🧠 At a Glance
Kwality Pharmaceuticals makes 3,000+ formulations, exports to over 80 countries, is EU-GMP and ANVISA certified… and yet, most investors think it’s a generic supermarket. But wait—this obscure pharma smallcap just clocked ₹116 Cr in quarterly revenue and a 100% 1-year stock rally. Multibagger dreams or IV-drip hallucinations?
1. 🧪 WTF Do They Even Do?
Kwality Pharmaceuticals Ltd (KPL) is not your neighbourhood druggist. It:
- Makes injectables, biologics, cephalosporins, oncology meds—you name it
- Is certified by ANVISA (Brazil) & EU-GMP (Europe) → global quality seal
- Owns over 3,000 formulations across 25+ therapeutic areas
- Operates plants in India (Punjab) & exports across South America, Africa, and Asia
- Recently expanded biologics and oncology segments
So yeah, it’s not just syrup bottles and paracetamol tablets.
2. 📊 Financials Overview: Profit, Margins, ROE, Growth
Revenue Trend (Consolidated)
| FY | Revenue (₹ Cr) | YoY Growth |
|---|---|---|
| FY21 | 262 | – |
| FY22 | 456 | +74% 🚀 |
| FY23 | 251 | -45% 😵 |
| FY24 | 307 | +22% |
| FY25 | 370 | +20% |
Net Profit
| FY | Net Profit (₹ Cr) | Margin | EPS (₹) |
|---|---|---|---|
| FY21 | 15 | 5.7% | 14.6 |
| FY22 | 120 | 26% (🔥) | 115.6 |
| FY23 | 19 | 7.5% | 18.7 |
| FY24 | 24 | 7.8% | 22.9 |
| FY25 | 40 | 10.8% | 38.4 |
- OPM is stable at 22% – a rarity in pharma smallcaps
- 3Y Profit CAGR = -31% (thanks to FY23 crash), but FY25 is recovery mode
- ROE = 16.3%, ROCE = 18.4% — healthy but not mind-blowing
3. 📉 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹1,015 |
| Market Cap | ₹1,053 Cr |
| P/E | 26.4x |
| P/B | 4x |
| EV/EBITDA | ~14x (est) |
🧮 Fair Value Calculation:
Let’s apply a 15x–20x PE on FY25 EPS of ₹38.4:
- Low FV = ₹576
- High FV = ₹768
So, CMP is running a bit hot at 26x. But if FY26 EPS crosses ₹50, you’re back in multibagger territory.
⚠️ Valuation Verdict: Slightly ahead of fundamentals. Not a scam, but not bargain-bin either.
4. 📢 What’s Cooking – News, Triggers, Drama
- ✔️ Strong Q4FY25: ₹116 Cr in sales, ₹14 Cr PAT — highest ever
- ✔️ Expansion in Latin America, Africa
- ❌ No dividends. Zero. Nada. Ever.
- ❌ High receivables — Debtor days = 152 😬 (vs. 55 in FY22)
- 🧪 Plans to expand biologics and niche injectables
Bonus Trigger: Low float — just ₹1,050 Cr market cap, and thin volumes → perfect for wild moves 🚀
5. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Equity | ₹10 Cr |
| Reserves | ₹254 Cr |
| Borrowings | ₹112 Cr |
| Net Worth | ₹264 Cr |
| Debt/Equity | 0.42x ✅ |
💡 Not heavily leveraged, but debt has doubled in 3 years.
6. 💸 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | FCF Trend |
|---|---|---|
| FY22 | ₹61 Cr | Positive |
| FY23 | ₹41 Cr | Stable |
| FY24 | ₹43 Cr | |
| FY25 | ₹53 Cr | Back on track |
FCF looks okay, but negative investing cash flow year after year = expansion mode + asset-heavy growth.
7. 📊 Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 16.3% |
| ROCE | 18.4% |
| Debtor Days | 152 🥵 |
| Inventory Days | 167 |
| CCC | 208 days |
| EPS (FY25) | ₹38.4 |
| Dividend Yield | 0% |
Kwality’s ratios scream: “We’re profitable, but cash stuck in the system.”
8. 💰 P&L Breakdown – Show Me the Money
- Sales: ₹370 Cr (FY25)
- Operating Profit: ₹80 Cr
- PAT: ₹40 Cr
- OPM: 22% (very solid for smallcap pharma)
- Tax Rate: 24–26% steady
9. 🧬 Shareholding – Who’s In, Who’s Out?
| Category | % Holding (Mar 2025) |
|---|---|
| Promoters | 54.82% |
| DIIs | 0.32% |
| Public | 44.86% |
🧃 Promoter holding stable. No big-name mutual funds or anchors yet — but that can change fast in smallcaps.
📦 EduInvesting Verdict™
Kwality Pharma has one foot in WHO-GMP manufacturing and another in the rollercoaster of working capital hell. It’s the kind of smallcap that multiplies fast, falls faster, but occasionally delivers knockout quarters like Q4FY25.
If you’re a pharma nerd who loves injectables, low-float microcaps, and volatility… you’ve found your flavour.
Just don’t expect a dividend. This stock pays only in adrenaline.
🧮 Fair Value Range: ₹576 – ₹768
(based on 15x–20x FY25 EPS)
✍️ Written by Prashant | 📅 June 28, 2025
Tags: Kwality Pharma, Smallcap Pharma, Biologics, Multibagger, Earnings Recap, Stock Analysis, EduInvesting
