Sun Pharma Advanced Research Company Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹189.95+₹1.64 (+0.87%)

DalalBaazaar Score

62 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, 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, 6:58 pm

Understanding the Business

Company site ↗

The 60-second version of Sun Pharma Advanced Research Company Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Sun Pharma Advanced Research Company Limited engages in the research and development of pharmaceutical products in India and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees279

Annual revenue₹39 Cr

How does it make money?

Turns over ₹39 Cr a year. Of every ₹100 of sales, about ₹3967 reaches shareholders as profit, with ₹4105 left at the operating level before interest, tax and depreciation. Each of its 279 employees supports ₹14.0 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹14.0 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?Some evidence

ROCE of 111.8% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE14.5%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -84% while net margin moved -4356% 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-84%

Margin effect-4356%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 45.3% a year

Quality vs. Valuation

Company Quality

63/ 100

Average

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

Valuation

83/ 100

Cheap

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

3.9x

Sector Median

33.3x

median of 4 sector peers

🟢Against its sector it trades 88% below the peer median of 33.3x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

33.3x median of 4 peers · -88%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

4.2x

PEG

—

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from -86.4% to 4104.7% over 3 years.
Return on equity is rising
ROE has improved from -43.4% to 116.0%.
Return on capital is rising
ROCE has improved from -33.0% to 111.8%.
High return on capital employed
ROCE of 111.8% is the mark of a business that converts capital into profit efficiently.

🔴 What Needs Attention0

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

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 3458% over 3 years, from ₹16 Cr to ₹558 Cr.
🔴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?

Capital compounds at a high rate
ROCE of 111.8% 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 -86.4% to 4104.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 88% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

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.
Several serious flags at once
2 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

1EBITDA margin holds above 4103%✓ 4104.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹263 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 109%✓ 111.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

7 good · 3 neutral · 1 weak

Market Cap

₹6,164 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

3.9x

Cheap

Cheap against the generic band

P/B Ratio

4.60x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹48.81

Profitable

Profitable on a per-share basis

ROE

116.0%

Strong

Strong capital efficiency

ROCE

111.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.42x

Low

Conservative leverage

Revenue Growth (YoY)

314.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

553.5%

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

-₹263 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

3.4x

Improving

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

Operating Margin

-90.7%

Weak

Thin margins leave little room for error

Net Margin

83.0%

Good

Strong bottom-line conversion

Current Ratio

2.47

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.65

Defensive

Steadier than the market

52W Range Position

45%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

195.5 / 197.8

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

32.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹239 Cr	₹76 Cr	₹72 Cr	₹39 Cr	-45.3%
EBITDA	-₹206 Cr	-₹377 Cr	-₹323 Cr	₹1,607 Cr	—
EBITDA Margin	-86.4%	-498.9%	-450.0%	4104.7%	—
PAT (Net Profit)	-₹223 Cr	-₹387 Cr	-₹343 Cr	₹1,553 Cr	—
EPS	₹-7.82	₹-11.93	₹-10.55	₹47.86	—
ROE	-43.4%	-307.9%	—	116.0%	—
ROCE	-33.0%	-154.3%	—	111.8%	—
Total Debt	₹16 Cr	₹58 Cr	₹265 Cr	₹558 Cr	+228.9%
Free Cash Flow	-₹85 Cr	-₹456 Cr	-₹371 Cr	-₹263 Cr	—

🔴 Revenue has shrunk at 45.3% a year over 3 years.

🟢 EBITDA has turned positive, from -₹206 Cr to ₹1,607 Cr.

🟢 EBITDA Margin has risen from -86.4% to 4104.7% over 3 years (+4191.1 pts).

🟢 PAT (Net Profit) has turned positive, from -₹223 Cr to ₹1,553 Cr.

🟢 EPS has turned positive, from ₹-7.82 to ₹47.86.

🟢 ROE has risen from -43.4% to 116.0% over 3 years (+159.4 pts).

🟢 ROCE has risen from -33.0% to 111.8% over 3 years (+144.9 pts).

🔴 Total Debt has grown at 228.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,171 Cr

Total Liabilities

₹832 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹239 Cr

Capex

-₹24 Cr

Shareholding (proxy)

Institutional Holding

1.8%

Insider Holding

73.0%

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

2 mixed4 general

Concerns Surrounding Sun Pharma Advanced Research's (NSE:SPARC) Performance

Simply Wall Street, 25 May

Sun Pharma Advanced Research Company share price target 2027 2028 and 2030 Outlook

Univest, 06 AugAnalyst view

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

Sun Pharma Advanced Research Company Ltd. Peer Comparison – Compare with Others

Value Research, 31 Aug

Sun Pharma Advanced Research Co Q1 Results: Loss widens 6% YoY

scanx.trade, 10 AugResults

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

Stock Alert: ICICI Prudential Asset Management, HCL Tech, PDS, Sun Pharma Advanced Research

Business Standard, 14 Jul

Sun Pharma Advanced Research Share Price Forecast to 2030

Univest, 14 Jul

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Profitability · Valuation

MiddlingRisk

WeakGrowth

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

1 of 4 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑