

Deccan Health Care adopts FY26 financials, reappoints director at AGM

scanx.trade, 30 Sept

ADVANCED ENZYME TECHNOLOGIES Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 15 Oct

Deccan Health Care Limited Share Price

Upstox, 22 Mar

Deccan Health Care schedules 30th AGM for September 30, 2026

scanx.trade, 07 Sept

Watch Items

Revenue growth is negative (-0.3%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟡Financial HealthAdequate9.9/20

🟢GrowthStrong14.9/20

🔴ProfitabilityWeak4.5/15

🟢ValuationAttractive13.2/15

🔴RiskHigh3.7/10

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

This thesis breaks if

✓Revenue growth stays above 17% a year22.1% CAGR
✓EBITDA margin holds above 5%7.1%
✗Free cash flow remains positive-₹6 Cr
✓Debt / EBITDA stays below 2x0.7x
✗ROCE stays above 8%3.0%