Neuland Laboratories Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹19,695.00−₹260.00 (−1.30%)

DalalBaazaar Score

73 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Low

Driven by negative free cash flow, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:44 pm

Understanding the Business

Company site ↗

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

What does this company do?

Neuland Laboratories Limited engages in the manufacture and sale of active pharmaceutical ingredients (APIs) in India, Europe, the United States, and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees2,183

Annual revenue₹1,932 Cr

How does it make money?

Turns over ₹1,932 Cr a year. Of every ₹100 of sales, about ₹19 reaches shareholders as profit, with ₹31 left at the operating level before interest, tax and depreciation. Each of its 2,183 employees supports ₹88.5 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹88.5 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.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 22.9%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 19.4% against a peer median of 14.5% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE14.5%

What is the outlook?

5 analysts covering the stock expect revenue to grow about 20.2% and earnings to grow about 33.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+20.2%

Est. earnings growth+33.9%

Analysts5

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 +66% while net margin moved +34% 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+66%

Margin effect+34%

DalalBaazaar Score

73/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 50.8x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 59.6x
✗ P/B of 13.48x is a steep premium to book

Quality vs. Valuation

Company Quality

83/ 100

Excellent

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

Valuation

35/ 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

50.8x

3Y Median

59.6x

40 monthly readings · mean 60.9x · range 28.9x–93.9x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 15% below its 3y median of 59.6x. 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 52% above the peer median of 33.3x.

vs. its own history

Fair

59.6x median over 40 months · -15%

vs. sector peers

Expensive

33.3x median of 4 peers · +52%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

42.7x

PEG

1.66

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 23.8% to 30.9% over 3 years.
Return on capital is rising
ROCE has improved from 19.8% to 22.9%.
High return on capital employed
ROCE of 22.9% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.16x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 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

🔴Debt has risen sharplyFinancial
Total debt is up 135% over 3 years, from ₹128 Cr to ₹301 Cr.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹50 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 22.9% 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 23.8% to 30.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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?

A premium to the sector to defend
It trades 52% above the peer median. That premium needs a reason that persists, or it closes.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 14% a year✓ 18.5% CAGR
Latest reported year was 119.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 29%✓ 30.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹50 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 20%✓ 22.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

6 good · 2 neutral · 3 weak

Market Cap

₹25,268 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

50.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

13.48x

Rich

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

EPS (TTM)

₹387.97

Profitable

Profitable on a per-share basis

ROE

19.4%

Strong

Strong capital efficiency

ROCE

22.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.16x

Low

Conservative leverage

Revenue Growth (YoY)

119.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

962.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.17%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹50 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

40.6x

Improving

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

Operating Margin

30.6%

Good

Healthy core-business profitability

Net Margin

21.0%

Good

Strong bottom-line conversion

Current Ratio

2.09

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.28

Defensive

Steadier than the market

52W Range Position

64%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

21402.5 / 22395.4

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

16.7

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,161 Cr	₹1,516 Cr	₹1,434 Cr	₹1,932 Cr	+18.5%
EBITDA	₹276 Cr	₹472 Cr	₹341 Cr	₹597 Cr	+29.3%
EBITDA Margin	23.8%	31.2%	23.8%	30.9%	—
PAT (Net Profit)	₹164 Cr	₹300 Cr	₹260 Cr	₹364 Cr	+30.6%
EPS	₹127.45	₹233.89	₹202.74	₹283.71	+30.6%
ROE	16.4%	23.4%	17.1%	19.4%	—
ROCE	19.8%	29.4%	20.5%	22.9%	—
Total Debt	₹128 Cr	₹95 Cr	₹157 Cr	₹301 Cr	+32.9%
Free Cash Flow	₹171 Cr	₹118 Cr	₹111 Cr	-₹50 Cr	—

🟢 Revenue has grown at 18.5% a year over 3 years.

🟢 EBITDA has grown at 29.3% a year over 3 years.

🟢 EBITDA Margin has risen from 23.8% to 30.9% over 3 years (+7.1 pts).

🟢 PAT (Net Profit) has grown at 30.6% a year over 3 years.

🟢 EPS has grown at 30.6% a year over 3 years.

🟢 ROE has risen from 16.4% to 19.4% over 3 years (+3.0 pts).

🟢 ROCE has risen from 19.8% to 22.9% over 3 years (+3.0 pts).

🔴 Total Debt has grown at 32.9% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹171 Cr to -₹50 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,930 Cr

Total Liabilities

₹1,056 Cr

Cash & Equivalents

₹77 Cr

Operating Cash Flow

₹347 Cr

Capex

-₹397 Cr

Shareholding (proxy)

Institutional Holding

28.0%

Insider Holding

37.7%

Corporate Actions

Dividend Rate

₹34

Ex-Dividend Date

24 Jul 2026

Analyst Consensus

Recommendations

4 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹24,678.5

+25.3% vs CMP

Target Range

₹24,100 – ₹25,819

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

4 mixed2 general

NEULANDLAB Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

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

Mukul Agrawal portfolio: Neuland Labs soars 10%, hits new high; here's why

Business Standard, 06 Aug

How A Rs 276 Stock Turned Into A Rs 20,000 Multibagger: Do You Own It?

NDTV Profit, 13 Oct

Neuland Labs shares surge 10% after Q1 results better analyst expectations, strong commentary

CNBC TV18, 06 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.

Neuland Laboratories shares surge over 11%, hit record high on strong June quarter earnings

Upstox, 06 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.

Neuland Laboratories shares jump over 6% after 975% YoY surge in Q1 profit

The Economic Times, 06 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.

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

StrongBusiness Quality · Financial Health · Growth · Profitability

MiddlingRisk

WeakValuation

Points for each in the Score ↑

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.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑