Novelix Pharmaceuticals Limited

Healthcare — Medical Distribution · BSE

₹64.99+₹1.10 (+1.72%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

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, 7:47 pm

Understanding the Business

Company site ↗

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

What does this company do?

Novelix Pharmaceuticals Limited manufactures and trades pharmaceutical bulk drugs and related products in activities related to healthcare research, analytics, and technology in India.

IndustryMedical Distribution

SectorHealthcare

Employees32

Annual revenue₹132 Cr

How does it make money?

Turns over ₹132 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹3 left at the operating level before interest, tax and depreciation. Each of its 32 employees supports ₹4.13 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.13 Cr

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, CIPLA LTD, DR. REDDY S LABORATORIES, APOLLO HOSPITALS ENTER. L. 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 7.4% 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%

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 +9320% while net margin moved -145% 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+9320%

Margin effect-145%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of 0.26 — historically steadier than the index
✗ Micro 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
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

53/ 100

Average

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

Valuation

54/ 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

36.7x

2Y Median

875.0x

28 monthly readings · mean 1470.3x · range 52.4x–4300.0x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 96% below its 2y median of 875.0x. 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

875.0x median over 28 months · -96%

vs. sector peers

Fair

33.3x median of 4 peers · +10%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

52.8x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from -54.1% to 2.7% over 3 years.
Return on equity is rising
ROE has improved from -0.8% to 5.5%.
Return on capital is rising
ROCE has improved from -8.0% to 7.4%.

🔴 What Needs Attention0

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

Red Flags

5 items require attention · 4 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 9.30x — earnings must service borrowings before shareholders see anything.
🔴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.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 30858% against revenue up 9320% — sales are being booked faster than they are collected.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 160% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -54.1% to 2.7%. 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 96% 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?

Leverage amplifies any setback
Debt/Equity of 9.30x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 30858% against revenue up 9320%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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
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 266% a year✓ 355.0% CAGR
Latest reported year was 65.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 1%✓ 2.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹26 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 7.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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

3 good · 4 neutral · 4 weak

Market Cap

₹185 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

36.7x

Fair

Fairly valued against the generic band

P/B Ratio

2.95x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹1.77

Profitable

Profitable on a per-share basis

ROE

5.5%

Weak

Weak capital efficiency

ROCE

7.4%

Weak

Low return on total capital employed

Debt/Equity

9.30x

High

High leverage

Revenue Growth (YoY)

65.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

444.4%

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

-₹26 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

3.3%

Weak

Thin margins leave little room for error

Net Margin

2.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.94

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.26

Defensive

Steadier than the market

52W Range Position

44%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

69.2 / 74.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

31.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1 Cr	₹4 Cr	₹31 Cr	₹132 Cr	+355.0%
EBITDA	-₹1 Cr	₹0 Cr	₹0 Cr	₹4 Cr	—
EBITDA Margin	-54.1%	3.5%	1.6%	2.7%	—
PAT (Net Profit)	-₹0 Cr	₹0 Cr	₹0 Cr	₹3 Cr	—
EPS	₹-0.07	₹0.01	₹0.08	₹1.21	—
ROE	-0.8%	0.1%	0.5%	5.5%	—
ROCE	-8.0%	0.3%	0.7%	7.4%	—
Free Cash Flow	-₹2 Cr	-₹0 Cr	-₹14 Cr	-₹26 Cr	—

🟢 Revenue has grown at 355.0% a year over 3 years.

🟢 EBITDA has turned positive, from -₹1 Cr to ₹4 Cr.

🟢 EBITDA Margin has risen from -54.1% to 2.7% over 3 years (+56.8 pts).

🟢 PAT (Net Profit) has turned positive, from -₹0 Cr to ₹3 Cr.

🟢 EPS has turned positive, from ₹-0.07 to ₹1.21.

🟢 ROE has risen from -0.8% to 5.5% over 3 years (+6.3 pts).

🟢 ROCE has risen from -8.0% to 7.4% over 3 years (+15.3 pts).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹92 Cr

Total Liabilities

₹46 Cr

Total Debt

₹4 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

-₹22 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

73.6%

Corporate Actions

Ex-Dividend Date

16 Aug 2012

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
CIPLA LTD	31.8x	9.8%
DR. REDDY S LABORATORIES	31.0x	8.8%
APOLLO HOSPITALS ENTER. L	54.3x	22.0%

Recent News

2 positive1 mixed3 general

Novelix Pharmaceuticals Q1 Results: Net profit turns positive, revenue up 14%

scanx.trade, 16 AugResults

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

Novelix Pharmaceuticals Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 02 Sept

NOVELIX PHARMACEUTICALS LIMITE Share Price - Live NOVELIX Stock Price & Chart

Upstox, 05 May

Novelix Pharma Q1 FY27 Results: Revenue Rs 36 Cr, PAT Surges 1002%

Univest, 17 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Novelix Pharmaceuticals Submits Q4FY26 SEBI Compliance Certificate for Dematerialisation Process

scanx.trade, 09 Apr

Novelix Pharmaceuticals standalone net profit rises 972.73% in the June 2026 quarter

Business Standard, 14 AugResults

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

Watch Items

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

DalalBaazaar Thesis

StrongGrowth

MiddlingFinancial Health · Profitability · Valuation

WeakBusiness Quality · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 4 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑