1. At a Glance
A small-cap pharma player with big-boy ambitions, Medicamen Biotech Ltd (MBL) is making moves in the oncology space and regulated markets. But behind the FDA stamps and EU-GMP medals, lies a company grappling with weak margins, slowing growth, and the oh-so-dreaded P/E of 81.
2. Introduction with Hook
Imagine a pharma company that’s like the kid who topped one test (read: USFDA approval) and is now walking around school like they invented penicillin. That’s Medicamen Biotech.
- P/E ratio of 80+: Because who doesn’t love paying elite prices for sluggish growth?
- Net Profit CAGR: -13% over 5 years, and -24% over 3 years. This stock is literally aging in reverse.
And yet… this is a company with:
- USFDA, EU GMP approvals ✅
- A shiny new CDMO contract with a US distributor ✅
- A modest ₹531 Cr market cap screaming “Take me seriously!” ✅
So, is this just a glorified mole on the pharma body, or the next breakout molecule?
3. Business Model (WTF Do They Even Do?)
MBL is a research-led pharmaceutical manufacturer, playing in the low-cost generic space, with a particular focus on oncology formulations.
They offer:
- Formulations in beta-lactam, non-beta-lactam, cephalosporin
- Export-heavy revenue model (regulated markets)
- Institutional selling to hospitals, gov agencies (less MRP games, more tender drama)
- CDMO ambitions (Contract Dev + Manufacturing Org)
Parent company? Shivalik Rasayan Ltd – a pesticide/chemical player holding ~41.6% of MBL. Corporate family dinners must be… interesting.
4. Financials Overview
Revenue (₹ Cr):
| FY | Revenue | Net Profit | OPM % | ROE % |
|---|---|---|---|---|
| 2019 | 123 | 12 | 14% | 7% |
| 2022 | 115 | 15 | 21% | 12% |
| 2023 | 141 | 15 | 17% | 10% |
| 2024 | 179 | 9 | 13% | 8% |
| 2025 | 163 | 7 | 9% | 3% |
- Operating margins have collapsed like a sandcastle at high tide
- Net profit halved in 2 years
- OPM from 21% to 9% in 3 years
5. Valuation
Let’s talk multiples and magic:
- Current Price: ₹392
- EPS (TTM): ₹5.59
- P/E: 81.0
- Book Value: ₹167 → P/B: 2.34
Fair Value Estimate:
- Using 15x P/E on forward EPS of ₹6.5 = ₹97
- Using P/B method, assuming 2x book = ₹334
- Using optimistic DCF (assumes margin expansion + 20% growth): ₹450
Fair Value Range: ₹95–₹450
(Yes, that wide. Because this stock is basically doing yoga between aspiration and reality.)
6. What’s Cooking – News, Triggers, Drama
Here’s a kitchen full of developments:
- USFDA approval for Bortezomib injection (their first ANDA!)
- CDMO contract signed with XGX Pharma (US) for 6 products
- Distribution agreements in Europe inked in April 2025
- Preferential issue of ₹79 Cr @ ₹530/share (umm… current price ₹392)
- Entry into South African & Ethiopian markets
- Haridwar oncology plant gets USFDA clean chit
- EU GMP certified Bhiwadi unit
TL;DR: The kitchen is cooking, but the dining table (read: income statement) still looks underfed.
7. Balance Sheet
| Metric | FY19 | FY23 | FY25 |
|---|---|---|---|
| Equity Capital | ₹12 Cr | ₹13 Cr | ₹13.56 Cr |
| Reserves | ₹75 Cr | ₹181 Cr | ₹200 Cr |
| Borrowings | ₹12 Cr | ₹26 Cr | ₹33 Cr |
| Total Assets | ₹137 Cr | ₹279 Cr | ₹297 Cr |
Key Points:
- Debt manageable, but not tiny
- Assets growing, but not translating into profits
- Working capital cycle = 252 days = sloth-level speed
8. Cash Flow – Sab Number Game Hai
| FY | CFO (₹ Cr) | CFI | CFF | Net Cash Flow |
|---|---|---|---|---|
| 2021 | ₹13 | -₹18 | ₹6 | ₹1 |
| 2023 | -₹6 | -₹6 | ₹29 | ₹17 |
| 2025 | -₹7 | -₹2 | -₹2 | -₹11 |
Key Problems:
- Consistently negative operating cash flow
- Capex minimal, but inventory and debtors eating up cash
- No real FCF to speak of
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 10% | 8% | 3% |
| ROCE | 10% | 8% | 5% |
| OPM | 17% | 13% | 9% |
| Debtor Days | 169 | 112 | 155 |
| CCC (Cash Conversion) | 156 | 193 | 239 |
This is not sexy. This is borderline diabetic. That cash conversion cycle needs insulin.
10. P&L Breakdown – Show Me the Money
| FY | Revenue | EBITDA | Net Profit | EPS | OPM % |
|---|---|---|---|---|---|
| 2022 | ₹115 Cr | ₹24 Cr | ₹15 Cr | ₹12.2 | 21% |
| 2023 | ₹141 Cr | ₹24 Cr | ₹15 Cr | ₹11.7 | 17% |
| 2024 | ₹179 Cr | ₹24 Cr | ₹9 Cr | ₹8.6 | 13% |
| 2025 | ₹163 Cr | ₹14 Cr | ₹7 Cr | ₹5.6 | 9% |
Key: Flat EBITDA, shrinking net profit. Cost pressures real.
11. Peer Comparison
| Company | M-Cap (₹ Cr) | P/E | OPM % | ROE | Sales (₹ Cr) |
|---|---|---|---|---|---|
| Sun Pharma | 4,01,168 | 35 | 28.75% | 17% | ₹52,578 |
| Divi’s Lab | 1,81,447 | 82 | 31.71% | 15% | ₹9,360 |
| Cipla | 1,19,945 | 23 | 25.87% | 18% | ₹27,548 |
| Zydus Life | 98,571 | 21 | 30.37% | 21% | ₹23,241 |
| Medicamen | 531 | 81 | 8.53% | 3% | ₹162 |
Verdict: P/E of a rockstar, performance of a college band. Overvalued relative to quality peers.
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: Down from 43.2% to 40.46% (Apr 2025)
- Public Shareholding: 58.6% (Retail-heavy)
- FIIs + DIIs: Barely 4%
- Preferential Allotment: Done @ ₹530 in Apr 2025 (a bold flex)
13. EduInvesting Verdict™
Medicamen Biotech is like that underdog trying to box in the heavyweight division. Sure, it’s got certifications, a decent export pipeline, and even landed in the USFDA VIP club. But margins are weak, profitability is on a drip, and cash flow is… on life support.
The stock is priced like it’s already cured cancer. Reality? It’s still doing internships in pharma’s basement.
Bull Case: CDMO deals convert, US business scales, margins expand
Bear Case: Margins remain depressed, preferential allotment becomes an overhang, capex yields zero
Metadata
– Written by EduInvesting | July 12, 2025
– Tags: Pharma, Smallcap, Oncology, USFDA, Medicamen, Shivalik, CDMO, Biotech, SmallcapOverhype
