Nephrocare Health Services Limited

Healthcare — Medical Care Facilities · NSE

₹616.00+₹4.35 (+0.71%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, 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. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Nephrocare Health Services Limited provides dialysis healthcare services through a chain of kidney care clinics and dialysis centers in India, Uzbekistan, Nepal, and the Philippines.

IndustryMedical Care Facilities

SectorHealthcare

Employees2,294

Annual revenue₹994 Cr

How does it make money?

Turns over ₹994 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹24 left at the operating level before interest, tax and depreciation. Each of its 2,294 employees supports ₹43.4 lakh of revenue a year, the signature of a people-led business.

EBITDA margin24.0%

Net margin7.7%

Revenue / employee₹43.4 lakh

Who are its competitors?

The closest listed comparisons in its industry are APOLLO HOSPITALS ENTER. L, SUN PHARMACEUTICAL IND L, CIPLA LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

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

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

CIPLA LTDP/E 31.8x · ROE 9.8%

What is its competitive advantage?Little sign of one

Returns on capital of 13.3% 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.

ROCE13.3%

ROE6.9%

Peer median ROE14.5%

What is the outlook?

5 analysts covering the stock expect revenue to grow about 19.7% and earnings to grow about 31.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+19.7%

Est. earnings growth+31.4%

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 +140% while net margin moved -372% 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+140%

Margin effect-372%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

66/ 100

Good

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

Valuation

32/ 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

72.6x

1.0Y Median

81.5x

12 monthly readings · mean 83.6x · range 70.1x–101.9x

Sector Median

34.9x

median of 3 sector peers

🟢Current valuation is approximately 11% below its 1.0y median of 81.5x. 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 108% above the peer median of 34.9x.

vs. its own history

Fair

81.5x median over 12 months · -11%

vs. sector peers

Expensive

34.9x median of 3 peers · +108%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

72.6x

P/B

5.54x

EV/EBITDA

25.8x

PEG

4.78

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 13.2% to 24.0% over 3 years.
Debt is being paid down
Total debt is down 63% 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 -3.0% to 6.9%.
Return on capital is rising
ROCE has improved from 1.2% to 13.3%.

🔴 What Needs Attention0

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

Red Flags

2 items require attention · 1 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 7.14x — earnings must service borrowings before shareholders see anything.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 5.6x to 2.7x.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 13.2% to 24.0%. 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 63% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 7.14x. Interest is payable whether or not the business has a good year.
A premium to the sector to defend
It trades 108% 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 25% a year✓ 33.9% CAGR
Latest reported year was 23.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 22%✓ 24.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Interest cover stays above 3x✗ 2.7x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹113 Cr
Profit that never becomes cash eventually stops being profit.
5Debt / EBITDA stays below 2x✓ 0.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

Investment Checklist

6 / 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

4 good · 3 neutral · 4 weak

Market Cap

₹6,194 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

72.6x

Expensive

Expensive — verify against sector peers

P/B Ratio

5.54x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹8.48

Profitable

Profitable on a per-share basis

ROE

6.9%

Weak

Weak capital efficiency

ROCE

13.3%

Moderate

Moderate return on the capital in the business

Debt/Equity

7.14x

High

High leverage

Revenue Growth (YoY)

23.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

15.2%

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

₹113 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹616

P/E (Forward)

30.8x

Improving

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

Operating Margin

14.0%

Average

Average margins

Net Margin

8.1%

Average

Average bottom-line conversion

Current Ratio

2.80

Comfortable

Healthy short-term liquidity

52W Range Position

51%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

664.0 / 688.2

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

12.9

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹415 Cr	₹540 Cr	₹748 Cr	₹994 Cr	+33.9%
EBITDA	₹55 Cr	₹113 Cr	₹182 Cr	₹238 Cr	+63.3%
EBITDA Margin	13.2%	20.9%	24.3%	24.0%	—
PAT (Net Profit)	-₹12 Cr	₹35 Cr	₹67 Cr	₹77 Cr	—
EPS	₹-1.17	₹3.5	₹6.69	₹8.1	—
ROE	-3.0%	8.5%	11.5%	6.9%	—
ROCE	1.2%	9.3%	14.9%	13.3%	—
Total Debt	₹214 Cr	₹268 Cr	₹258 Cr	₹80 Cr	-28.0%
Free Cash Flow	-₹62 Cr	-₹8 Cr	₹35 Cr	₹113 Cr	—

🟢 Revenue has grown at 33.9% a year over 3 years.

🟢 EBITDA has grown at 63.3% a year over 3 years.

🟢 EBITDA Margin has risen from 13.2% to 24.0% over 3 years (+10.8 pts).

🟢 PAT (Net Profit) has turned positive, from -₹12 Cr to ₹77 Cr.

🟢 EPS has turned positive, from ₹-1.17 to ₹8.1.

🟢 ROE has risen from -3.0% to 6.9% over 3 years (+9.9 pts).

🟢 ROCE has risen from 1.2% to 13.3% over 3 years (+12.0 pts).

🟢 Total Debt has shrunk at 28.0% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹62 Cr to ₹113 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,471 Cr

Total Liabilities

₹354 Cr

Total Debt

₹80 Cr

Cash & Equivalents

₹124 Cr

Operating Cash Flow

₹233 Cr

Capex

-₹119 Cr

Shareholding (proxy)

Institutional Holding

39.9%

Insider Holding

49.3%

Analyst Consensus

Recommendations

5 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹836

+35.7% vs CMP

Target Range

₹755 – ₹1,000

Peer Comparison

Company	P/E	ROE
APOLLO HOSPITALS ENTER. L	54.3x	22.0%
SUN PHARMACEUTICAL IND L	34.9x	14.5%
CIPLA LTD	31.8x	9.8%

Recent News

3 mixed3 general

NEPHROPLUS Stock Price and Chart — NSE:NEPHROPLUS

TradingView, 17 May

Nephrocare shares tumble 5% | What’s driving the decline?

Livemint, 24 SeptPrice 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.

Nephrocare Health Services Ltd | Stock Share Price Live

MarketSmith India, 28 Apr

Nephrocare Health Services Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Simply Wall Street, 15 AugAnalyst view

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

Nephrocare Health Services Block Deal: Investors likely to sell 9% stake at ₹705/share

CNBC TV18, 23 Sept

NEPHROPLUS Share Price Falls 5.13%: Price Action View

Univest, 24 SeptPrice 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.

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 QualityStrong14.5/20

🟢Financial HealthStrong13.3/20

🟢GrowthStrong13/20

🟡ProfitabilityModerate8.3/15

🔴ValuationDemanding5.3/15

🔴RiskHigh2.9/10

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 25% a year33.9% CAGR
✓EBITDA margin holds above 22%24.0%
✗Interest cover stays above 3x2.7x
✓Free cash flow remains positive₹113 Cr
✓Debt / EBITDA stays below 2x0.3x