Healthcare — Drug Manufacturers - Specialty & Generic · NSE
₹197.53+₹3.10 (+1.59%)
DalalBaazaar Score
40 / 100
🟡 Moderate
Verdict
CAUTION
Risk
Moderate
Driven by the company is currently loss-making, falling profits.
In simple words: The company is currently losing money, though profits are falling even as sales grow. The direction of profits is the main factor to watch.
Decision support, not a buy or sell call.
As of 18 Oct 2026, 6:09 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.
The 60-second version of Piramal Pharma Limited — what it does, how it earns, and who it competes with, before any of the numbers below.
What does this company do?
Piramal Pharma Limited operates as a pharmaceutical company in the United States, Europe, Japan, India, and internationally. The company offers a portfolio of pharmaceutical products and services through global development and manufacturing facilities.
IndustryDrug Manufacturers - Specialty & Generic
SectorHealthcare
Employees7,120
Annual revenue₹8,759 Cr
How does it make money?
Turns over ₹8,759 Cr a year. Of every ₹100 of sales, about ₹-4 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 7,120 employees supports ₹1.23 Cr of revenue a year, the signature of a capital- or asset-led business.
EBITDA margin14.1%
Net margin-3.7%
Revenue / employee₹1.23 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.
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 1.2% 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.
ROCE1.2%
ROE-4.0%
Peer median ROE14.5%
What is the outlook?
10 analysts covering the stock expect revenue to grow about 14.5% and earnings to grow about 181.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.
Est. revenue growth+14.5%
Est. earnings growth+181.1%
Analysts10
What has been driving growth?
Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +25% while net margin moved +40% 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+25%
Margin effect+40%
DalalBaazaar Score
40/ 100
Moderate
Weighted across six categories. Every point is explained below.
✗ Return on equity is negative
Quality vs. Valuation
Company Quality
40/ 100
Weak
How good the business is, ignoring the share price entirely.
vs
Valuation
31/ 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
No P/E — the company is lossmaking
P/E (Trailing)
Not meaningful
P/B
3.21x
EV/EBITDA
24.9x
PEG
—
Dividend Yield
0.07%
What's Good / What's Bad
🟢 What's Going Well1
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
🔴 What Needs Attention1
Inventory building faster than sales
Inventory is up 82% against revenue growth of 25% — stock may not be moving.
Red Flags
4 items require attention · 2 high · 2 watch
🔴Thin interest coverageFinancial
Operating profit covers interest only 0.5x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹326 Cr in the latest reported year.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 2.0x to 0.5x.
🟡Inventory building faster than salesFinancial
Inventory up 82% against revenue up 25% — stock may not be moving.
Investment Thesis
🟢 Bull CaseWhat could make this work?
No clear supporting case emerges from the available numbers.
🔴 Bear CaseWhat could go wrong?
The debt load needs earnings to hold up
Debt is 4.6x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Growth barely outpaces inflation
Revenue compounding at 7.6% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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.
Several serious flags at once
2 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
1EBITDA margin holds above 12%✓ 14.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.6x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 0.5x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 6% a year✓ 7.6% CAGR
Latest reported year was 17.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹763 Cr
Profit that never becomes cash eventually stops being profit.
Investment Checklist
7 / 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
2 good · 4 neutral · 5 weak
Market Cap
₹26,173 Cr
Mid Cap
Mid-sized — more growth headroom, but sharper swings than large caps
P/E (Trailing)
Not meaningful
Loss-making
Earnings are negative, so a P/E multiple can't be read here
P/B Ratio
3.21x
Fair
Moderate premium to the company's book value
EPS (TTM)
₹-2.37
Loss-making
Negative earnings per share — the business is losing money
ROE
-4.0%
Weak
Weak capital efficiency
ROCE
1.2%
Weak
Low return on total capital employed
Debt/Equity
0.70x
Moderate
Moderate leverage
Revenue Growth (YoY)
17.4%
Healthy
Healthy top-line growth
Profit Growth (YoY)
-457.7%
Falling
Profits are shrinking
Dividend Yield
0.07%
Modest
Small cash return — most of the return has to come from the price
Free Cash Flow
₹763 Cr
Cash generative
Generates cash even after funding its capex
More Metrics
CMP
₹197.53
P/E (Forward)
48.6x
Operating Margin
-1.2%
Weak
Thin margins leave little room for error
Net Margin
-3.4%
Weak
Very little revenue reaches the bottom line
Current Ratio
1.51
Comfortable
Healthy short-term liquidity
Beta (vs Nifty)
0.34
Defensive
Steadier than the market
52W Range Position
65%
Mid-range
Mid-range
Technical Snapshot
SMA 20 / SMA 50
202.6 / 208.3
Bearish alignment (short < long)
Price vs SMA 200
Above
Long-term uptrend
RSI (14)
35.1
Neutral momentum
Financial Trend (4-Year)
Metric
FY23
FY24
FY25
FY26
3Y CAGR
Revenue
₹7,032 Cr
₹8,106 Cr
₹9,061 Cr
₹8,759 Cr
+7.6%
EBITDA
₹899 Cr
₹1,432 Cr
₹1,689 Cr
₹1,231 Cr
+11.0%
EBITDA Margin
12.8%
17.7%
18.6%
14.1%
—
PAT (Net Profit)
-₹186 Cr
₹18 Cr
₹91 Cr
-₹326 Cr
—
EPS
₹-1.54
₹0.14
₹0.69
₹-2.46
—
ROE
-2.8%
0.2%
1.1%
-4.0%
—
ROCE
2.0%
5.7%
7.0%
1.2%
—
Total Debt
₹5,637 Cr
₹4,710 Cr
₹4,856 Cr
₹5,675 Cr
+0.2%
Free Cash Flow
-₹481 Cr
₹293 Cr
₹228 Cr
₹763 Cr
—
🟢 Revenue has grown at 7.6% a year over 3 years.
🟢 EBITDA has grown at 11.0% a year over 3 years.
🟢 EBITDA Margin has risen from 12.8% to 14.1% over 3 years (+1.3 pts).
🔴 ROE has fallen from -2.8% to -4.0% over 3 years (-1.2 pts).
🟡 ROCE has held roughly flat at 1.2% over 3 years.
🟡 Total Debt has been broadly flat over 3 years (0.2% a year).
🟢 Free Cash Flow has turned positive, from -₹481 Cr to ₹763 Cr.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
DalalBaazaar Thesis
🔴Business QualityWeak7.7/20
🟢Financial HealthStrong13/20
🔴GrowthWeak7.6/20
🔴ProfitabilityWeak1.3/15
🔴ValuationDemanding5.1/15
🟡RiskModerate5.7/10
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. 2 high-severity red flags sit above this conclusion and should be read first.
