Parmax Pharma Limited

Healthcare — Drug Manufacturers - Specialty & Generic · BSE

₹137.75₹0.00 (0.00%)

DalalBaazaar Score

19 / 100

🔴 Poor

Verdict

HIGH RISK

Risk

Very High

Driven by negative shareholders' equity — the company owes more than it owns, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: The company owes more than it owns — years of losses have wiped out its net worth, but sales are shrinking. Solvency — whether it can keep funding itself at all — is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 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 Parmax Pharma Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Parmax Pharma Limited operates in the pharmaceutical business in India. It manufactures and sells bulk drugs, drug intermediates, and specialty chemicals. The company was incorporated in 1994 and is based in Rajkot, India.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Annual revenue₹12 Cr

How does it make money?

Turns over ₹12 Cr a year. Of every ₹100 of sales, about ₹-34 reaches shareholders as profit, with ₹-30 left at the operating level before interest, tax and depreciation.

EBITDA margin-30.1%

Net margin-34.3%

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.

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

DR. REDDY S LABORATORIESP/E 31.0x · ROE 8.8%

CIPLA LTDP/E 31.8x · ROE 9.8%

DIVI S LABORATORIES LTDP/E 83.0x · ROE 17.5%

What is its competitive advantage?Little sign of one

Returns on capital of -86.8% 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.

ROCE-86.8%

Peer median ROE14.5%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -21% while net margin moved +4990% 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-21%

Margin effect+4990%

DalalBaazaar Score

19/ 100

Poor

Weighted across six categories. Every point is explained below.

✗ Shareholders' equity is negative — accumulated losses exceed the capital in the business

Quality vs. Valuation

Company Quality

18/ 100

Weak

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

Valuation

30/ 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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

Multiples unreliable — equity base is negative

P/E (Trailing)

Not meaningful

P/B

—

EV/EBITDA

—

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well0

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

🔴 What Needs Attention7

Margins are compressing
EBITDA margin has slipped from 17.5% to -30.1% over 3 years.
Debt is rising
Total debt is up 124% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 408% against revenue growth of -21% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 82% against revenue growth of -21% — stock may not be moving.
Negative shareholders' equity
Liabilities exceed assets — this is a solvency question that sits above every other consideration here.
Short-term liquidity is tight
Current ratio of 0.74 — near-term obligations exceed near-term assets.

Red Flags

10 items require attention · 8 high · 2 watch

🔴Negative shareholders' equityFinancial
Liabilities exceed assets — accumulated losses have wiped out the company's net worth.
🔴Debt has risen sharplyFinancial
Total debt is up 124% over 3 years, from ₹5 Cr to ₹12 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only -3.9x — little room if earnings dip.
🔴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.
🔴The company is lossmakingFinancial
Net profit of -₹4 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 47.6 points, from 17.5% to -30.1%.
🔴Receivables growing faster than salesFinancial
Receivables up 408% against revenue up -21% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 82% against revenue up -21% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from -4.1x to -3.9x.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.74 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Solvency comes before everything else
Liabilities exceed assets. Until net worth is rebuilt, the equity is a claim on a business that owes more than it owns, and further losses or a funding squeeze can leave shareholders with nothing.
Margins are being competed away
EBITDA margin has fallen from 17.5% to -30.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 408% against revenue up -21%. 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.

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

1EBITDA margin holds above -32%✓ -30.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹3 Cr
Profit that never becomes cash eventually stops being profit.
3Interest cover stays above 3x✗ -3.9x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

2 / 10 checks passed

✗ Shareholders' equity is positive (assets exceed liabilities)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ 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

0 good · 4 neutral · 7 weak

Market Cap

₹52 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹-3.2

Loss-making

Negative earnings per share — the business is losing money

ROE

Not meaningful

Negative equity

Return on equity can't be read when equity itself is negative

ROCE

-86.8%

Distorted

Distorted by the negative net worth — read this alongside the solvency flag, not on its own

Debt/Equity

Not meaningful

Negative equity

Shareholders' equity is negative, so this ratio can't be read

Revenue Growth (YoY)

-57.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

-98.6%

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

-₹3 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹137.75

Operating Margin

0.0%

Weak

Thin margins leave little room for error

Net Margin

0.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.74

Tight

Tight short-term liquidity

52W Range Position

99%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

137.6 / 130.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

66.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹15 Cr	₹11 Cr	₹28 Cr	₹12 Cr	-7.7%
EBITDA	₹3 Cr	-₹3 Cr	₹0 Cr	-₹4 Cr	—
EBITDA Margin	17.5%	-27.1%	0.6%	-30.1%	—
PAT (Net Profit)	-₹0 Cr	-₹6 Cr	-₹2 Cr	-₹4 Cr	—
EPS	₹-0.28	₹-34.56	₹-6	₹-11	—
ROE	-1.8%	-5459.0%	—	—	—
ROCE	4.1%	-83.9%	-33.7%	-86.8%	—
Total Debt	₹5 Cr	₹6 Cr	₹8 Cr	₹12 Cr	+30.9%
Free Cash Flow	-₹1 Cr	-₹2 Cr	-₹1 Cr	-₹3 Cr	—

🔴 Revenue has shrunk at 7.7% a year over 3 years.

🔴 EBITDA has turned negative, from ₹3 Cr to -₹4 Cr.

🔴 EBITDA Margin has fallen from 17.5% to -30.1% over 3 years (-47.6 pts).

🔴 ROCE has fallen from 4.1% to -86.8% over 3 years (-90.9 pts).

🔴 Total Debt has grown at 30.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹28 Cr

Total Liabilities

₹34 Cr

Total Debt

₹12 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹2 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

80.1%

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

6 general

Parmax Pharma acquires 30.80% stake via share purchase agreement

scanx.trade, 24 Aug

Board of Parmax Pharma approves preferential issue of shares and warrants

Business Standard, 29 Aug

Parmax Pharma Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 29 Aug

Parmax Pharma acquirers lift stake to 58% in ₹35-per-share off-market deal

Dealroom, 13 Aug

Parmax Pharma open offer opens July 30 at ₹42.80 per share

scanx.trade, 30 Jul

Parmax Pharma open offer at ₹42.80 per share for 26% stake

scanx.trade, 09 Jun

Watch Items

Revenue growth is negative (-57.1%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🔴Business QualityWeak6/20

🔴Financial HealthStretched1/20

🔴GrowthWeak5/20

🔴ProfitabilityWeak1.5/15

🔴ValuationDemanding4.5/15

🔴RiskHigh0.5/10

Avoid until solvency is resolved

Parmax Pharma Limited owes more than it owns. Whatever the operating numbers show, the equity is a residual claim on a business with negative net worth, and that question has to be settled before any of the rest is worth weighing. 8 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above -32%-30.1%
✗Free cash flow remains positive-₹3 Cr
✗Interest cover stays above 3x-3.9x