Shanmuga Hospital Limited

Healthcare — Medical Care Facilities · BSE

₹45.50+₹2.87 (+6.73%)

DalalBaazaar Score

51 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

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

In simple words: Reasonable but unspectacular business quality, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Shanmuga Hospital Limited operates a multispecialty hospital in Tamil Nadu.

IndustryMedical Care Facilities

SectorHealthcare

Employees254

Annual revenue₹47 Cr

How does it make money?

Turns over ₹47 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 254 employees supports ₹18.7 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹18.7 lakh

Who are its competitors?

The closest listed comparisons in its industry are APOLLO HOSPITALS ENTER. L, SUN PHARMACEUTICAL IND L, CIPLA 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?Little sign of one

Returns on capital of 12.7% 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.

Peer median ROE14.5%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +21% 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+21%

Margin effect-27%

DalalBaazaar Score

51/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 6.4% — barely ahead of inflation
✗ Profit has declined at 4.0% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

48/ 100

Average

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

Valuation

62/ 100

Fair

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

14.6x

2Y Median

10.8x

22 monthly readings · mean 11.1x · range 8.4x–14.7x

Sector Median

34.9x

median of 3 sector peers

⚠️Current valuation is approximately 35% above its 2y median of 10.8x. 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 58% below the peer median of 34.9x.

vs. its own history

Expensive

10.8x median over 22 months · +35%

vs. sector peers

Cheap

34.9x median of 3 peers · -58%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.5x

PEG

4.57

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 12% over 3 years.
Very low debt
Debt/Equity of 0.16x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 40.3% to 9.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 42.7% to 12.7% — often a sign of competition or overexpansion.

Red Flags

1 item require attention · 1 high

🔴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.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 58% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

The price already assumes success
The stock trades 35% 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.
Growth barely outpaces inflation
Revenue compounding at 6.4% 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.
Returns on shareholder capital are falling
ROE has dropped from 40.3% to 9.9%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
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 17%✓ 18.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹8 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 5% a year✓ 6.4% CAGR
Latest reported year was 2.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 0.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 10%✓ 12.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

4 good · 6 neutral · 1 weak

Market Cap

₹62 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.6x

Cheap

Cheap against the generic band

P/B Ratio

1.46x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹3.11

Profitable

Profitable on a per-share basis

ROE

9.9%

Moderate

Moderate capital efficiency

ROCE

12.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.16x

Low

Conservative leverage

Revenue Growth (YoY)

2.9%

Modest

Modest growth

Profit Growth (YoY)

3.2%

Modest

Slow profit growth

Dividend Yield

None

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

Free Cash Flow

-₹8 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

11.7%

Average

Average margins

Net Margin

8.8%

Average

Average bottom-line conversion

Current Ratio

2.22

Comfortable

Healthy short-term liquidity

52W Range Position

51%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

45.1 / 44.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

48.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹39 Cr	₹43 Cr	₹48 Cr	₹47 Cr	+6.4%
EBITDA	₹7 Cr	₹9 Cr	₹8 Cr	₹9 Cr	+6.0%
EBITDA Margin	18.9%	20.6%	17.6%	18.7%	—
PAT (Net Profit)	₹5 Cr	₹5 Cr	₹4 Cr	₹4 Cr	-4.0%
EPS	₹3.5	₹3.86	₹4.03	₹3.09	-4.1%
ROE	40.3%	30.6%	10.6%	9.9%	—
ROCE	42.7%	35.8%	14.3%	12.7%	—
Total Debt	₹8 Cr	₹9 Cr	₹8 Cr	₹7 Cr	-4.1%
Free Cash Flow	-₹5 Cr	-₹2 Cr	-₹6 Cr	-₹8 Cr	—

🟢 Revenue has grown at 6.4% a year over 3 years.

🟢 EBITDA has grown at 6.0% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 18.7% over 3 years.

🔴 PAT (Net Profit) has shrunk at 4.0% a year over 3 years.

🔴 EPS has shrunk at 4.1% a year over 3 years.

🔴 ROE has fallen from 40.3% to 9.9% over 3 years (-30.4 pts).

🔴 ROCE has fallen from 42.7% to 12.7% over 3 years (-30.0 pts).

🟢 Total Debt has shrunk at 4.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹53 Cr

Total Liabilities

₹11 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹12 Cr

Capex

-₹20 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

59.2%

Peer Comparison

Company	P/E	ROE
APOLLO HOSPITALS ENTER. L	54.3x	22.0%
SUN PHARMACEUTICAL IND L	34.9x	14.5%
CIPLA LTD	31.8x	9.8%

Recent News

1 positive1 mixed4 general

SHANMUGA HOSPITAL LIMITED Share Price

Upstox, 05 May

Shanmuga Hospital standalone net profit rises 4.21% in the June 2026 quarter

Business Standard, 12 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Shanmuga Hospital Ltd Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 17 Sept

Shanmuga Hospital Q1 FY27 Results: Revenue Rs 11 Cr, PAT Rs 0.99 Cr and Key Highlights

Univest, 12 AugResults

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

Shanmuga Hospital AGM sets agenda for capital hike, ESOP, MOA changes

scanx.trade, 25 Aug

Shanmuga Hospital AGM resolutions pass with 99.98% shareholder vote

scanx.trade, 18 Sept

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingBusiness Quality

WeakGrowth · Profitability · Risk

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

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