Sharma East India Hospitals & Medical Research Ltd

Healthcare — Medical Care Facilities · BSE

₹81.25−₹4.35 (−5.08%)

DalalBaazaar Score

49 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

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

In simple words: Reasonable but unspectacular business quality, 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, 6:08 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 Sharma East India Hospitals & Medical Research Ltd — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Sharma East India Hospitals & Medical Research Ltd, a multi-specialty hospital, provides medical and healthcare services.

IndustryMedical Care Facilities

SectorHealthcare

Employees234

Annual revenue₹36 Cr

How does it make money?

Turns over ₹36 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 234 employees supports ₹15.4 lakh of revenue a year, the signature of a people-led business.

EBITDA margin10.4%

Net margin3.5%

Revenue / employee₹15.4 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.

APOLLO HOSPITALS ENTER. LP/E 54.3x · ROE 22.0%

SUN PHARMACEUTICAL IND LP/E 34.9x · ROE 14.5%

CIPLA LTDP/E 31.8x · ROE 9.8%

What is its competitive advantage?Little sign of one

Returns on capital of 13.8% 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.

ROCE13.8%

ROE9.1%

Peer median ROE14.5%

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 +73% while net margin moved -14% 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+73%

Margin effect-14%

DalalBaazaar Score

49/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 9.1% is weak

Quality vs. Valuation

Company Quality

48/ 100

Average

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

Valuation

63/ 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

22.5x

3Y Median

27.3x

40 monthly readings · mean 26.3x · range 5.1x–67.7x

Sector Median

34.9x

median of 3 sector peers

🟢Current valuation is approximately 18% below its 3y median of 27.3x. 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 36% below the peer median of 34.9x.

vs. its own history

Fair

27.3x median over 40 months · -18%

vs. sector peers

Cheap

34.9x median of 3 peers · -36%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

22.5x

P/B

1.94x

EV/EBITDA

9.0x

PEG

1.58

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 12% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Margins are compressing
EBITDA margin has slipped from 15.9% to 10.4% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 167% against revenue growth of 73% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 516% against revenue growth of 73% — stock may not be moving.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 5.6 points, from 15.9% to 10.4%.
🔴Receivables growing faster than salesFinancial
Receivables up 167% against revenue up 73% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 516% against revenue up 73% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹5 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 36% 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?

Margins are being competed away
EBITDA margin has fallen from 15.9% to 10.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 167% against revenue up 73%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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 15% a year✓ 20.1% CAGR
Latest reported year was 13.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 8%✓ 10.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹5 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 2.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 11%✓ 13.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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

3 good · 6 neutral · 2 weak

Market Cap

₹27 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

22.5x

Fair

Fairly valued against the generic band

P/B Ratio

1.94x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹3.61

Profitable

Profitable on a per-share basis

ROE

9.1%

Moderate

Moderate capital efficiency

ROCE

13.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.53x

Low

Conservative leverage

Revenue Growth (YoY)

13.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-18.6%

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

-₹5 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹81.25

Operating Margin

4.7%

Weak

Thin margins leave little room for error

Net Margin

3.2%

Average

Average bottom-line conversion

Current Ratio

1.11

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.62

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

86.0 / 91.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

42.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹21 Cr	₹19 Cr	₹30 Cr	₹36 Cr	+20.1%
EBITDA	₹3 Cr	-₹2 Cr	₹4 Cr	₹4 Cr	+4.1%
EBITDA Margin	15.9%	-10.3%	12.5%	10.4%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹1 Cr	₹1 Cr	+14.2%
EPS	₹2.96	₹2.02	₹3.79	₹3.78	+8.5%
ROE	7.9%	5.9%	10.0%	9.1%	—
ROCE	15.4%	14.5%	14.8%	13.8%	—
Total Debt	₹8 Cr	₹5 Cr	₹2 Cr	₹7 Cr	-4.2%
Free Cash Flow	-₹2 Cr	-₹3 Cr	₹3 Cr	-₹5 Cr	—

🟢 Revenue has grown at 20.1% a year over 3 years.

🟢 EBITDA has grown at 4.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 15.9% to 10.4% over 3 years (-5.6 pts).

🟢 PAT (Net Profit) has grown at 14.2% a year over 3 years.

🟢 EPS has grown at 8.5% a year over 3 years.

🟢 ROE has risen from 7.9% to 9.1% over 3 years (+1.2 pts).

🔴 ROCE has fallen from 15.4% to 13.8% over 3 years (-1.6 pts).

🟢 Total Debt has shrunk at 4.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹33 Cr

Total Liabilities

₹19 Cr

Total Debt

₹7 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹4 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

73.3%

Corporate Actions

Ex-Dividend Date

27 Sept 1996

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

2 mixed4 general

HANNAH JOSEPH HOSPITAL LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 16 Oct

Sharma East India closes trading window ahead of Q2FY27 results

scanx.trade, 29 SeptResults

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

Compare with

Equitymaster, 26 Sept

Sharma East India Hospitals passes all AGM resolutions unanimously

scanx.trade, 01 Oct

Arvaya Healthcare reports standalone net loss of Rs 0.89 crore in the June 2026 quarter

Business Standard, 13 AugResults

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

Sharma East India Hospitals & Medical Research (BSE:524548) - Stock Analysis

Simply Wall Street, 09 Jul

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.

DalalBaazaar Thesis

🟡Business QualityAdequate9/20

🟡Financial HealthAdequate10.5/20

🟡GrowthModest11.6/20

🔴ProfitabilityWeak4.5/15

🟡ValuationFair9.3/15

🔴RiskHigh4.4/10

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

This thesis breaks if

✓Revenue growth stays above 15% a year20.1% CAGR
✓EBITDA margin holds above 8%10.4%
✗Free cash flow remains positive-₹5 Cr
✓Debt / EBITDA stays below 2x2.0x
✓ROCE stays above 11%13.8%