At a Glance
Kopran’s Q1 FY26 numbers came in as underwhelming as a sugar-free dessert. Sales fell 3% YoY to ₹135 Cr, while PAT slumped 33% to ₹7.45 Cr. The company, known for its APIs like Atenolol, is trying to keep margins above water with an OPM of ~10%. With the stock down 35% in a year and ROE stuck at 7–8%, investors are starting to wonder – is this a pharma play or a patient waiting for a miracle drug?
1. Introduction
Kopran, once an active player in the Indian pharma scene, now oscillates between minor profits and occasional product launches. While big boys like Sun Pharma and Divi’s Lab dominate the API and formulations game, Kopran has been quietly making APIs for cardiovascular drugs and some intermediates. The growth needle? Barely twitching. The stock’s P/E of 23 looks reasonable, but given the growth stagnation, it’s like paying premium for a cold coffee.
2. Business Model (WTF Do They Even Do?)
Kopran runs a two-engine model:
- API Vertical (~54% of revenue): Through its subsidiary Kopran Research Labs. Focus on cardiovascular APIs, with Atenolol being the crown jewel.
- Formulations Vertical (~46%): Generic formulations sold domestically and overseas.
Revenue is heavily dependent on exports, raw material pricing, and regulatory approvals – the usual pharma cocktail.
3. Financials Overview
- Revenue Q1 FY26: ₹135 Cr (-3% YoY)
- PAT Q1 FY26: ₹7.45 Cr (-33% YoY)
- OPM: 10.4% (steady but uninspiring)
- EPS: ₹1.54
- FY25 Revenue: ₹630 Cr (+2%)
- FY25 PAT: ₹39 Cr (-24%)
Margins have slipped from historical highs due to input cost pressures and lower API pricing.
4. Valuation
Using three standard methods:
- P/E: EPS ₹7.24 × 15 = ₹108
- P/B: BV ₹107 × 1.5 = ₹160
- DCF: With slow growth assumptions, FV ≈ ₹150–₹170
Fair Value Range: ₹110 – ₹170
CMP ₹169 suggests it’s fully priced, with little margin of safety.
5. What’s Cooking – News, Triggers, Drama
- API Pricing: Global price pressures continue.
- Regulatory: No major USFDA issues recently (thankfully).
- Capex/Expansion: Minimal, with focus on efficiency.
- Key Risk: Commodity costs, forex, and regulatory delays.
6. Balance Sheet
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Assets | 650 | 743 | 844 |
| Liabilities | 135 | 153 | 178 |
| Net Worth | 391 | 443 | 470 |
| Borrowings | 75 | 99 | 148 |
Remark: Borrowings creeping up like unwanted interest on a credit card.
7. Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 34 | 43 | 42 |
| Investing | -13 | -44 | -56 |
| Financing | -20 | 1 | 26 |
Commentary: Operating cash positive, but investing cash burns – expansion or just bleeding?
8. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 8% | 7.9% | 7.6% |
| ROCE | 14% | 14% | 10% |
| P/E | 24 | 25 | 23 |
| PAT Margin | 9% | 12% | 11% |
| D/E | 0.2 | 0.22 | 0.31 |
Verdict: Neither sexy nor stressy – just sleepy.
9. P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 551 | 615 | 630 |
| EBITDA | 52 | 74 | 73 |
| PAT | 27 | 51 | 39 |
Commentary: Revenue crawling, profits crawling slower.
10. Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Sun Pharma | 52,578 | 11,454 | 36 |
| Divi’s Lab | 9,360 | 2,190 | 81 |
| Zydus Lifesciences | 23,242 | 4,644 | 22 |
| Kopran | 630 | 39 | 23 |
Commentary: Small-cap pharma stuck between underdog and underperformer.
11. Miscellaneous – Shareholding, Promoters
- Promoters: 44.4%
- FIIs: 0.8%
- DIIs: 0%
- Public: 55%
Promoter stake stable, public holding high – meaning retail is holding the bag.
12. EduInvesting Verdict™
Kopran is a classic mid-tier pharma: steady APIs, modest formulations, but no breakthrough story. Margins are decent, but growth is sluggish, and debt is inching up. The stock has corrected 35% in a year, making valuations reasonable but not screamingly cheap.
SWOT Snapshot:
- Strengths: Integrated API + formulations, healthy dividend payout (39%), export exposure.
- Weaknesses: Low ROE, stagnant growth, rising debt.
- Opportunities: API price uptick, new product filings.
- Threats: Regulatory hurdles, intense competition.
Unless management injects some adrenaline through product innovation or aggressive expansions, Kopran may remain a side character in the pharma blockbuster.
Written by EduInvesting Team | 29 July 2025
SEO Tags: Kopran Ltd, API Manufacturer, Pharma Smallcap, Q1 FY26 Results
