Venmax Drugs and Pharmaceuticals Limited

Healthcare — Drug Manufacturers - Specialty & Generic · BSE

₹14.50−₹0.18 (−1.23%)

DalalBaazaar Score

42 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by moderate debt load, 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, 8:27 pm

Understanding the Business

Company site ↗

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

What does this company do?

Venmax Drugs and Pharmaceuticals Limited engages in the business of pharmaceutical products, drug intermediaries, and API's in India.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees2

Annual revenue₹8 Cr

How does it make money?

Turns over ₹8 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 2 employees supports ₹4.01 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.01 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 2.0% 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%

DalalBaazaar Score

42/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 2.0% is below 10% — capital is not working hard
✗ EBITDA margin of 3.5% is thin — little cushion if costs rise
✗ Net margin of 3.5% is slim

Quality vs. Valuation

Company Quality

37/ 100

Weak

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

Valuation

51/ 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

36.3x

3Y Median

139.0x

40 monthly readings · mean 116.1x · range 9.7x–265.7x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 74% below its 3y median of 139.0x. 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 is priced broadly in line with the peer median of 33.3x.

vs. its own history

Cheap

139.0x median over 40 months · -74%

vs. sector peers

Fair

33.3x median of 4 peers · +9%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

56.6x

PEG

11.21

Red Flags

3 items require attention · 1 high · 2 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹11 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 121% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 74% 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?

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

1EBITDA margin holds above 2%✓ 3.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹11 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 2.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 139.0x✓ 36.3x today
A re-rating above its own history needs a reason; without one it is just a higher price.

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 · 4 neutral · 3 weak

Market Cap

₹17 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

36.3x

Fair

Fairly valued against the generic band

P/B Ratio

1.13x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.4

Profitable

Profitable on a per-share basis

ROE

3.4%

Weak

Weak capital efficiency

ROCE

2.0%

Weak

Low return on total capital employed

Debt/Equity

1.41x

Moderate

Moderate leverage

Revenue Growth (YoY)

104.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

40.8%

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

-₹12 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

1.0%

Weak

Assets generate little profit

Operating Margin

4.7%

Weak

Thin margins leave little room for error

Net Margin

3.5%

Average

Average bottom-line conversion

Current Ratio

9.23

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-1.61

Defensive

Steadier than the market

52W Range Position

10%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

14.8 / 15.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

43.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	—	—	₹1 Cr	₹8 Cr	—
EBITDA	₹0 Cr	-₹0 Cr	-₹0 Cr	₹0 Cr	+6.3%
EBITDA Margin	—	—	-1.0%	3.5%	—
PAT (Net Profit)	₹0 Cr	₹0 Cr	-₹0 Cr	₹0 Cr	+3.2%
EPS	₹0.43	₹0.12	₹-0.02	₹0.21	-21.3%
ROE	—	—	-0.2%	1.8%	—
ROCE	—	—	-0.3%	2.0%	—
Total Debt	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	-2.0%
Free Cash Flow	-₹0 Cr	₹0 Cr	-₹2 Cr	-₹11 Cr	—

🟢 EBITDA has grown at 6.3% a year over 3 years.

🟢 EBITDA Margin has risen from -1.0% to 3.5% over 3 years (+4.5 pts).

🟢 PAT (Net Profit) has grown at 3.2% a year over 3 years.

🔴 EPS has shrunk at 21.3% a year over 3 years.

🟢 ROE has risen from -0.2% to 1.8% over 3 years (+2.0 pts).

🟢 ROCE has risen from -0.3% to 2.0% over 3 years (+2.3 pts).

🟢 Total Debt has shrunk at 2.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹16 Cr

Total Liabilities

₹2 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹11 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

64.5%

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

6 general

Venmax Drugs Turns Profitable with ₹24.82 Lakh Net Profit in FY26

scanx.trade, 15 May

Aanjaay Industries (BSE:524322) - Stock Analysis

Simply Wall Street, 15 Jul

Venmax Drugs and Pharmaceuticals Board Approves Amendment to Amalgamation Scheme Share Capital Structure

scanx.trade, 27 Mar

Venmax Drugs & Pharmaceuticals Confirms Non-Large Corporate Status Under SEBI Guidelines

scanx.trade, 14 Apr

Auto vs Pharma Sector: Which Industry Offers Better Returns?

Alice Blue, 23 Apr

Welcure Drugs and Pharmaceuticals (BSE:524661) - Stock Analysis

Simply Wall Street, 10 Sept

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongValuation

MiddlingFinancial Health

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

2 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑