Entero Healthcare Solutions Limited

Healthcare — Medical Distribution · NSE

₹1,596.60+₹15.50 (+0.98%)

DalalBaazaar Score

62 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by small-cap size, which brings sharper price swings, 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, with both sales and profits growing well. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Entero Healthcare Solutions Limited engages in the trading of pharmaceutical and surgical products in India.

IndustryMedical Distribution

SectorHealthcare

Employees4,671

Annual revenue₹6,540 Cr

How does it make money?

Turns over ₹6,540 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 4,671 employees supports ₹1.40 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin4.2%

Net margin1.8%

Revenue / employee₹1.40 Cr

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.

SUN PHARMACEUTICAL IND LP/E 34.9x · ROE 14.5%

CIPLA LTDP/E 31.8x · ROE 9.8%

DR. REDDY S LABORATORIESP/E 31.0x · ROE 8.8%

APOLLO HOSPITALS ENTER. LP/E 54.3x · ROE 22.0%

What is its competitive advantage?Little sign of one

Returns on capital of 11.3% 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.

ROCE11.3%

ROE6.8%

Peer median ROE14.5%

What is the outlook?

5 analysts covering the stock expect revenue to grow about 18.7% and earnings to grow about 40.7% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+18.7%

Est. earnings growth+40.7%

Analysts5

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +99% while net margin moved -601% 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+99%

Margin effect-601%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 55.5x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 64.7x

Quality vs. Valuation

Company Quality

67/ 100

Good

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

Valuation

41/ 100

Expensive

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

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

55.5x

2Y Median

64.7x

28 monthly readings · mean 83.1x · range 47.2x–131.7x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 14% below its 2y median of 64.7x. 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 66% above the peer median of 33.3x.

vs. its own history

Fair

64.7x median over 28 months · -14%

vs. sector peers

Expensive

33.3x median of 4 peers · +66%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

55.5x

P/B

4.11x

EV/EBITDA

27.2x

PEG

1.49

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 2.0% to 4.2% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from -1.9% to 6.8%.
Return on capital is rising
ROCE has improved from 5.9% to 11.3%.

🔴 What Needs Attention3

Debt is rising
Total debt is up 55% over 3 years — worth checking what it funded.
Receivables growing faster than sales
Receivables are up 135% against revenue growth of 99% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 146% against revenue growth of 99% — stock may not be moving.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 55% over 3 years, from ₹438 Cr to ₹677 Cr.
🟡Receivables growing faster than salesFinancial
Receivables up 135% against revenue up 99% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 146% against revenue up 99% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 2.0% to 4.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹29 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 135% against revenue up 99%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 66% above the peer median. That premium needs a reason that persists, or it closes.
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
Small 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

1Revenue growth stays above 19% a year✓ 25.7% CAGR
Latest reported year was 38.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 4.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✓ ₹29 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✓ 11.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 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
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 4 neutral · 2 weak

Market Cap

₹6,956 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

55.5x

Expensive

Expensive — verify against sector peers

P/B Ratio

4.11x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹28.78

Profitable

Profitable on a per-share basis

ROE

6.8%

Weak

Weak capital efficiency

ROCE

11.3%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.39x

Low

Conservative leverage

Revenue Growth (YoY)

38.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

37.3%

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

₹29 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹1,596.6

P/E (Forward)

27.8x

Improving

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

Operating Margin

4.4%

Weak

Thin margins leave little room for error

Net Margin

1.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.58

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.49

Defensive

Steadier than the market

52W Range Position

67%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1717.2 / 1654.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

13.7

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,293 Cr	₹3,888 Cr	₹5,065 Cr	₹6,540 Cr	+25.7%
EBITDA	₹65 Cr	₹121 Cr	₹207 Cr	₹276 Cr	+61.9%
EBITDA Margin	2.0%	3.1%	4.1%	4.2%	—
PAT (Net Profit)	-₹12 Cr	₹39 Cr	₹95 Cr	₹115 Cr	—
EPS	₹-2.66	₹10.81	₹21.76	₹26.4	—
ROE	-1.9%	2.4%	5.5%	6.8%	—
ROCE	5.9%	5.5%	9.5%	11.3%	—
Total Debt	₹438 Cr	₹338 Cr	₹385 Cr	₹677 Cr	+15.7%
Free Cash Flow	-₹51 Cr	-₹42 Cr	-₹88 Cr	₹29 Cr	—

🟢 Revenue has grown at 25.7% a year over 3 years.

🟢 EBITDA has grown at 61.9% a year over 3 years.

🟢 EBITDA Margin has risen from 2.0% to 4.2% over 3 years (+2.2 pts).

🟢 PAT (Net Profit) has turned positive, from -₹12 Cr to ₹115 Cr.

🟢 EPS has turned positive, from ₹-2.66 to ₹26.4.

🟢 ROE has risen from -1.9% to 6.8% over 3 years (+8.8 pts).

🟢 ROCE has risen from 5.9% to 11.3% over 3 years (+5.4 pts).

🔴 Total Debt has grown at 15.7% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹51 Cr to ₹29 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,600 Cr

Total Liabilities

₹1,848 Cr

Total Debt

₹677 Cr

Cash & Equivalents

₹147 Cr

Operating Cash Flow

₹96 Cr

Capex

-₹68 Cr

Shareholding (proxy)

Institutional Holding

24.5%

Insider Holding

64.7%

Analyst Consensus

Recommendations

5 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹1,844.4

+15.5% vs CMP

Target Range

₹1,590 – ₹2,132

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

3 mixed3 general

Entero Healthcare Solutions (NSEI:ENTERO) Stock Forecast & Analyst Predictions

Simply Wall Street, 08 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

ENTERO Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Compare with VINTRON INFORM

Equitymaster, 15 Oct

Entero Healthcare shares gain 15% in 2 days after Prashant Jain’s 3P Investment picks stake in block deal

The Economic Times, 25 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Entero Healthcare Solutions: Best Stock in Sector? Key Metrics

Univest, 25 Sept

Prashant Jain-backed 3P Investment buys 2.5% Stake in Entero Healthcare; Amansa sells over Rs 47 crore...

Moneycontrol.com, 24 Aug

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

🟡Business QualityAdequate10.2/20

🟢Financial HealthStrong14.4/20

🟢GrowthStrong18.4/20

🟡ProfitabilityModerate7.1/15

🟡ValuationFair6.9/15

🟡RiskModerate4.9/10

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 19% a year25.7% CAGR
✓EBITDA margin holds above 2%4.2%
✗Debt / EBITDA stays below 2x2.5x
✓Free cash flow remains positive₹29 Cr
✓ROCE stays above 8%11.3%