Orchid Pharma Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹909.00−₹19.05 (−2.05%)

DalalBaazaar Score

40 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, 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, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Orchid Pharma Limited, a pharmaceutical company, engages in the development, manufacture, and marketing of active pharmaceutical ingredients, bulk actives, finished dosage formulations, and nutraceuticals in India.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees1,169

Annual revenue₹1,217 Cr

How does it make money?

Turns over ₹1,217 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 1,169 employees supports ₹1.04 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.04 Cr

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 1.1% 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 is the outlook?

1 analysts covering the stock expect revenue to grow about 38.9% and earnings to grow about 265.2% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+38.9%

Est. earnings growth+265.2%

Analysts1

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +83% while net margin moved -88% 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+83%

Margin effect-88%

DalalBaazaar Score

40/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 1.1% is below 10% — capital is not working hard
✗ ROCE has fallen by 9.2 points — returns are eroding
✗ EBITDA margin of 8.1% is thin — little cushion if costs rise
✗ Net margin of 3.5% is slim
• Revenue has compounded at 22.3% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

41/ 100

Weak

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

Valuation

26/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

564.6x

3Y Median

50.1x

40 monthly readings · mean 108.3x · range 21.4x–600.6x

Sector Median

33.3x

median of 4 sector peers

⚠️Current valuation is approximately 1027% above its 3y median of 50.1x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 1594% above the peer median of 33.3x.

vs. its own history

Expensive

50.1x median over 40 months · +1027%

vs. sector peers

Expensive

33.3x median of 4 peers · +1594%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

49.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.28x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 6.7% to 0.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 10.3% to 1.1% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 1 high · 4 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 7.3 points, from 15.4% to 8.1%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 10.5x to 2.2x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹264 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 78% over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 24% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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?

Margins are being competed away
EBITDA margin has fallen from 15.4% to 8.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 3.1x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
The price already assumes success
The stock trades 1027% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 6.7% to 0.6%. 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.

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

1Revenue growth stays above 17% a year✓ 22.3% CAGR
Latest reported year was 75.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 6%✓ 8.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.1x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹264 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.2x
How much operating profit can fall before interest stops being comfortably covered.

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

3 good · 3 neutral · 5 weak

Market Cap

₹4,610 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

564.6x

Expensive

Expensive — verify against sector peers

P/B Ratio

3.58x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹1.61

Profitable

Profitable on a per-share basis

ROE

0.6%

Weak

Weak capital efficiency

ROCE

1.1%

Weak

Low return on total capital employed

Debt/Equity

0.28x

Low

Conservative leverage

Revenue Growth (YoY)

75.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-81.6%

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

-₹264 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

21.6x

Improving

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

Operating Margin

1.0%

Weak

Thin margins leave little room for error

Net Margin

3.5%

Average

Average bottom-line conversion

Current Ratio

1.89

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.49

Defensive

Steadier than the market

52W Range Position

65%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1007.6 / 998.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

22.1

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹666 Cr	₹819 Cr	₹1,389 Cr	₹1,217 Cr	+22.3%
EBITDA	₹102 Cr	₹142 Cr	₹193 Cr	₹98 Cr	-1.3%
EBITDA Margin	15.4%	17.4%	13.9%	8.1%	—
PAT (Net Profit)	₹46 Cr	₹92 Cr	₹135 Cr	₹10 Cr	-40.1%
EPS	₹11.35	₹19.06	₹22.55	₹1.66	-47.3%
ROE	6.7%	7.9%	8.7%	0.6%	—
ROCE	10.3%	8.4%	8.6%	1.1%	—
Total Debt	₹331 Cr	₹135 Cr	₹154 Cr	₹307 Cr	-2.6%
Free Cash Flow	-₹67 Cr	₹61 Cr	-₹102 Cr	-₹264 Cr	—

🟢 Revenue has grown at 22.3% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (-1.3% a year).

🔴 EBITDA Margin has fallen from 15.4% to 8.1% over 3 years (-7.3 pts).

🔴 PAT (Net Profit) has shrunk at 40.1% a year over 3 years.

🔴 EPS has shrunk at 47.3% a year over 3 years.

🔴 ROE has fallen from 6.7% to 0.6% over 3 years (-6.1 pts).

🔴 ROCE has fallen from 10.3% to 1.1% over 3 years (-9.2 pts).

🟢 Total Debt has shrunk at 2.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,258 Cr

Total Liabilities

₹694 Cr

Cash & Equivalents

₹7 Cr

Operating Cash Flow

₹126 Cr

Capex

-₹390 Cr

Shareholding (proxy)

Institutional Holding

17.0%

Insider Holding

133.6%

Corporate Actions

Ex-Dividend Date

13 Sept 2012

Analyst Consensus

Recommendations

2 Buy · 1 Hold · 0 Sell

Target Price (Mean)

₹968.67

+6.6% vs CMP

Target Range

₹900 – ₹1,061

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 mixed4 general

Orchid Pharma to allot shares to Dhanuka Labs shareholders

scanx.trade, 18 Oct

Orchid Pharma Shares Zooms 10% On Russian Market Entry With Antibiotic Licensing Deal

NDTV Profit, 08 Jul

Explained - Why this Smallcap Pharma stock jumped 13% for its best day in two years

CNBC TV18, 08 Jul

Orchid Pharma Share Price Target 2026: Bull Case Rs 1,070, Bear C

Univest, 02 JulAnalyst view

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

Orchid Pharma shares rise 11% on Russia licensing pact for Exblifep

Moneycontrol.com, 08 JulPrice 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.

Triple-Digit PE Pharma Stock Jumps 10% as Company Signs Russia Licensing Deal; Share Price Crosses Rs 1,000

Dalal Street Investment Journal, 08 Jul

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

MiddlingFinancial Health · Growth

WeakBusiness Quality · Profitability · Valuation · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 1 high-severity red flag sits above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑