Royal Sense Limited

Healthcare — Medical Distribution · BSE

₹72.00+₹4.00 (+5.88%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

In simple words: Strong business and financial position, 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, 6:56 pm

Understanding the Business

Company site ↗

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

What does this company do?

Royal Sense Limited engages in supplying various surgical accessories, instruments, equipment, and other pharmaceutical products under the STERGIC brand name.

IndustryMedical Distribution

SectorHealthcare

Annual revenue₹62 Cr

How does it make money?

Turns over ₹62 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation.

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?Some evidence

ROCE of 31.8% 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%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.68 — historically steadier than the index
✗ 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

63/ 100

Average

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

Valuation

88/ 100

Cheap

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

5.8x

3Y Median

47.4x

33 monthly readings · mean 79.8x · range 14.8x–347.8x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 88% below its 3y median of 47.4x. 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 trades 83% below the peer median of 33.3x.

vs. its own history

Cheap

47.4x median over 33 months · -88%

vs. sector peers

Cheap

33.3x median of 4 peers · -83%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

3.4x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

High return on capital employed
ROCE of 31.8% is the mark of a business that converts capital into profit efficiently.

🔴 What Needs Attention0

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

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 523% over 3 years, from ₹1 Cr to ₹3 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.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 31.8% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Priced below its own history
The stock trades 88% 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.
Cheaper than its peers
It trades 83% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 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
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%✓ 14.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹0 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 29%✓ 31.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 47.4x✓ 5.8x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 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

7 good · 2 neutral · 2 weak

Market Cap

₹39 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

5.8x

Cheap

Cheap against the generic band

P/B Ratio

0.95x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹12.46

Profitable

Profitable on a per-share basis

ROE

21.0%

Strong

Strong capital efficiency

ROCE

31.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.32x

Low

Conservative leverage

Revenue Growth (YoY)

50.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-25.9%

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

-₹24 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

14.1%

Good

Assets are working hard

Operating Margin

8.6%

Average

Average margins

Net Margin

6.9%

Average

Average bottom-line conversion

Current Ratio

3.04

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.68

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

83.7 / 91.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

24.7

Oversold zone

Financial Trend (5-Year)

Metric	FY22	FY23	FY24	FY24	FY25	3Y CAGR	4Y CAGR
Revenue	—	—	₹18 Cr	₹22 Cr	₹62 Cr	—	+86.2%
EBITDA	—	—	₹2 Cr	₹3 Cr	₹9 Cr	—	+98.1%
EBITDA Margin	—	—	12.7%	14.6%	14.4%	—	—
PAT (Net Profit)	—	—	₹2 Cr	₹2 Cr	₹6 Cr	—	+99.6%
EPS	₹0.45	—	₹3.24	₹4.85	—	—	—
ROE	—	—	8.7%	—	22.8%	—	—
ROCE	—	—	12.2%	—	31.8%	—	—
Total Debt	₹0 Cr	₹1 Cr	₹2 Cr	—	₹3 Cr	+84.0%	+78.9%
Free Cash Flow	—	—	-₹4 Cr	-₹5 Cr	-₹0 Cr	—	—

🟢 Revenue has grown at 86.2% a year over 2 years.

🟢 EBITDA has grown at 98.1% a year over 2 years.

🟢 EBITDA Margin has risen from 12.7% to 14.4% over 3 years (+1.7 pts).

🟢 PAT (Net Profit) has grown at 99.6% a year over 2 years.

🟢 ROE has risen from 8.7% to 22.8% over 3 years (+14.1 pts).

🟢 ROCE has risen from 12.2% to 31.8% over 3 years (+19.5 pts).

🔴 Total Debt has grown at 78.9% a year over 4 years.

Balance Sheet & Cash Flow — FY2025

Total Assets

₹36 Cr

Total Liabilities

₹8 Cr

Cash & Equivalents

₹11 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

26.0%

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

6 general

Compare with

Equitymaster, 16 Oct

Royal Sense Limited Share Price

Upstox, 05 May

Royal Sense Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 27 Aug

Royal Sense approves ₹500 crore fund raising, capital increase

scanx.trade, 17 Jul

Compare with

Equitymaster, 08 Oct

Royal Sense Ltd Peer Comparison – Compare with Others

Value Research, 27 Aug

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
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

StrongFinancial Health · Profitability · Valuation

MiddlingBusiness Quality · Growth

WeakRisk

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. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑