1. 🧠 At a Glance
Dipna Pharmachem Ltd is an SME-listed pharma raw materials trader that grew revenue from ₹17 Cr in FY18 to ₹164 Cr in FY24… only to shrink to ₹125 Cr in FY25. While profit has hovered around ₹1 Cr annually, the company pulled a full promoter vanishing act — promoter stake crashed from 66.6% to 9.98% in just 18 months.
2. 🎬 Introduction with Hook
Imagine a pharma company that sells no formulations, owns no plants, and yet managed to:
- Raise ₹99.99 Cr via warrants,
- Dilute promoter holding to a laughable 9.98%, and
- Still trades at 60x P/E despite sub-3% margins.
Ladies and gentlemen, meet Dipna Pharmachem — your friendly chemical trader that’s now more famous for stock splits and fundraises than APIs and excipients.
3. 💼 Business Model (WTF Do They Even Do?)
Dipna is not a manufacturer. It’s a B2B pharma & chemical trader dealing in:
- APIs, solvents, excipients, intermediates, and formulations
- Acts as an import-export agent and contract manufacturer liaison
- Claims to offer WHO-GMP-compliant supply chains for its clients
But make no mistake — this is a thin-margin, working-capital-heavy trading business, not a science-driven pharma innovator.
4. 📊 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY25 |
|---|---|
| Sales | ₹125 Cr |
| Net Profit | ₹1 Cr |
| OPM % | 3% |
| ROE | 2.55% |
| ROCE | 6.11% |
| EPS (FY25) | ₹0.40 |
| Market Cap | ₹58.7 Cr |
| P/E | 60.6x |
📉 Growth trend?
- FY24 revenue: ₹164 Cr → FY25: ₹125 Cr (↓24%)
- Net profit flat at ~₹1 Cr
- OPM stuck between 2–3% for 6 straight years
This is the definition of a plateau.
5. 💸 Valuation – Is It Cheap, Meh, or Crack?
Let’s try a grounded DCF-style sanity check.
- Assuming FY25 EPS of ₹0.40 sustains
- A reasonable P/E for a low-margin B2B trading biz: 20x
👉 FV = ₹0.40 x 20 = ₹8/share
Even if we assume EPS magically grows to ₹1.00, fair value would be ₹20
Edu Fair Value Range: ₹8 – ₹20
(Current CMP = ₹24.4 = overbought)
But wait… there’s more dilution coming.
6. 🍿 What’s Cooking – News, Triggers, Drama
2024–25 Timeline of Shenanigans:
- ✅ Feb 2025: ₹99.99 Cr fundraise via warrants approved 💰
- ✅ Jul 2024: Preferential allotment passed 🧾
- ✅ May 2024: Share split and capital increase approved 🔨
- ✅ Jan 2024: Rights issue for 1.29 Cr equity shares 📈
- ✅ Apr 2024: ₹12.75 Cr sales order from Fact Trading Co. (biggest single order in years)
🧨 But despite all that: revenue fell, profit fell, and promoter holding… evaporated.
7. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Equity Capital | ₹24 Cr |
| Reserves | ₹14 Cr |
| Borrowings | ₹17 Cr |
| Other Liabilities | ₹77 Cr |
| Total Assets | ₹132 Cr |
⚠️ Debt + Payables = ₹94 Cr
- No fixed assets
- No tangible capex
- Basically a pass-through business with heavy vendor dependence
8. 💵 Cash Flow – Sab Number Game Hai
| Year | Cash from Ops | Cash from Fin | Net Cash Flow |
|---|---|---|---|
| FY25 | ₹-9 Cr | ₹-4 Cr | ₹-13 Cr |
| FY24 | ₹-5 Cr | ₹14 Cr | ₹8 Cr |
| FY23 | ₹-21 Cr | ₹26 Cr | ₹5 Cr |
💡 They raised funds to plug working capital gaps, not scale R&D or infra. And FY25 shows even that’s drying up.
9. 📐 Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 2.55% |
| ROCE | 6.11% |
| Debt/Equity | ~0.7x |
| EPS | ₹0.40 |
| Promoter Holding | 9.98% |
| P/E | 60.6x |
| Book Value | ₹16.0 |
| P/B Ratio | 1.53x |
🤏 Low ROE, high valuation = no go for long-term investors.
📛 Promoter holding <10% is usually a major governance red flag.
10. 📈 P&L Breakdown – Show Me the Money
| Year | Sales | Net Profit | EPS |
|---|---|---|---|
| FY22 | ₹73 Cr | ₹1 Cr | ₹0.37 |
| FY23 | ₹100 Cr | ₹1 Cr | ₹0.45 |
| FY24 | ₹164 Cr | ₹1 Cr | ₹0.45 |
| FY25 | ₹125 Cr | ₹1 Cr | ₹0.40 |
🔍 Flatline profit despite revenue rollercoaster
📦 Low margins across all years
📉 FY25 shrinkage with no clear explanation
11. 🥊 Peer Comparison – Who Else in the Game?
| Company | CMP | MCap | Sales (Qtr) | PAT | ROE | P/E |
|---|---|---|---|---|---|---|
| Sun Pharma | ₹1,672 | ₹4.01L Cr | ₹12,958 Cr | ₹2,389 Cr | 16.9% | 35x |
| Zydus | ₹983 | ₹98,923 Cr | ₹6,528 Cr | ₹1,255 Cr | 21.3% | 21x |
| Dipna | ₹24.4 | ₹58.7 Cr | ₹34 Cr | ₹0.64 Cr | 2.55% | 60.6x |
💥 Dipna trades at a higher P/E than Zydus and Sun Pharma
That alone should trigger the SEBI laugh track.
12. 🧪 Miscellaneous – Shareholding, Promoters
- 📉 Promoter Holding:
- Sep 2022: 66.56%
- Mar 2024: 9.98%
- 📊 Public Holding = 90%+
- 🕵️♂️ No big names in institutional holding
- 📣 Number of shareholders jumped from 992 to 2,652 within a year
This is classic SME pump-to-dump setup — not illegal, just… mechanical.
13. ⚖️ EduInvesting Verdict™
“Dipna started as a pharma trader. Now it’s trading stories more than substances.”
📉 Negatives:
- Valuation is completely unjustified
- Declining revenue in FY25
- Promoters have effectively exited
- Low margin, low moat, working capital drain
📈 Positives:
- Large ₹12.75 Cr sales order in Apr 2024
- Some topline growth until FY24
- Recent board approvals could signal a new phase (if executed well)
⚖️ Verdict:
For now, it looks like a valuation bubble disguised as a pharma trader.
Until promoter holding improves and profit scales, this is a stock for punters, not investors.
💰 Edu Fair Value Range = ₹8 – ₹20
(CMP ₹24.4 = too hot for current fundamentals)
✍️ Written by Prashant | 📅 08 July 2025
Tags: Dipna Pharmachem, SME stocks, pharma trading, microcap dilution, preferential allotment, promoter exit, EduInvesting deep dive
