Syschem (India) Limited

Healthcare — Drug Manufacturers - Specialty & Generic · BSE

₹34.77−₹0.40 (−1.14%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

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

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 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 Syschem (India) Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Syschem (India) Limited engages in the production and sale of active pharmaceuticals ingredients (API), intermediates, and bulk drugs in India.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees135

Annual revenue₹655 Cr

How does it make money?

Turns over ₹655 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹3 left at the operating level before interest, tax and depreciation. Each of its 135 employees supports ₹4.85 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin2.9%

Net margin1.7%

Revenue / employee₹4.85 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.

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?Little sign of one

Returns on capital of 11.5% 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.

ROCE11.5%

ROE8.9%

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 +402% while net margin moved -52% 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+402%

Margin effect-52%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 8.9% is weak
✗ ROE has fallen by 11.3 points over the period

Quality vs. Valuation

Company Quality

54/ 100

Average

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 reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

32.2x

3Y Median

55.1x

40 monthly readings · mean 164.2x · range 16.0x–525.9x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 42% below its 3y median of 55.1x. 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 is priced broadly in line with the peer median of 33.3x.

vs. its own history

Cheap

55.1x median over 40 months · -42%

vs. sector peers

Fair

33.3x median of 4 peers · -3%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

32.2x

P/B

1.39x

EV/EBITDA

9.5x

PEG

0.94

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 75% over 3 years.
Valuation below its historical average
At 32.2x the stock trades 42% below its own median of 55.1x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Margins are compressing
EBITDA margin has slipped from 6.8% to 2.9% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 20.2% to 8.9% — each rupee of shareholder capital earns less than it did.

Red Flags

3 items require attention · 1 high · 2 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.
🟡Margins are compressingFinancial
EBITDA margin is down 3.9 points over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 41% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 75% 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 42% 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.
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 6.8% to 2.9%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Returns on shareholder capital are falling
ROE has dropped from 20.2% to 8.9%. 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.
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
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 53% a year✓ 71.3% CAGR
Latest reported year was -0.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 1%✓ 2.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹11 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 8%✓ 11.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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

4 good · 5 neutral · 2 weak

Market Cap

₹186 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

32.2x

Fair

Fairly valued against the generic band

P/B Ratio

1.39x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.08

Profitable

Profitable on a per-share basis

ROE

8.9%

Moderate

Moderate capital efficiency

ROCE

11.5%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.33x

Low

Conservative leverage

Revenue Growth (YoY)

-0.6%

Shrinking

Sales are contracting

Profit Growth (YoY)

2275.4%

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

-₹11 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹34.77

Operating Margin

-0.8%

Weak

Thin margins leave little room for error

Net Margin

1.2%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.34

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.31

Defensive

Steadier than the market

52W Range Position

19%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

35.3 / 32.9

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

36.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹130 Cr	₹233 Cr	₹386 Cr	₹655 Cr	+71.3%
EBITDA	₹9 Cr	₹7 Cr	₹4 Cr	₹19 Cr	+28.6%
EBITDA Margin	6.8%	3.0%	1.0%	2.9%	—
PAT (Net Profit)	₹5 Cr	₹3 Cr	₹0 Cr	₹11 Cr	+34.3%
EPS	₹1.42	₹0.78	₹0.11	₹1.93	+10.8%
ROE	20.2%	4.8%	0.5%	8.9%	—
ROCE	12.4%	6.4%	1.1%	11.5%	—
Total Debt	₹2 Cr	₹0 Cr	—	₹0 Cr	-37.0%
Free Cash Flow	-₹10 Cr	-₹32 Cr	-₹32 Cr	-₹11 Cr	—

🟢 Revenue has grown at 71.3% a year over 3 years.

🟢 EBITDA has grown at 28.6% a year over 3 years.

🔴 EBITDA Margin has fallen from 6.8% to 2.9% over 3 years (-3.9 pts).

🟢 PAT (Net Profit) has grown at 34.3% a year over 3 years.

🟢 EPS has grown at 10.8% a year over 3 years.

🔴 ROE has fallen from 20.2% to 8.9% over 3 years (-11.3 pts).

🟡 ROCE has held roughly flat at 11.5% over 3 years.

🟢 Total Debt has shrunk at 37.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹292 Cr

Total Liabilities

₹169 Cr

Total Debt

₹0 Cr

Cash & Equivalents

₹8 Cr

Operating Cash Flow

₹8 Cr

Capex

-₹18 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

76.1%

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

SYSCHEM Share Price Rises as Fundamentals Stay in Focus

Univest, 06 OctPrice 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.

Syschem (India) Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 29 Aug

Syschem India shifts board meeting date to Oct 27, 2026

scanx.trade, 08 Oct

Syschem (India) Share Price update with valuation and sector

Univest, 24 Sept

Syschem India AGM results: All resolutions passed with requisite majority

scanx.trade, 30 SeptResults

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

Syschem (India) Ltd. Share Price Within 2% of 52-Week Low

Univest, 19 Aug

Watch Items

Revenue growth is negative (-0.6%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate9/20

🟢Financial HealthStrong14/20

🟡GrowthModest12.9/20

🔴ProfitabilityWeak4.6/15

🟢ValuationAttractive10.9/15

🔴RiskHigh4/10

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. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 53% a year71.3% CAGR
✓EBITDA margin holds above 1%2.9%
✗Free cash flow remains positive-₹11 Cr
✓Debt / EBITDA stays below 2x0.0x
✓ROCE stays above 8%11.5%