NGL Fine-Chem Limited

Healthcare — Drug Manufacturers - General · NSE

₹2,770.00−₹36.30 (−1.29%)

DalalBaazaar Score

68 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

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, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

NGL Fine-Chem Limited develops and manufactures veterinary APIs, human APIs, intermediates, and finished dosage forms in India, Europe, the Asia Pacific, the United States, and internationally.

IndustryDrug Manufacturers - General

SectorHealthcare

Employees498

Annual revenue₹494 Cr

How does it make money?

Turns over ₹494 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 498 employees supports ₹99.2 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹99.2 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?Some evidence

ROCE of 17.2% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE14.5%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 15.0% in the year to 2021. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+15.0%

Analysts1

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 +81% while net margin moved +30% 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+81%

Margin effect+30%

DalalBaazaar Score

68/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 0.87 — 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
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

76/ 100

Good

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

Valuation

65/ 100

Fair

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

29.9x

3Y Median

44.0x

40 monthly readings · mean 47.9x · range 15.8x–95.4x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 32% below its 3y median of 44.0x. 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 is priced broadly in line with the peer median of 33.3x.

vs. its own history

Cheap

44.0x median over 40 months · -32%

vs. sector peers

Fair

33.3x median of 4 peers · -10%

vs. generic bands

Fair

15x–35x

EV/EBITDA

19.4x

PEG

0.91

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 14.6% to 19.1% over 3 years.
Return on equity is rising
ROE has improved from 9.2% to 14.6%.
Return on capital is rising
ROCE has improved from 12.5% to 17.2%.
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

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 277% over 3 years, from ₹32 Cr to ₹123 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Inventory building faster than salesFinancial
Inventory up 160% against revenue up 81% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 14.6% to 19.1%. 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 32% 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.
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?

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
3 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 16% a year✓ 21.8% CAGR
Latest reported year was 33.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 17%✓ 19.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹47 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 14%✓ 17.2%
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

5 good · 4 neutral · 2 weak

Market Cap

₹1,711 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

29.9x

Fair

Fairly valued against the generic band

P/B Ratio

5.20x

Rich

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

EPS (TTM)

₹92.59

Profitable

Profitable on a per-share basis

ROE

14.6%

Moderate

Moderate capital efficiency

ROCE

17.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.37x

Low

Conservative leverage

Revenue Growth (YoY)

33.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

99.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.06%

Modest

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

Free Cash Flow

-₹47 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

13.0%

Average

Average margins

Net Margin

10.7%

Good

Strong bottom-line conversion

Current Ratio

1.84

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.87

Market-like

Moves roughly in line with the market

52W Range Position

64%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

2891.5 / 2934.4

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

43.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹274 Cr	₹334 Cr	₹363 Cr	₹494 Cr	+21.8%
EBITDA	₹40 Cr	₹60 Cr	₹42 Cr	₹94 Cr	+33.3%
EBITDA Margin	14.6%	18.0%	11.6%	19.1%	—
PAT (Net Profit)	₹20 Cr	₹41 Cr	₹21 Cr	₹48 Cr	+32.9%
EPS	₹33.18	₹66.88	₹34.19	₹77.9	+32.9%
ROE	9.2%	15.7%	7.5%	14.6%	—
ROCE	12.5%	20.7%	9.5%	17.2%	—
Total Debt	₹32 Cr	₹34 Cr	₹78 Cr	₹123 Cr	+55.7%
Free Cash Flow	₹4 Cr	-₹8 Cr	-₹42 Cr	-₹47 Cr	—

🟢 Revenue has grown at 21.8% a year over 3 years.

🟢 EBITDA has grown at 33.3% a year over 3 years.

🟢 EBITDA Margin has risen from 14.6% to 19.1% over 3 years (+4.5 pts).

🟢 PAT (Net Profit) has grown at 32.9% a year over 3 years.

🟢 EPS has grown at 32.9% a year over 3 years.

🟢 ROE has risen from 9.2% to 14.6% over 3 years (+5.4 pts).

🟢 ROCE has risen from 12.5% to 17.2% over 3 years (+4.7 pts).

🔴 Total Debt has grown at 55.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹4 Cr to -₹47 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹545 Cr

Total Liabilities

₹216 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹43 Cr

Capex

-₹90 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

72.5%

Corporate Actions

Dividend Rate

₹1.75

Ex-Dividend Date

18 Aug 2026

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%