Shilpa Medicare Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹940.00+₹17.90 (+1.94%)

DalalBaazaar Score

64 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by negative free cash flow, small-cap size, which brings sharper price swings, 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. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:28 pm

Understanding the Business

Company site ↗

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

What does this company do?

Shilpa Medicare Limited offers pharmaceutical ingredients (APIs), finished dosage formulations, biosimilars, and contract development and manufacturing organisation (CDMO) services in India, the United States, Europe, and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees1,241

Annual revenue₹1,538 Cr

How does it make money?

Turns over ₹1,538 Cr a year. Of every ₹100 of sales, about ₹16 reaches shareholders as profit, with ₹30 left at the operating level before interest, tax and depreciation. Each of its 1,241 employees supports ₹1.24 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.24 Cr

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?Little sign of one

Returns on capital of 12.0% 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 is the outlook?

4 analysts covering the stock expect revenue to grow about 21.7% and earnings to grow about 39.3% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+21.7%

Est. earnings growth+39.3%

Analysts4

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +47% while net margin moved -607% 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+47%

Margin effect-607%

DalalBaazaar Score

64/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 66.4x is demanding — it needs sustained high growth to justify
✓ P/E is 55% below its own historical median of 148.9x — cheap by its own standards
✗ P/B of 7.10x is a steep premium to book

Quality vs. Valuation

Company Quality

70/ 100

Good

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

Valuation

42/ 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

66.4x

2Y Median

148.9x

28 monthly readings · mean 146.7x · range 71.9x–245.6x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 55% below its 2y median of 148.9x. 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 99% above the peer median of 33.3x.

vs. its own history

Cheap

148.9x median over 28 months · -55%

vs. sector peers

Expensive

33.3x median of 4 peers · +99%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

40.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 11.0% to 30.2% over 3 years.
Debt is being paid down
Total debt is down 17% over 3 years.
Return on equity is rising
ROE has improved from -1.8% to 9.4%.
Return on capital is rising
ROCE has improved from 0.8% to 12.0%.
Very low debt
Debt/Equity of 0.25x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention0

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

Red Flags

2 items require attention · 1 high · 1 watch

🔴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.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 125% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 11.0% to 30.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 17% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 55% 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.

🔴 Bear CaseWhat could go wrong?

A premium to the sector to defend
It trades 99% above the peer median. That premium needs a reason that persists, or it closes.
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
Small 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 10% a year✓ 13.8% CAGR
Latest reported year was 44.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 28%✓ 30.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹28 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 9%✓ 12.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

4 good · 4 neutral · 3 weak

Market Cap

₹18,385 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

66.4x

Expensive

Expensive — verify against sector peers

P/B Ratio

7.10x

Rich

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

EPS (TTM)

₹14.15

Profitable

Profitable on a per-share basis

ROE

9.4%

Moderate

Moderate capital efficiency

ROCE

12.0%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.25x

Low

Conservative leverage

Revenue Growth (YoY)

44.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

115.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.06%

Modest

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

Free Cash Flow

-₹28 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

45.1x

Improving

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

Operating Margin

21.7%

Good

Healthy core-business profitability

Net Margin

17.7%

Good

Strong bottom-line conversion

Current Ratio

1.31

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.35

Defensive

Steadier than the market

52W Range Position

81%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1020.4 / 933.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

37.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,043 Cr	₹1,152 Cr	₹1,285 Cr	₹1,538 Cr	+13.8%
EBITDA	₹115 Cr	₹244 Cr	₹342 Cr	₹465 Cr	+59.5%
EBITDA Margin	11.0%	21.2%	26.6%	30.2%	—
PAT (Net Profit)	-₹33 Cr	₹32 Cr	₹78 Cr	₹243 Cr	—
EPS	₹-1.88	₹1.84	₹4.02	₹12.44	—
ROE	-1.8%	1.8%	3.3%	9.4%	—
ROCE	0.8%	5.8%	7.5%	12.0%	—
Total Debt	₹798 Cr	₹937 Cr	₹588 Cr	₹660 Cr	-6.1%
Free Cash Flow	-₹47 Cr	-₹48 Cr	-₹111 Cr	-₹28 Cr	—

🟢 Revenue has grown at 13.8% a year over 3 years.

🟢 EBITDA has grown at 59.5% a year over 3 years.

🟢 EBITDA Margin has risen from 11.0% to 30.2% over 3 years (+19.2 pts).

🟢 PAT (Net Profit) has turned positive, from -₹33 Cr to ₹243 Cr.

🟢 EPS has turned positive, from ₹-1.88 to ₹12.44.

🟢 ROE has risen from -1.8% to 9.4% over 3 years (+11.2 pts).

🟢 ROCE has risen from 0.8% to 12.0% over 3 years (+11.1 pts).

🟢 Total Debt has shrunk at 6.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,706 Cr

Total Liabilities

₹1,114 Cr

Cash & Equivalents

₹41 Cr

Operating Cash Flow

₹342 Cr

Capex

-₹371 Cr

Shareholding (proxy)

Institutional Holding

11.1%

Insider Holding

55.5%

Corporate Actions

Dividend Rate

₹0.6

Ex-Dividend Date

04 Sept 2026

Analyst Consensus

Recommendations

3 Buy · 1 Hold · 0 Sell

Target Price (Mean)

₹881.25

-6.3% vs CMP

Target Range

₹635 – ₹1,200

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

3 mixed3 general

SHILPAMED Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

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

Shilpa Medicare (SHILPAMED) Share/Stock Price Live, NSE

TechGraph, 08 Oct

Shilpa Medicare (NSEI:SHILPAMED) Stock Forecast & Analyst Predictions

Simply Wall Street, 01 SeptAnalyst view

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

Shilpa Medicare: Can new-age businesses unlock the next growth cycle?

The Indian Express, 26 Aug

Shilpa Medicare Share: Bull Case vs Bear Case for 2026

Univest, 24 Sept

Shilpa Medicare - FIIs raised stakes in these 12 smallcap stocks in Q1; shares surge up to 123%

The Economic Times, 31 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth

MiddlingProfitability · Risk

WeakValuation

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. 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 ↑