Dr Lalchandani Labs Limited

Healthcare — Diagnostics & Research · BSE

₹6.99−₹0.15 (−2.10%)

DalalBaazaar Score

43 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:56 pm

Understanding the Business

Company site ↗

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

What does this company do?

Dr Lalchandani Labs Limited provides diagnostic and related healthcare tests and services in India.

IndustryDiagnostics & Research

SectorHealthcare

Annual revenue₹4 Cr

How does it make money?

Turns over ₹4 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹2 left at the operating level before interest, tax and depreciation.

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 0.8% 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?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -17% while net margin moved -105% 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-17%

Margin effect-105%

DalalBaazaar Score

43/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 6.0% a year
✗ Profit fell 84.8% in the latest year

Quality vs. Valuation

Company Quality

44/ 100

Weak

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

Valuation

29/ 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

99.9x

2Y Median

16.3x

28 monthly readings · mean 15.3x · range 7.2x–26.6x

Sector Median

33.3x

median of 4 sector peers

⚠️Current valuation is approximately 511% above its 2y median of 16.3x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 200% above the peer median of 33.3x.

vs. its own history

Expensive

16.3x median over 28 months · +511%

vs. sector peers

Expensive

33.3x median of 4 peers · +200%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

54.3x

PEG

—

What's Good / What's Bad

🟢 What's Going Well4

Debt is being paid down
Total debt is down 68% over 3 years.
Return on equity is rising
ROE has improved from -17.5% to 0.4%.
Return on capital is rising
ROCE has improved from -5.5% to 0.8%.
Very low debt
Debt/Equity of 0.15x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention0

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

Red Flags

3 items require attention · 3 watch

🟡Free cash flow is negativeFinancial
Free cash flow was -₹1 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 23% against revenue up -17% — sales are being booked faster than they are collected.
🟡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?

Deleveraging frees up earnings
Debt is down 68% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 28.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 23% against revenue up -17%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 511% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
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 0%✓ 1.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 28.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹1 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ 0.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Interest cover stays above 4x✓ 6.6x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

3 / 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

3 good · 2 neutral · 6 weak

Market Cap

₹6 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

99.9x

Expensive

Expensive — verify against sector peers

P/B Ratio

0.68x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.07

Profitable

Profitable on a per-share basis

ROE

0.5%

Weak

Weak capital efficiency

ROCE

0.8%

Weak

Low return on total capital employed

Debt/Equity

0.15x

Low

Conservative leverage

Revenue Growth (YoY)

-8.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

-84.8%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

-₹1 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

-1.9%

Weak

Assets generate little profit

Operating Margin

-22.2%

Weak

Thin margins leave little room for error

Net Margin

1.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

3.79

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.34

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

7.1 / 7.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

43.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹5 Cr	₹5 Cr	₹4 Cr	₹4 Cr	-6.0%
EBITDA	₹0 Cr	₹1 Cr	₹1 Cr	₹0 Cr	-14.3%
EBITDA Margin	2.3%	11.7%	20.9%	1.7%	—
PAT (Net Profit)	-₹2 Cr	₹1 Cr	₹0 Cr	₹0 Cr	—
EPS	₹-2.63	₹1.04	₹0.96	—	—
ROE	-17.5%	6.5%	4.2%	0.4%	—
ROCE	-5.5%	9.8%	4.8%	0.8%	—
Total Debt	₹6 Cr	₹3 Cr	₹4 Cr	₹2 Cr	-31.4%
Free Cash Flow	-₹0 Cr	-₹0 Cr	₹0 Cr	-₹1 Cr	—

🔴 Revenue has shrunk at 6.0% a year over 3 years.

🔴 EBITDA has shrunk at 14.3% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 1.7% over 3 years.

🟢 PAT (Net Profit) has turned positive, from -₹2 Cr to ₹0 Cr.

🟢 ROE has risen from -17.5% to 0.4% over 3 years (+18.0 pts).

🟢 ROCE has risen from -5.5% to 0.8% over 3 years (+6.3 pts).

🟢 Total Debt has shrunk at 31.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹18 Cr

Total Liabilities

₹3 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

-₹1 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

71.1%

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

1 mixed5 general

Dr Lalchandani Labs Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

Dr Lalchandani Labs closes trading window from Oct 1 for H1FY27 results

scanx.trade, 30 SeptResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

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

Equitymaster, 17 Oct

Dr Lalchandani Labs Rights Issue 2026 Date, Price, Allotment, Ratio

IPO Watch, 27 Jan

Dr Lalchandani Labs Completes Rights Issue Allotment, Doubles Share Capital

scanx.trade, 02 Mar

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

Equitymaster, 15 Oct

Watch Items

Revenue growth is negative (-8.3%) on the latest reported period — check if this is one-off or a trend.
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

MiddlingProfitability

WeakBusiness Quality · Growth · Valuation · 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.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑