Gujarat Terce Laboratories Limited

Healthcare — Drug Manufacturers - Specialty & Generic · BSE

₹37.50−₹1.41 (−3.62%)

DalalBaazaar Score

63 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, but sales are shrinking. Whether sales start growing again is 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 Gujarat Terce Laboratories Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Gujarat Terce Laboratories Limited develops, manufactures, markets, and distributes medicines and healthcare products in India and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees234

Annual revenue₹47 Cr

How does it make money?

Turns over ₹47 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 234 employees supports ₹20.3 lakh of revenue a year, the signature of a people-led business.

EBITDA margin8.6%

Net margin4.6%

Revenue / employee₹20.3 lakh

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?Some evidence

ROCE of 23.4% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE23.4%

ROE22.6%

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 +1% while net margin moved -230% 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+1%

Margin effect-230%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 0.95 — 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

Quality vs. Valuation

Company Quality

63/ 100

Average

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

Valuation

85/ 100

Cheap

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

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

14.2x

2Y Median

138.6x

28 monthly readings · mean 141.1x · range 12.4x–266.9x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 90% below its 2y median of 138.6x. 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 58% below the peer median of 33.3x.

vs. its own history

Cheap

138.6x median over 28 months · -90%

vs. sector peers

Cheap

33.3x median of 4 peers · -58%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

14.2x

P/B

3.00x

EV/EBITDA

6.8x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well8

Margins are improving
EBITDA margin is up from -3.8% to 8.6% over 3 years.
Debt is being paid down
Total debt is down 82% 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 -24.4% to 22.6%.
Return on capital is rising
ROCE has improved from -18.7% to 23.4%.
High return on capital employed
ROCE of 23.4% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 14.2x the stock trades 90% below its own median of 138.6x.
Very low debt
Debt/Equity of 0.13x 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

1 item require attention · 1 high

🔴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.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 23.4% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from -3.8% to 8.6%. 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 82% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 90% 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 58% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Growth barely outpaces inflation
Revenue compounding at 0.5% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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 7%✓ 8.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✗ 0.5% CAGR
Latest reported year was -17.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹2 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 20%✓ 23.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

7 good · 3 neutral · 1 weak

Market Cap

₹29 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.2x

Cheap

Cheap against the generic band

P/B Ratio

3.00x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹2.65

Profitable

Profitable on a per-share basis

ROE

22.6%

Strong

Strong capital efficiency

ROCE

23.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.13x

Low

Conservative leverage

Revenue Growth (YoY)

-17.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

325.0%

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

CMP

₹37.5

Operating Margin

-6.7%

Weak

Thin margins leave little room for error

Net Margin

4.5%

Average

Average bottom-line conversion

Current Ratio

1.32

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.95

Market-like

Moves roughly in line with the market

52W Range Position

35%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

37.6 / 38.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

43.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹47 Cr	₹48 Cr	₹50 Cr	₹47 Cr	+0.5%
EBITDA	-₹2 Cr	₹2 Cr	₹4 Cr	₹4 Cr	—
EBITDA Margin	-3.8%	3.3%	8.3%	8.6%	—
PAT (Net Profit)	-₹2 Cr	₹0 Cr	-₹1 Cr	₹2 Cr	—
EPS	₹-2.25	₹0.33	₹-1.32	₹2.92	—
ROE	-24.4%	3.4%	-15.1%	22.6%	—
ROCE	-18.7%	10.5%	36.8%	23.4%	—
Total Debt	₹7 Cr	₹4 Cr	₹1 Cr	₹1 Cr	-43.7%
Free Cash Flow	-₹0 Cr	₹3 Cr	₹3 Cr	₹2 Cr	—

🟡 Revenue has been broadly flat over 3 years (0.5% a year).

🟢 EBITDA has turned positive, from -₹2 Cr to ₹4 Cr.

🟢 EBITDA Margin has risen from -3.8% to 8.6% over 3 years (+12.5 pts).

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

🟢 EPS has turned positive, from ₹-2.25 to ₹2.92.

🟢 ROE has risen from -24.4% to 22.6% over 3 years (+47.0 pts).

🟢 ROCE has risen from -18.7% to 23.4% over 3 years (+42.1 pts).

🟢 Total Debt has shrunk at 43.7% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹0 Cr to ₹2 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹25 Cr

Total Liabilities

₹15 Cr

Total Debt

₹1 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹2 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

45.7%

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 positive4 mixed1 general

Gujarat Terce Laboratories Q1 Results: Net Loss Widens To ₹17.81 Lakh

scanx.trade, 07 AugResults

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

Ishita Drugs and Industries (BSE:524400) - Stock Analysis

Simply Wall Street, 10 Oct

Gujarat Terce Laboratories Q1 Results: Net profit rises 12% YoY to ₹205 crore

scanx.trade, 30 JulResults

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

Q1 results: SBI, Hindalco, Titan Company, BEML, and 202 more on Aug 7

Business Standard, 07 AugResults

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

Gujarat Terce Laboratories Board Meeting Scheduled for May 27, 2026 to Approve FY26 Annual Financial Results

scanx.trade, 13 MayResults

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

Q3 Results Today: Bajaj Finserv, JSW Cement, Tata Power, Trent Among Over 140 Companies To Declare Earnings On Feb. 4

NDTV Profit, 04 FebResults

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

Watch Items

Revenue growth is negative (-17.1%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate12.4/20

🟢Financial HealthStrong16.6/20

🔴GrowthWeak7.6/20

🟢ProfitabilityStrong10.6/15

🟢ValuationAttractive11.8/15

🔴RiskHigh3.6/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 7%8.6%
✗Revenue growth stays above 4% a year0.5% CAGR
✓Free cash flow remains positive₹2 Cr
✓Debt / EBITDA stays below 2x0.3x
✓ROCE stays above 20%23.4%