Sudeep Pharma Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹992.50−₹15.60 (−1.55%)

DalalBaazaar Score

63 / 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: 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, 7:48 pm

Understanding the Business

Company site ↗

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

What does this company do?

Sudeep Pharma Limited manufactures and sells excipients and specialty ingredients for the pharmaceutical, food, and nutrition industries in India, the United States, and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees525

Annual revenue₹639 Cr

How does it make money?

Turns over ₹639 Cr a year. Of every ₹100 of sales, about ₹27 reaches shareholders as profit, with ₹39 left at the operating level before interest, tax and depreciation. Each of its 525 employees supports ₹1.22 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.22 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 24.0%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 19.6% against a peer median of 14.5% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE14.5%

What is the outlook?

2 analysts covering the stock expect revenue to grow about 28.4% and earnings to grow about 13.7% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+28.4%

Est. earnings growth+13.7%

Analysts2

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +50% while net margin moved +85% 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+50%

Margin effect+85%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

73/ 100

Good

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

Valuation

35/ 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

60.9x

1.1Y Median

63.0x

13 monthly readings · mean 61.9x · range 48.2x–78.0x

Sector Median

33.3x

median of 4 sector peers

🟡Currently trading close to its 1.1y median of 63.0x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 83% above the peer median of 33.3x.

vs. its own history

Fair

63.0x median over 13 months · -3%

vs. sector peers

Expensive

33.3x median of 4 peers · +83%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

45.6x

PEG

1.50

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 23.0% to 38.9% over 3 years.
High return on capital employed
ROCE of 24.0% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.17x 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 27.9% to 19.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 35.9% to 24.0% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 81% over 3 years, from ₹83 Cr to ₹150 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 143% against revenue up 50% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 204% against revenue up 50% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹49 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 24.0% 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 23.0% to 38.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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 143% against revenue up 50%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 83% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 27.9% to 19.6%. 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
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
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 11% a year✓ 14.4% CAGR
Latest reported year was 26.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 37%✓ 38.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹49 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 21%✓ 24.0%
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

6 good · 2 neutral · 3 weak

Market Cap

₹11,210 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

60.9x

Expensive

Expensive — verify against sector peers

P/B Ratio

12.69x

Rich

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

EPS (TTM)

₹16.31

Profitable

Profitable on a per-share basis

ROE

19.6%

Strong

Strong capital efficiency

ROCE

24.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.17x

Low

Conservative leverage

Revenue Growth (YoY)

26.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

28.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.15%

Modest

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

Free Cash Flow

-₹49 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

51.8x

Improving

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

Operating Margin

32.2%

Good

Healthy core-business profitability

Net Margin

27.0%

Good

Strong bottom-line conversion

Current Ratio

3.09

Comfortable

Healthy short-term liquidity

52W Range Position

55%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1125.3 / 1143.6

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

29.9

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹426 Cr	₹455 Cr	₹497 Cr	₹639 Cr	+14.4%
EBITDA	₹98 Cr	₹187 Cr	₹198 Cr	₹248 Cr	+36.4%
EBITDA Margin	23.0%	41.1%	39.9%	38.9%	—
PAT (Net Profit)	₹62 Cr	₹133 Cr	₹139 Cr	₹173 Cr	+40.5%
EPS	₹5.52	₹11.79	₹12.28	₹15.5	+41.1%
ROE	27.9%	37.4%	28.1%	19.6%	—
ROCE	35.9%	47.2%	34.6%	24.0%	—
Total Debt	₹83 Cr	₹78 Cr	₹138 Cr	₹150 Cr	+21.9%
Free Cash Flow	₹1 Cr	₹13 Cr	-₹16 Cr	-₹49 Cr	—

🟢 Revenue has grown at 14.4% a year over 3 years.

🟢 EBITDA has grown at 36.4% a year over 3 years.

🟢 EBITDA Margin has risen from 23.0% to 38.9% over 3 years (+15.9 pts).

🟢 PAT (Net Profit) has grown at 40.5% a year over 3 years.

🟢 EPS has grown at 41.1% a year over 3 years.

🔴 ROE has fallen from 27.9% to 19.6% over 3 years (-8.3 pts).

🔴 ROCE has fallen from 35.9% to 24.0% over 3 years (-11.9 pts).

🔴 Total Debt has grown at 21.9% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹49 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,175 Cr

Total Liabilities

₹277 Cr

Cash & Equivalents

₹27 Cr

Operating Cash Flow

₹70 Cr

Capex

-₹118 Cr

Shareholding (proxy)

Institutional Holding

8.4%

Insider Holding

81.8%

Corporate Actions

Dividend Rate

₹1.5

Ex-Dividend Date

23 Jul 2026

Analyst Consensus

Recommendations

0 Buy · 1 Hold · 1 Sell

Target Price (Mean)

₹988

-0.5% vs CMP

Target Range

₹976 – ₹1,000

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

Sudeep Pharma Shares: Rs 1,000 Target Below CMP, What to Do

Univest, 13 Oct

Sudeep Pharma (SUDEEPPHRM) Share/Stock Price Live, NSE

TechGraph, 09 Oct

Sudeep Pharma Share Price and Technical Analysis

Kalkine India, 09 Oct

SUDEEPPHRM 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.

Sudeep Pharma Ltd Peer Comparison – Compare with Others

Value Research, 31 Aug

Sudeep Pharma Ltd | Stock Share Price Live

MarketSmith India, 02 Jun

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability

WeakValuation · Risk

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

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