RPG Life Sciences Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹2,925.00+₹146.50 (+5.27%)

DalalBaazaar Score

62 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

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

In simple words: Strong business and financial position, 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, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

RPG Life Sciences Limited, an integrated pharmaceutical company, develops, manufactures, and markets branded formulations, generic, and synthetic active pharmaceutical ingredients (APIs) in India and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees1,366

Annual revenue₹702 Cr

How does it make money?

Turns over ₹702 Cr a year. Of every ₹100 of sales, about ₹16 reaches shareholders as profit, with ₹23 left at the operating level before interest, tax and depreciation. Each of its 1,366 employees supports ₹51.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹51.4 lakh

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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 24.5%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 19.0% against a peer median of 14.5% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE14.5%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 17.0% and earnings to grow about 22.2% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+17.0%

Est. earnings growth+22.2%

Analysts1

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 +38% while net margin moved +23% 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+38%

Margin effect+23%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 40.4x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 37.8x
✗ P/B of 7.99x is a steep premium to book

Quality vs. Valuation

Company Quality

71/ 100

Good

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

Valuation

35/ 100

Expensive

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

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

40.4x

3Y Median

37.8x

40 monthly readings · mean 34.0x · range 16.8x–47.9x

Sector Median

33.3x

median of 4 sector peers

🟡Currently trading close to its 3y median of 37.8x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 21% above the peer median of 33.3x.

vs. its own history

Fair

37.8x median over 40 months · +7%

vs. sector peers

Expensive

33.3x median of 4 peers · +21%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

29.7x

PEG

2.08

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 21.0% to 22.6% over 3 years.
High return on capital employed
ROCE of 24.5% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 29.1% to 24.5% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 199900% over 3 years, from ₹0 Cr to ₹20 Cr.
🔴High leverageFinancial
Debt/Equity of 3.30x — earnings must service borrowings before shareholders see anything.
🔴Receivables growing faster than salesFinancial
Receivables up 212% against revenue up 38% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹9 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 24.5% 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.
Margin expansion has further to run
EBITDA margin has risen from 21.0% to 22.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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?

Leverage amplifies any setback
Debt/Equity of 3.30x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 212% against revenue up 38%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 21% above the peer median. That premium needs a reason that persists, or it closes.
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
3 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 8% a year✓ 11.3% CAGR
Latest reported year was 15.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 21%✓ 22.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹9 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 22%✓ 24.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

5 good · 2 neutral · 4 weak

Market Cap

₹4,838 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

40.4x

Expensive

Expensive — verify against sector peers

P/B Ratio

7.99x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹72.34

Profitable

Profitable on a per-share basis

ROE

19.0%

Strong

Strong capital efficiency

ROCE

24.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

3.30x

High

High leverage

Revenue Growth (YoY)

15.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

17.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.82%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹9 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

31.1x

Improving

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

Operating Margin

19.1%

Good

Healthy core-business profitability

Net Margin

16.3%

Good

Strong bottom-line conversion

Current Ratio

3.48

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.13

Defensive

Steadier than the market

52W Range Position

85%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

2887.9 / 2762.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

44.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹509 Cr	₹577 Cr	₹648 Cr	₹702 Cr	+11.3%
EBITDA	₹107 Cr	₹130 Cr	₹164 Cr	₹158 Cr	+14.0%
EBITDA Margin	21.0%	22.4%	25.4%	22.6%	—
PAT (Net Profit)	₹68 Cr	₹88 Cr	₹183 Cr	₹115 Cr	+19.4%
EPS	₹40.9	₹53.01	₹110.8	₹69.64	+19.4%
ROE	22.0%	23.4%	34.5%	19.0%	—
ROCE	29.1%	31.0%	43.4%	24.5%	—
Total Debt	₹0 Cr	—	—	₹20 Cr	+1159.9%
Free Cash Flow	₹58 Cr	₹25 Cr	₹42 Cr	-₹9 Cr	—

🟢 Revenue has grown at 11.3% a year over 3 years.

🟢 EBITDA has grown at 14.0% a year over 3 years.

🟢 EBITDA Margin has risen from 21.0% to 22.6% over 3 years (+1.6 pts).

🟢 PAT (Net Profit) has grown at 19.4% a year over 3 years.

🟢 EPS has grown at 19.4% a year over 3 years.

🔴 ROE has fallen from 22.0% to 19.0% over 3 years (-3.0 pts).

🔴 ROCE has fallen from 29.1% to 24.5% over 3 years (-4.5 pts).

🔴 Total Debt has grown at 1159.9% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹58 Cr to -₹9 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹793 Cr

Total Liabilities

₹188 Cr

Cash & Equivalents

₹150 Cr

Operating Cash Flow

₹57 Cr

Capex

-₹65 Cr

Shareholding (proxy)

Institutional Holding

5.6%

Insider Holding

76.5%

Corporate Actions

Dividend Rate

₹24

Ex-Dividend Date

09 Jul 2026

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹3,205

+9.6% vs CMP

Target Range

₹3,205 – ₹3,205

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

1 positive2 mixed3 general

RPGLIFE Share Price hits fresh 52-week high; price view

Univest, 25 Sept

Why RPG Life Sciences' (NSE:RPGLIFE) Shaky Earnings Are Just The Beginning Of Its Problems

Simply Wall Street, 07 MayResults

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

Q4 earnings, dividend news trigger 14% jump in RPG Life Sciences shares

Business Standard, 30 AprCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

RPG Life Sciences Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Clarus Trust lifts RPG Life Sciences holding to 7.04%

scanx.trade, 28 Sept

RPG Life Sciences Plans Rs 500 Cr API Expansion

HDFC Sky, 07 SeptCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability

MiddlingFinancial Health

WeakValuation · Risk

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 3 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 ↑