Nectar Lifesciences Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹10.54+₹0.50 (+4.98%)

DalalBaazaar Score

41 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Cash generation is currently 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 Nectar Lifesciences Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Nectar Lifesciences Limited manufactures, distributes, markets and sells pharmaceutical products in India and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees111

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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of -14.8% 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 ROE14.5%

DalalBaazaar Score

41/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of -14.8% is below 10% — capital is not working hard
✗ ROCE has fallen by 17.9 points — returns are eroding
✗ The business is lossmaking at the net level

Quality vs. Valuation

Company Quality

35/ 100

Weak

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

Valuation

72/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

30.1x

2Y Median

74.6x

28 monthly readings · mean 92.1x · range 42.3x–184.2x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 60% below its 2y median of 74.6x. 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 is priced broadly in line with the peer median of 33.3x.

vs. its own history

Cheap

74.6x median over 28 months · -60%

vs. sector peers

Fair

33.3x median of 4 peers · -10%

vs. generic bands

Fair

15x–35x

EV/EBITDA

—

PEG

—

What's Good / What's Bad

🟢 What's Going Well0

Nothing stands out as clearly improving on the years of data available.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from -2.3% to -50.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 3.1% to -14.8% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -596.8x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹293 Cr in the latest reported year.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 1.2x to -596.8x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹429 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 60% 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.

🔴 Bear CaseWhat could go wrong?

Returns on shareholder capital are falling
ROE has dropped from -2.3% to -50.3%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
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
2 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

1Free cash flow remains positive✗ -₹429 Cr
Profit that never becomes cash eventually stops being profit.
2Interest cover stays above 3x✗ -596.8x
How much operating profit can fall before interest stops being comfortably covered.
3ROCE stays above 8%✗ -14.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
4Valuation vs its own median of 74.6x✓ 30.1x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

3 / 10 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ 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 · 4 neutral · 5 weak

Market Cap

₹205 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

30.1x

Fair

Fairly valued against the generic band

P/B Ratio

0.36x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.35

Profitable

Profitable on a per-share basis

ROE

-50.3%

Weak

Weak capital efficiency

ROCE

-14.8%

Weak

Low return on total capital employed

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

-100.0%

Shrinking

Sales are contracting

Profit Growth (YoY)

-157.6%

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

-₹429 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

3.5x

Improving

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

Operating Margin

-168707.6%

Weak

Thin margins leave little room for error

Net Margin

0.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

8.40

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.66

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

10.6 / 11.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

44.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,524 Cr	₹1,684 Cr	—	—	—
EBITDA	₹59 Cr	₹168 Cr	₹63 Cr	-₹13 Cr	—
EBITDA Margin	3.9%	10.0%	—	—	—
PAT (Net Profit)	-₹24 Cr	₹5 Cr	-₹114 Cr	-₹293 Cr	—
EPS	₹-1.08	₹0.22	₹-5.07	₹-13.4	—
ROE	-2.3%	0.5%	-11.9%	-50.3%	—
ROCE	3.1%	8.9%	0.1%	-14.8%	—
Total Debt	₹754 Cr	₹636 Cr	₹582 Cr	—	—
Free Cash Flow	₹104 Cr	₹195 Cr	₹126 Cr	-₹429 Cr	—

🔴 EBITDA has turned negative, from ₹59 Cr to -₹13 Cr.

🔴 ROE has fallen from -2.3% to -50.3% over 3 years (-48.0 pts).

🔴 ROCE has fallen from 3.1% to -14.8% over 3 years (-17.9 pts).

🔴 Free Cash Flow has turned negative, from ₹104 Cr to -₹429 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹622 Cr

Total Liabilities

₹39 Cr

Cash & Equivalents

₹112 Cr

Operating Cash Flow

-₹417 Cr

Capex

-₹12 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

55.7%

Corporate Actions

Ex-Dividend Date

11 Sept 2020

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

2 positive1 mixed3 general

Nectar Lifesciences Share Price Forecast: 3 Year Outlook to 2030

Univest, 22 Jul

The Market Doesn't Like What It Sees From Nectar Lifesciences Limited's (NSE:NECLIFE) Revenues Yet As Shares Tumble 25%

Simply Wall Street, 10 FebPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Nectar Lifesciences Approves ₹81 Crore Share Buyback, Fixes December 24 as Record Date

India Infoline, 04 DecCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Nectar Lifesciences shares jump 20% as firm’s board set to consider share buyback on Dec 3

Moneycontrol.com, 28 NovCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Nectar Lifesciences Extends Empty Hard Gelatin Capsule Business Sale Completion to July 31, 2026

scanx.trade, 28 Apr

Nectar Lifesciences Upper Circuit Today: Price, Data and Peers

Univest, 06 Oct

Watch Items

Revenue growth is negative (-100.0%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

StrongValuation

MiddlingGrowth

WeakBusiness Quality · Financial Health · Profitability · Risk

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 2 high-severity red flags sit above this conclusion and should be read first.

3 of 4 tripwires tripped — Free cash flow remains positive; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑