Valiant Laboratories Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹134.65+₹6.41 (+5.00%)

DalalBaazaar Score

37 / 100

🔴 Weak

Verdict

CAUTION

Risk

Moderate

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

In simple words: The business is earning a fairly low return on the money invested in it, 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, 6:50 pm

Understanding the Business

Company site ↗

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

What does this company do?

Valiant Laboratories Limited operates as an active pharmaceutical ingredient/bulk drug manufacturing company in India and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees84

Annual revenue₹237 Cr

How does it make money?

Turns over ₹237 Cr a year. Of every ₹100 of sales, about ₹-1 reaches shareholders as profit, with ₹3 left at the operating level before interest, tax and depreciation. Each of its 84 employees supports ₹2.83 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.83 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 0.8% 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 has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -29% while net margin moved -116% 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-29%

Margin effect-116%

DalalBaazaar Score

37/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 10.7% a year

Quality vs. Valuation

Company Quality

34/ 100

Weak

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

Valuation

45/ 100

Fair

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

47.9x

3Y Median

645.0x

38 monthly readings · mean 568.4x · range 21.7x–1115.9x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 93% below its 3y median of 645.0x. 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 44% above the peer median of 33.3x.

vs. its own history

Cheap

645.0x median over 38 months · -93%

vs. sector peers

Expensive

33.3x median of 4 peers · +44%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

99.6x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 23% over 3 years.
Very low debt
Debt/Equity of 0.15x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 28.9% to -1.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 23.7% to 0.8% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 5 high

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.4x — little room if earnings dip.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴The company is lossmakingFinancial
Net profit of -₹3 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 7.5 points, from 10.8% to 3.3%.
🔴Inventory building faster than salesFinancial
Inventory up 248% against revenue up -29% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 23% 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 93% 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?

Margins are being competed away
EBITDA margin has fallen from 10.8% to 3.3%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 5.9x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 44% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 28.9% to -1.1%. 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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 1%✓ 3.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.9x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹45 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.4x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 0.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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 · 3 neutral · 4 weak

Market Cap

₹731 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

47.9x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.38x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹2.81

Profitable

Profitable on a per-share basis

ROE

-1.1%

Weak

Weak capital efficiency

ROCE

0.8%

Weak

Low return on total capital employed

Debt/Equity

0.15x

Low

Conservative leverage

Revenue Growth (YoY)

146.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

826.2%

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

-₹45 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

22.9%

Good

Healthy core-business profitability

Net Margin

5.2%

Average

Average bottom-line conversion

Current Ratio

1.91

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.92

Market-like

Moves roughly in line with the market

52W Range Position

100%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

123.7 / 108.0

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

61.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹334 Cr	₹182 Cr	₹133 Cr	₹237 Cr	-10.7%
EBITDA	₹36 Cr	-₹3 Cr	₹2 Cr	₹8 Cr	-40.1%
EBITDA Margin	10.8%	-1.5%	1.3%	3.3%	—
PAT (Net Profit)	₹29 Cr	₹0 Cr	-₹2 Cr	-₹3 Cr	—
EPS	₹6.19	₹0.12	₹-0.47	₹-0.65	—
ROE	28.9%	0.1%	-0.9%	-1.1%	—
ROCE	23.7%	-0.2%	-0.4%	0.8%	—
Total Debt	₹60 Cr	₹77 Cr	₹122 Cr	₹46 Cr	-8.4%
Free Cash Flow	₹18 Cr	-₹44 Cr	-₹113 Cr	-₹45 Cr	—

🔴 Revenue has shrunk at 10.7% a year over 3 years.

🔴 EBITDA has shrunk at 40.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 10.8% to 3.3% over 3 years (-7.5 pts).

🔴 PAT (Net Profit) has turned negative, from ₹29 Cr to -₹3 Cr.

🔴 EPS has turned negative, from ₹6.19 to ₹-0.65.

🔴 ROE has fallen from 28.9% to -1.1% over 3 years (-29.9 pts).

🔴 ROCE has fallen from 23.7% to 0.8% over 3 years (-22.9 pts).

🟢 Total Debt has shrunk at 8.4% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹18 Cr to -₹45 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹464 Cr

Total Liabilities

₹153 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

-₹10 Cr

Capex

-₹34 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

76.8%

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 positive5 general

Valiant Laboratories Upper Circuit Streak: Day 2 Price and Data

Univest, 16 Oct

Valiant Laboratories Upper Circuit Today: Price, Data and Peers

Univest, 15 Oct

Valiant Laboratories approves ₹60 crore VASPL investment

scanx.trade, 10 Aug

Compare with

Equitymaster, 13 Oct

Valiant Lab Standalone June 2026 Net Sales at Rs 73.42 crore, up 43.94% Y-o-Y

Moneycontrol.com, 11 Aug

Valiant Laboratories consolidated net profit rises 1059.34% in the June 2026 quarter

Business Standard, 11 AugResults

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

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

MiddlingFinancial Health · Valuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 5 high-severity red flags sit above this conclusion and should be read first.

4 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑