Gennex Laboratories Limited

Healthcare — Drug Manufacturers - Specialty & Generic · BSE

₹9.03−₹0.25 (−2.69%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 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 Gennex Laboratories Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Gennex Laboratories Limited manufactures and sells bulk drugs, intermediates, and biotech products.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees125

Annual revenue₹173 Cr

How does it make money?

Turns over ₹173 Cr a year. Of every ₹100 of sales, about ₹12 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 125 employees supports ₹1.38 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin17.3%

Net margin12.1%

Revenue / employee₹1.38 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 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.

ROCE10.1%

ROE9.4%

Peer median ROE14.5%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +166% while net margin moved +60% 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+166%

Margin effect+60%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 1.06 — moves roughly with the market
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

65/ 100

Good

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

Valuation

84/ 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

11.7x

3Y Median

21.7x

40 monthly readings · mean 27.3x · range 9.1x–61.4x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 46% below its 3y median of 21.7x. 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 65% below the peer median of 33.3x.

vs. its own history

Cheap

21.7x median over 40 months · -46%

vs. sector peers

Cheap

33.3x median of 4 peers · -65%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

11.7x

P/B

0.99x

EV/EBITDA

9.8x

PEG

0.19

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 12.9% to 17.3% over 3 years.
Return on equity is rising
ROE has improved from 6.1% to 9.4%.
Return on capital is rising
ROCE has improved from 7.5% to 10.1%.
Valuation below its historical average
At 11.7x the stock trades 46% below its own median of 21.7x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Debt is rising
Total debt is up 358% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 363% against revenue growth of 166% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 243% against revenue growth of 166% — stock may not be moving.

Red Flags

6 items require attention · 5 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 358% over 3 years, from ₹17 Cr to ₹79 Cr.
🔴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.
🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 363% against revenue up 166% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 243% against revenue up 166% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 38% 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 12.9% to 17.3%. 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 46% 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 65% 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?

Sales are being booked faster than collected
Receivables are up 363% against revenue up 166%. 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
5 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 29% a year✓ 38.5% CAGR
Latest reported year was 16.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 15%✓ 17.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹76 Cr
Profit that never becomes cash eventually stops being profit.
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

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

5 good · 4 neutral · 2 weak

Market Cap

₹219 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

11.7x

Cheap

Cheap against the generic band

P/B Ratio

0.99x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.77

Profitable

Profitable on a per-share basis

ROE

9.4%

Moderate

Moderate capital efficiency

ROCE

10.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.34x

Low

Conservative leverage

Revenue Growth (YoY)

16.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-6.8%

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

-₹76 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹9.03

Operating Margin

9.6%

Average

Average margins

Net Margin

11.6%

Good

Strong bottom-line conversion

Current Ratio

3.66

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.06

Market-like

Moves roughly in line with the market

52W Range Position

19%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

9.8 / 10.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

23.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹65 Cr	₹79 Cr	₹138 Cr	₹173 Cr	+38.5%
EBITDA	₹8 Cr	₹21 Cr	₹27 Cr	₹30 Cr	+52.9%
EBITDA Margin	12.9%	27.0%	19.7%	17.3%	—
PAT (Net Profit)	₹5 Cr	₹13 Cr	₹18 Cr	₹21 Cr	+62.1%
EPS	₹0.32	₹0.61	₹0.78	₹0.87	+39.5%
ROE	6.1%	7.7%	9.7%	9.4%	—
ROCE	7.5%	10.3%	11.9%	10.1%	—
Total Debt	₹17 Cr	₹19 Cr	₹27 Cr	₹79 Cr	+66.0%
Free Cash Flow	-₹16 Cr	-₹47 Cr	-₹20 Cr	-₹76 Cr	—

🟢 Revenue has grown at 38.5% a year over 3 years.

🟢 EBITDA has grown at 52.9% a year over 3 years.

🟢 EBITDA Margin has risen from 12.9% to 17.3% over 3 years (+4.4 pts).

🟢 PAT (Net Profit) has grown at 62.1% a year over 3 years.

🟢 EPS has grown at 39.5% a year over 3 years.

🟢 ROE has risen from 6.1% to 9.4% over 3 years (+3.3 pts).

🟢 ROCE has risen from 7.5% to 10.1% over 3 years (+2.6 pts).

🔴 Total Debt has grown at 66.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹349 Cr

Total Liabilities

₹116 Cr

Total Debt

₹79 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

-₹64 Cr

Capex

-₹12 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

33.4%

Corporate Actions

Ex-Dividend Date

10 Sept 2001

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

1 positive1 mixed1 negative3 general

Gennex Laboratories Share Price Up 10.09%: Full Analysis

Univest, 21 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.

Gennex Laboratories promoter pledges shares for business loan

scanx.trade, 10 JunOwnership

🔴Potentially negativePromoter selling or pledging is a signal worth understanding, though the reason is often personal rather than about the business.

Gennex Laboratories Q1 Results: Revenue up 31%, net profit dips 4%

scanx.trade, 17 AugResults

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

Gennex Laboratories Ltd. Share Price and Pharma Stock Move

Univest, 17 Aug

GENNEX LABORATORIES LTD. Share Price

Upstox, 19 Mar

Gennex Laboratories closes trading window from July 01, 2026

scanx.trade, 23 Jun

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 QualityAdequate12/20

🟢Financial HealthStrong13/20

🟢GrowthStrong14.9/20

🟡ProfitabilityModerate9.4/15

🟢ValuationAttractive13.2/15

🔴RiskHigh3.5/10

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

This thesis breaks if

✓Revenue growth stays above 29% a year38.5% CAGR
✓EBITDA margin holds above 15%17.3%
✗Debt / EBITDA stays below 2x2.7x
✗Free cash flow remains positive-₹76 Cr
✓ROCE stays above 8%10.1%