Sakar Healthcare Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹961.00−₹28.50 (−2.88%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Sakar Healthcare Limited research, develops, manufactures, and sells pharmaceutical products in India.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees435

Annual revenue₹252 Cr

How does it make money?

Turns over ₹252 Cr a year. Of every ₹100 of sales, about ₹12 reaches shareholders as profit, with ₹28 left at the operating level before interest, tax and depreciation. Each of its 435 employees supports ₹57.9 lakh of revenue a year, the signature of a people-led business.

EBITDA margin28.2%

Net margin12.1%

Revenue / employee₹57.9 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.

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 12.8% 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.

ROCE12.8%

ROE9.4%

Peer median ROE14.5%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 39.5% and earnings to grow about 77.8% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+39.5%

Est. earnings growth+77.8%

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 +89% while net margin moved +27% 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+89%

Margin effect+27%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 69.9x is demanding — it needs sustained high growth to justify
✗ P/E is 30% above its own historical median of 53.8x — expensive by its own standards
✗ P/B of 6.58x is a steep premium to book

Quality vs. Valuation

Company Quality

77/ 100

Good

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.

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

69.9x

3Y Median

53.8x

40 monthly readings · mean 63.3x · range 37.3x–136.6x

Sector Median

33.3x

median of 4 sector peers

⚠️Current valuation is approximately 30% above its 3y median of 53.8x. 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 110% above the peer median of 33.3x.

vs. its own history

Expensive

53.8x median over 40 months · +30%

vs. sector peers

Expensive

33.3x median of 4 peers · +110%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

69.9x

P/B

6.58x

EV/EBITDA

30.7x

PEG

2.07

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Debt is being paid down
Total debt is down 41% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on capital is rising
ROCE has improved from 7.9% to 12.8%.
Very low debt
Debt/Equity of 0.22x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Receivables growing faster than sales
Receivables are up 127% against revenue growth of 89% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 355% against revenue growth of 89% — stock may not be moving.
Valuation above its historical average
At 69.9x the stock trades 30% above its own median of 53.8x.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Inventory building faster than salesFinancial
Inventory up 355% against revenue up 89% — stock may not be moving.
🟡Receivables growing faster than salesFinancial
Receivables up 127% against revenue up 89% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 41% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹21 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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?

Sales are being booked faster than collected
Receivables are up 127% against revenue up 89%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 30% 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.
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

1Revenue growth stays above 18% a year✓ 23.6% CAGR
Latest reported year was 38.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 26%✓ 28.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹21 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 10%✓ 12.8%
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 · 4 neutral · 2 weak

Market Cap

₹2,109 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

69.9x

Expensive

Expensive — verify against sector peers

P/B Ratio

6.58x

Rich

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

EPS (TTM)

₹13.75

Profitable

Profitable on a per-share basis

ROE

9.4%

Moderate

Moderate capital efficiency

ROCE

12.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.22x

Low

Conservative leverage

Revenue Growth (YoY)

38.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

119.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹21 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹961

P/E (Forward)

23.5x

Improving

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

Operating Margin

20.2%

Good

Healthy core-business profitability

Net Margin

13.3%

Good

Strong bottom-line conversion

Current Ratio

1.28

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.41

Defensive

Steadier than the market

52W Range Position

69%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1066.4 / 1011.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

31.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹133 Cr	₹153 Cr	₹178 Cr	₹252 Cr	+23.6%
EBITDA	₹37 Cr	₹40 Cr	₹50 Cr	₹71 Cr	+23.8%
EBITDA Margin	28.1%	26.3%	28.4%	28.2%	—
PAT (Net Profit)	₹13 Cr	₹12 Cr	₹18 Cr	₹30 Cr	+33.7%
EPS	₹6.86	₹5.67	₹8	—	—
ROE	7.4%	4.4%	6.1%	9.4%	—
ROCE	7.9%	6.9%	8.4%	12.8%	—
Total Debt	₹119 Cr	₹79 Cr	₹86 Cr	₹71 Cr	-16.0%
Free Cash Flow	-₹49 Cr	-₹35 Cr	₹2 Cr	₹21 Cr	—

🟢 Revenue has grown at 23.6% a year over 3 years.

🟢 EBITDA has grown at 23.8% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 28.2% over 3 years.

🟢 PAT (Net Profit) has grown at 33.7% a year over 3 years.

🟢 ROE has risen from 7.4% to 9.4% over 3 years (+2.0 pts).

🟢 ROCE has risen from 7.9% to 12.8% over 3 years (+4.8 pts).

🟢 Total Debt has shrunk at 16.0% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹49 Cr to ₹21 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹481 Cr

Total Liabilities

₹157 Cr

Total Debt

₹71 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹49 Cr

Capex

-₹28 Cr

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹1,020

+6.1% vs CMP

Target Range

₹1,020 – ₹1,020

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 mixed5 general

Have Insiders Sold Sakar Healthcare Shares Recently?

Simply Wall Street, 06 Aug

Sakar Healthcare Starts Commercial Cancer Drug Supplies

Equitypandit, 14 Oct

Sakar Healthcare Share Price Target 2026: Rs 970 Analyst Forecast

Univest, 25 JunAnalyst view

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

350% rally in five years! Multibagger stock jumps after reporting 120% YoY rise in net profit during Q1FY27

Livemint, 27 Jul

Why Did Investors Turn Cautious on Sakar Healthcare After Multi-Week Rally?

Kalkine India, 06 May

Sakar Healthcare Expands Global Reach With 14 New Oncology Clears

HDFC Sky, 02 Sept

Watch Items

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

DalalBaazaar Thesis

🟢Business QualityStrong14.5/20

🟢Financial HealthStrong16.6/20

🟢GrowthStrong18.5/20

🟡ProfitabilityModerate7.9/15

🔴ValuationDemanding3.3/15

🟡RiskModerate5.2/10

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. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 18% a year23.6% CAGR
✓EBITDA margin holds above 26%28.2%
✓Free cash flow remains positive₹21 Cr
✓Debt / EBITDA stays below 2x1.0x
✓ROCE stays above 10%12.8%