Kilitch Drugs (India) Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹229.21−₹6.99 (−2.96%)

DalalBaazaar Score

65 / 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 Kilitch Drugs (India) Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Kilitch Drugs (India) Limited engages in the development and operation of the pharmaceutical business in India and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees236

Annual revenue₹235 Cr

How does it make money?

Turns over ₹235 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 236 employees supports ₹99.7 lakh of revenue a year, the signature of a people-led business.

EBITDA margin18.8%

Net margin12.8%

Revenue / employee₹99.7 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?Little sign of one

Returns on capital of 13.2% 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.

ROCE13.2%

ROE10.8%

Peer median ROE14.5%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +69% while net margin moved +70% 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+69%

Margin effect+70%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.31 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

67/ 100

Good

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

Valuation

73/ 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

26.0x

3Y Median

35.0x

40 monthly readings · mean 35.6x · range 15.3x–64.9x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 26% below its 3y median of 35.0x. 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 22% below the peer median of 33.3x.

vs. its own history

Cheap

35.0x median over 40 months · -26%

vs. sector peers

Cheap

33.3x median of 4 peers · -22%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

26.0x

P/B

2.87x

EV/EBITDA

19.8x

PEG

0.61

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 14.2% to 18.8% over 3 years.
Return on equity is rising
ROE has improved from 6.9% to 10.8%.
Valuation below its historical average
At 26.0x the stock trades 26% below its own median of 35.0x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Debt is rising
Total debt is up 300% 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 121% against revenue growth of 69% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 398% against revenue growth of 69% — stock may not be moving.

Red Flags

4 items require attention · 4 high

🔴Debt has risen sharplyFinancial
Total debt is up 300% over 3 years, from ₹22 Cr to ₹89 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.
🔴Receivables growing faster than salesFinancial
Receivables up 121% against revenue up 69% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 398% against revenue up 69% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 14.2% to 18.8%. 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 26% 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 22% 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 121% against revenue up 69%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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 14% a year✓ 19.2% CAGR
Latest reported year was 4.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 17%✓ 18.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.0x
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 10%✓ 13.2%
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

2 good · 7 neutral · 2 weak

Market Cap

₹801 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

26.0x

Fair

Fairly valued against the generic band

P/B Ratio

2.87x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹8.8

Profitable

Profitable on a per-share basis

ROE

10.8%

Moderate

Moderate capital efficiency

ROCE

13.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.32x

Low

Conservative leverage

Revenue Growth (YoY)

4.0%

Modest

Modest growth

Profit Growth (YoY)

-11.7%

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

₹229.21

P/E (Forward)

15.0x

Improving

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

Operating Margin

4.1%

Weak

Thin margins leave little room for error

Net Margin

12.7%

Good

Strong bottom-line conversion

Current Ratio

1.83

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.31

Defensive

Steadier than the market

52W Range Position

74%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

227.0 / 198.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

53.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹139 Cr	₹154 Cr	₹197 Cr	₹235 Cr	+19.2%
EBITDA	₹20 Cr	₹27 Cr	₹39 Cr	₹44 Cr	+31.0%
EBITDA Margin	14.2%	17.7%	19.6%	18.8%	—
PAT (Net Profit)	₹10 Cr	₹15 Cr	₹27 Cr	₹30 Cr	+42.4%
EPS	₹3.28	₹4.49	₹8.12	₹8.91	+39.5%
ROE	6.9%	8.3%	13.2%	10.8%	—
ROCE	11.2%	14.4%	17.3%	13.2%	—
Total Debt	₹22 Cr	₹32 Cr	₹49 Cr	₹89 Cr	+58.7%
Free Cash Flow	-₹1 Cr	-₹8 Cr	-₹29 Cr	-₹76 Cr	—

🟢 Revenue has grown at 19.2% a year over 3 years.

🟢 EBITDA has grown at 31.0% a year over 3 years.

🟢 EBITDA Margin has risen from 14.2% to 18.8% over 3 years (+4.6 pts).

🟢 PAT (Net Profit) has grown at 42.4% a year over 3 years.

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

🟢 ROE has risen from 6.9% to 10.8% over 3 years (+3.9 pts).

🟢 ROCE has risen from 11.2% to 13.2% over 3 years (+1.9 pts).

🔴 Total Debt has grown at 58.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹458 Cr

Total Liabilities

₹181 Cr

Total Debt

₹89 Cr

Cash & Equivalents

₹16 Cr

Operating Cash Flow

₹24 Cr

Capex

-₹100 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

71.8%

Corporate Actions

Ex-Dividend Date

20 Sept 2019

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 mixed4 general

Kilitch Drugs (India) Ltd. Share Price Rise Streak and

Univest, 06 OctPrice 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.

Kilitch Drugs (India) Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 27 Aug

Kilitch Drugs (India) Ltd. Lower Circuit Today: Price, Data and Peers

Univest, 28 Sept

Kilitch Drugs (India) consolidated net profit rises 39.62% in the March 2026 quarter

Business Standard, 16 MayResults

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

Kilitch Drugs commences nutraceutical production at Raigad facility

scanx.trade, 17 Jun

SGRL Stock Price and Chart — NSE:SGRL

TradingView, 17 Aug

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate12/20

🟢Financial HealthStrong13/20

🟢GrowthStrong14.9/20

🟢ProfitabilityStrong10.7/15

🟡ValuationFair9.5/15

🔴RiskHigh4.4/10

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

This thesis breaks if

✓Revenue growth stays above 14% a year19.2% CAGR
✓EBITDA margin holds above 17%18.8%
✗Debt / EBITDA stays below 2x2.0x
✗Free cash flow remains positive-₹76 Cr
✓ROCE stays above 10%13.2%