Deep Health AI India Limited

Healthcare — Health Information Services · BSE

₹1.61−₹0.03 (−1.83%)

DalalBaazaar Score

43 / 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, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

Deep Health AI India Limited engages in the manufacturing and sales of gold and diamond studded jewelry products in India. The company operates through two segments, Diamond Jewellery and Pharmaceuticals.

IndustryHealth Information Services

SectorHealthcare

Employees8

Annual revenue₹4 Cr

How does it make money?

Turns over ₹4 Cr a year. Of every ₹100 of sales, about ₹27 reaches shareholders as profit, with ₹91 left at the operating level before interest, tax and depreciation. Each of its 8 employees supports ₹53.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹53.1 lakh

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, CIPLA LTD, DR. REDDY S LABORATORIES, APOLLO HOSPITALS ENTER. L. 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 3.2% 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?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved -45% while net margin moved +63% 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-45%

Margin effect+63%

DalalBaazaar Score

43/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 17.9% a year
✗ Profit has declined at 3.4% a year

Quality vs. Valuation

Company Quality

36/ 100

Weak

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

Valuation

81/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

14.6x

3Y Median

17.1x

40 monthly readings · mean 23.8x · range 1.8x–74.4x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 15% below its 3y median of 17.1x. 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 56% below the peer median of 33.3x.

vs. its own history

Fair

17.1x median over 40 months · -15%

vs. sector peers

Cheap

33.3x median of 4 peers · -56%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

3.9x

PEG

0.50

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 24.3% to 91.2% over 3 years.
Debt is being paid down
Total debt is down 90% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 8.5% to 2.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 12.5% to 3.2% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 1 high · 2 watch

🔴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 -₹4 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 177% 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 24.3% to 91.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 90% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 56% 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?

Returns on shareholder capital are falling
ROE has dropped from 8.5% to 2.2%. 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.
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

1EBITDA margin holds above 89%✓ 91.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹4 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 3.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 17.1x✓ 14.6x today
A re-rating above its own history needs a reason; without one it is just a higher price.

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

6 good · 2 neutral · 3 weak

Market Cap

₹23 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.6x

Cheap

Cheap against the generic band

P/B Ratio

0.29x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.11

Profitable

Profitable on a per-share basis

ROE

2.2%

Weak

Weak capital efficiency

ROCE

3.2%

Weak

Low return on total capital employed

Debt/Equity

0.73x

Moderate

Moderate leverage

Revenue Growth (YoY)

200.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

29.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

12.42%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

-₹4 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-457.4%

Weak

Thin margins leave little room for error

Net Margin

-23.7%

Weak

Very little revenue reaches the bottom line

Current Ratio

19.34

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.06

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

1.7 / 1.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

39.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹8 Cr	₹3 Cr	₹1 Cr	₹4 Cr	-17.9%
EBITDA	₹2 Cr	₹2 Cr	₹1 Cr	₹4 Cr	+27.7%
EBITDA Margin	24.3%	71.5%	94.5%	91.2%	—
PAT (Net Profit)	₹1 Cr	₹0 Cr	₹1 Cr	₹1 Cr	-3.4%
EPS	₹3.1	₹0.13	₹0.17	₹0.11	-67.1%
ROE	8.5%	2.0%	3.9%	2.2%	—
ROCE	12.5%	3.8%	5.3%	3.2%	—
Total Debt	₹4 Cr	₹2 Cr	₹1 Cr	₹0 Cr	-54.1%
Free Cash Flow	-₹0 Cr	-₹5 Cr	₹1 Cr	-₹4 Cr	—

🔴 Revenue has shrunk at 17.9% a year over 3 years.

🟢 EBITDA has grown at 27.7% a year over 3 years.

🟢 EBITDA Margin has risen from 24.3% to 91.2% over 3 years (+66.9 pts).

🔴 PAT (Net Profit) has shrunk at 3.4% a year over 3 years.

🔴 EPS has shrunk at 67.1% a year over 3 years.

🔴 ROE has fallen from 8.5% to 2.2% over 3 years (-6.3 pts).

🔴 ROCE has fallen from 12.5% to 3.2% over 3 years (-9.3 pts).

🟢 Total Debt has shrunk at 54.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹52 Cr

Total Liabilities

₹1 Cr

Cash & Equivalents

₹8 Cr

Operating Cash Flow

-₹4 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

8.4%

Corporate Actions

Dividend Rate

₹0.2

Ex-Dividend Date

07 Nov 2025

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
CIPLA LTD	31.8x	9.8%
DR. REDDY S LABORATORIES	31.0x	8.8%
APOLLO HOSPITALS ENTER. L	54.3x	22.0%

Recent News

6 general

Deep Health AI India Ltd revises FY26 audit report

scanx.trade, 18 Oct

Deep Health AI India (BSE:539559) - Stock Analysis

Simply Wall Street, 02 Mar

Deep Health AI India: AI Health App Pivot and Rs 10.36 Cr Debt Buy

Kalkine India, 12 Oct

Deep Health AI India Limited Share Price - Live DEEPAI Stock Price & Chart

Upstox, 05 May

Deep Health AI India Ltd. Share Price Live Today

CNBC TV18, 25 Mar

Deep Health AI India Limited Board Approves Rights Issue of Up to Rs. 25.00 Crores

scanx.trade, 04 May

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑