Eiko LifeSciences Limited

Basic Materials — Specialty Chemicals · BSE

₹49.00−₹0.18 (−0.37%)

DalalBaazaar Score

70 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by high debt relative to equity, 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, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Eiko LifeSciences Limited, together with its subsidiary, manufactures and supplies specialty chemicals, fine chemicals, and active pharmaceutical ingredients in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees7

Annual revenue₹46 Cr

How does it make money?

Turns over ₹46 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹18 left at the operating level before interest, tax and depreciation. Each of its 7 employees supports ₹6.61 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹6.61 Cr

Who are its competitors?

The closest listed comparisons in its industry are ASIAN PAINTS LIMITED, PIDILITE INDUSTRIES LTD, SRF LTD, UPL LIMITED. 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 10.1% 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 ROE22.3%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +153% while net margin moved +132% 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+153%

Margin effect+132%

DalalBaazaar Score

70/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.23 — historically steadier than the index
✗ 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

Quality vs. Valuation

Company Quality

70/ 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

14.9x

3Y Median

67.4x

40 monthly readings · mean 56.4x · range 14.8x–92.9x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 78% below its 3y median of 67.4x. 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 63% below the peer median of 40.4x.

vs. its own history

Cheap

67.4x median over 40 months · -78%

vs. sector peers

Cheap

40.4x median of 4 peers · -63%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.5x

PEG

0.19

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 9.7% to 18.3% over 3 years.
Return on equity is rising
ROE has improved from 2.6% to 6.5%.
Return on capital is rising
ROCE has improved from 3.9% to 10.1%.
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

6 items require attention · 4 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 8725% over 3 years, from ₹0 Cr to ₹5 Cr.
🔴High leverageFinancial
Debt/Equity of 6.78x — earnings must service borrowings before shareholders see anything.
🔴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.
🔴Inventory building faster than salesFinancial
Inventory up 338% against revenue up 153% — stock may not be moving.
🟡Receivables growing faster than salesFinancial
Receivables up 185% against revenue up 153% — sales are being booked faster than they are collected.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 49% 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 9.7% to 18.3%. 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 78% 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 63% 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 6.78x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 185% against revenue up 153%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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
4 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 27% a year✓ 36.2% CAGR
Latest reported year was 56.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 16%✓ 18.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹2 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 10.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 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 · 3 neutral · 2 weak

Market Cap

₹72 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.9x

Cheap

Cheap against the generic band

P/B Ratio

1.02x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹3.28

Profitable

Profitable on a per-share basis

ROE

6.5%

Weak

Weak capital efficiency

ROCE

10.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

6.78x

High

High leverage

Revenue Growth (YoY)

56.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

15.2%

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

₹2 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

10.1%

Average

Average margins

Net Margin

8.3%

Average

Average bottom-line conversion

Current Ratio

3.08

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.23

Defensive

Steadier than the market

52W Range Position

28%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

48.5 / 47.7

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

39.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹18 Cr	₹28 Cr	₹36 Cr	₹46 Cr	+36.2%
EBITDA	₹2 Cr	₹2 Cr	₹4 Cr	₹8 Cr	+68.2%
EBITDA Margin	9.7%	6.4%	10.0%	18.3%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹2 Cr	₹4 Cr	+80.2%
EPS	₹0.79	₹0.73	₹1.62	₹3.19	+59.2%
ROE	2.6%	1.5%	3.7%	6.5%	—
ROCE	3.9%	2.2%	5.4%	10.1%	—
Total Debt	₹0 Cr	—	₹3 Cr	₹5 Cr	+345.2%
Free Cash Flow	₹4 Cr	-₹7 Cr	-₹8 Cr	₹2 Cr	-17.4%

🟢 Revenue has grown at 36.2% a year over 3 years.

🟢 EBITDA has grown at 68.2% a year over 3 years.

🟢 EBITDA Margin has risen from 9.7% to 18.3% over 3 years (+8.6 pts).

🟢 PAT (Net Profit) has grown at 80.2% a year over 3 years.

🟢 EPS has grown at 59.2% a year over 3 years.

🟢 ROE has risen from 2.6% to 6.5% over 3 years (+3.9 pts).

🟢 ROCE has risen from 3.9% to 10.1% over 3 years (+6.1 pts).

🔴 Total Debt has grown at 345.2% a year over 3 years.

🔴 Free Cash Flow has shrunk at 17.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹89 Cr

Total Liabilities

₹20 Cr

Cash & Equivalents

₹14 Cr

Operating Cash Flow

₹2 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

67.0%

Corporate Actions

Ex-Dividend Date

20 Sept 2017

Peer Comparison

Company	P/E	ROE
ASIAN PAINTS LIMITED	46.9x	22.3%
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

2 positive4 general

Eiko Lifesciences Allots 1.5 Lakh Shares to Promoter Lenus Finvest

Whalesbook, 16 Oct

Eiko Lifesciences net profit up 35% in Q1FY27 to ₹150.83 lakh

scanx.trade, 12 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Eiko LifeSciences FY26 net profit jumps 106% to ₹358.11 lakh

scanx.trade, 26 MayResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Eiko Lifesciences: Promoter Bhavesh Tanna Acquires 3.14% Stake via Preferential Issue

scanx.trade, 24 Feb

Eiko Lifesciences acquires 25.01% stake in Reflux Pharmaceuticals

Business Standard, 18 May

Shakti Pumps rises 5% after ₹71.25 Cr solar water pump order

Alice Blue, 15 Dec

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Valuation

MiddlingFinancial Health · Profitability

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

All 5 tripwires holding · see Key things to watch ↑