Syncom Formulations (India) Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹22.01+₹0.45 (+2.09%)

DalalBaazaar Score

77 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with modest growth. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Constructive picture on fundamentals. Profitability, leverage and growth metrics are broadly healthy on this snapshot. That said, valuation should still be checked against direct sector peers (not just the generic P/E bands used here) before treating this as a buy signal.

Understanding the Business

Company site ↗

The 60-second version of Syncom Formulations (India) Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Syncom Formulations (India) Limited manufactures, markets, and sells pharmaceutical formulation products in India and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees902

Annual revenue₹482 Cr

How does it make money?

Turns over ₹482 Cr a year. Of every ₹100 of sales, about ₹16 reaches shareholders as profit, with ₹21 left at the operating level before interest, tax and depreciation. Each of its 902 employees supports ₹53.4 lakh of revenue a year, the signature of a people-led business.

EBITDA margin21.1%

Net margin15.9%

Revenue / employee₹53.4 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.

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

DR. REDDY S LABORATORIESP/E 31.0x · ROE 8.8%

CIPLA LTDP/E 31.8x · ROE 9.8%

DIVI S LABORATORIES LTDP/E 83.0x · ROE 17.5%

What is its competitive advantage?Some evidence

ROCE of 23.7% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE23.7%

ROE18.4%

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 +117% while net margin moved +76% 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+117%

Margin effect+76%

DalalBaazaar Score

77/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 0.83 — moves roughly with the market
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal

Quality vs. Valuation

Company Quality

83/ 100

Excellent

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

Valuation

73/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

23.4x

3Y Median

54.4x

40 monthly readings · mean 49.1x · range 19.4x–82.0x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 57% below its 3y median of 54.4x. 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 30% below the peer median of 33.3x.

vs. its own history

Cheap

54.4x median over 40 months · -57%

vs. sector peers

Cheap

33.3x median of 4 peers · -30%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

23.4x

P/B

4.94x

EV/EBITDA

20.3x

PEG

0.42

Dividend Yield

0.45%

What's Good / What's Bad

🟢 What's Going Well8

Margins are improving
EBITDA margin is up from 15.3% to 21.1% over 3 years.
Debt is being paid down
Total debt is down 98% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from 7.8% to 18.4%.
Return on capital is rising
ROCE has improved from 11.2% to 23.7%.
High return on capital employed
ROCE of 23.7% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 23.4x the stock trades 57% below its own median of 54.4x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Inventory building faster than sales
Inventory is up 197% against revenue growth of 117% — stock may not be moving.

Red Flags

1 item require attention · 1 high

🔴Inventory building faster than salesFinancial
Inventory up 197% against revenue up 117% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 23.7% 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 15.3% to 21.1%. 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 98% 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 57% 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.
Cheaper than its peers
It trades 30% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

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

1Revenue growth stays above 22% a year✓ 29.4% CAGR
Latest reported year was 7.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 19%✓ 21.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹46 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 21%✓ 23.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

11 / 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

6 good · 5 neutral · 0 weak

Market Cap

₹2,069 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

23.4x

Fair

Fairly valued against the generic band

P/B Ratio

4.94x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.94

Profitable

Profitable on a per-share basis

ROE

18.4%

Strong

Strong capital efficiency

ROCE

23.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.35x

Low

Conservative leverage

Revenue Growth (YoY)

7.4%

Modest

Modest growth

Profit Growth (YoY)

23.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.45%

Modest

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

Free Cash Flow

₹46 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹22.01

Operating Margin

19.7%

Good

Healthy core-business profitability

Net Margin

17.2%

Good

Strong bottom-line conversion

Current Ratio

3.18

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.83

Market-like

Moves roughly in line with the market

52W Range Position

68%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

22.4 / 19.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

56.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹222 Cr	₹259 Cr	₹457 Cr	₹482 Cr	+29.4%
EBITDA	₹34 Cr	₹42 Cr	₹71 Cr	₹102 Cr	+43.9%
EBITDA Margin	15.3%	16.3%	15.5%	21.1%	—
PAT (Net Profit)	₹20 Cr	₹25 Cr	₹49 Cr	₹76 Cr	+56.2%
EPS	₹0.22	₹0.27	₹0.53	₹0.81	+55.3%
ROE	7.8%	8.8%	14.4%	18.4%	—
ROCE	11.2%	12.8%	18.7%	23.7%	—
Total Debt	₹83 Cr	₹72 Cr	₹5 Cr	₹1 Cr	-73.8%
Free Cash Flow	-₹10 Cr	-₹14 Cr	₹13 Cr	₹46 Cr	—

🟢 Revenue has grown at 29.4% a year over 3 years.

🟢 EBITDA has grown at 43.9% a year over 3 years.

🟢 EBITDA Margin has risen from 15.3% to 21.1% over 3 years (+5.8 pts).

🟢 PAT (Net Profit) has grown at 56.2% a year over 3 years.

🟢 EPS has grown at 55.3% a year over 3 years.

🟢 ROE has risen from 7.8% to 18.4% over 3 years (+10.6 pts).

🟢 ROCE has risen from 11.2% to 23.7% over 3 years (+12.4 pts).

🟢 Total Debt has shrunk at 73.8% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹10 Cr to ₹46 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹534 Cr

Total Liabilities

₹119 Cr

Total Debt

₹1 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

₹58 Cr

Capex

-₹12 Cr

Shareholding (proxy)

Institutional Holding

0.1%

Insider Holding

50.6%

Corporate Actions

Dividend Rate

₹0.1

Ex-Dividend Date

23 Sept 2026

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 positive4 general

Syncom Formulations Share Price - Live NSE: SYNCOMF Stock Price & Chart

Upstox, 16 Oct

Syncom Formulations Share Price: fundamentals and peers

Univest, 24 Aug

Syncom Formulations Q4 Net Profit Surges 41.8% to ₹25.1 Cr despite 10% Revenue Drop

Sahi, 22 MayResults

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

Syncom Formulations (SYNCOMF.NS) Holds Near ₹20 as Stock Consolidates Below ₹21 Resistance - Gap and Reverse

https://www.siam.in/, 20 Sept

Stocks to Watch: VIL Drops, IFCI Soars, PCJ & Syncom Gain

HDFC Sky, 28 Aug

Syncom Formulations (India) consolidated net profit rises 57.78% 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.

Watch Items

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

DalalBaazaar Thesis

🟢Business QualityStrong17.9/20

🟢Financial HealthStrong17.6/20

🟢GrowthStrong14.9/20

🟢ProfitabilityStrong12/15

🟢ValuationAttractive10.7/15

🔴RiskHigh4/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 22% a year29.4% CAGR
✓EBITDA margin holds above 19%21.1%
✓Free cash flow remains positive₹46 Cr
✓Debt / EBITDA stays below 2x0.0x
✓ROCE stays above 21%23.7%