At a Glance
NGL Fine-Chem, the small-cap pharma darling (and occasional horror story), posted a Q1 FY26 PAT of ₹9.24 crore, EPS ₹14.96, and sales ₹104.2 crore. Margins finally clawed back to double digits (10.5% OPM) after multiple quarters of flatlining. Yet, annual profit growth is stuck in reverse gear with a TTM PAT of ₹21 crore. The stock trades at a nosebleed P/E of 39, giving Dalal Street a mild migraine.
Introduction
If Bollywood made a movie on NGL Fine-Chem, it would be titled “Return of the Margins – But for How Long?” After bleeding profit margins in FY24 and FY25, the company delivered a Q1 FY26 where operating profit margins crept to 10.5%. Investors are wondering: Is this the comeback, or just another filler episode? Revenue crossed ₹100 crore for the first time in a single quarter—applause—but profit barely doubled from Q4 FY25 lows. Dividend? A meagre 0.13% yield, proving the company believes in reinvesting profits (or hoarding cash for a rainy day). With stock price halved from its 52-week high, it’s redemption or bust.
Business Model (WTF Do They Even Do?)
NGL Fine-Chem manufactures veterinary APIs (active pharmaceutical ingredients) that treat everything from worms to protozoa—basically saving animals while saving profits. Its portfolio includes 39 APIs, primarily for antiprotozoal and anthelmintic therapy, serving the global animal health industry. They also produce intermediates and finished dosage forms, with 80% revenue from exports. The business depends on pricing power in niche veterinary APIs, but competition, raw material costs, and regulatory scrutiny often chew into margins.
Auditor’s roast: They’re a “vet pharma” but their stock behaves like a crypto coin—wild swings with every margin update.
Financials Overview
- Q1 FY26 Revenue: ₹104.2 cr (up 14.8% YoY, up 9.7% QoQ)
- Operating Profit (EBITDA): ₹10.9 cr (OPM 10.5%, up from 6.7% last quarter)
- PAT: ₹9.24 cr (vs ₹0.54 cr in Q4 FY25, YoY flat)
- EPS: ₹14.96
Annualized EPS ~₹60 → P/E ≈ 21.9x (on Q1 annualized) but on TTM EPS ₹34 → P/E ≈ 38.9x (as screener shows). Margins finally stabilised, but TTM PAT growth (-50%) still stinks.
Revenue is growing at 6% CAGR (TTM), profits falling at -25% 3Y CAGR. Investors are holding on with a mix of patience and sedatives.
Valuation
Time to pull out the calculator:
- P/E Based:
- TTM EPS ₹34 × P/E 25 (reasonable small-cap pharma) → ₹850
- At current 39× → fair value ≈ ₹1320 (spot price justified only if margins sustain)
- EV/EBITDA:
- FY25 EBITDA ₹35 cr × 12× multiple → EV ₹420 cr → Equity value ~₹350 cr → ₹570/share.
- DCF:
- Assume FCF ₹20 cr, growth 8%, discount 12% → PV ≈ ₹900–₹1100.
🎯 Valuation Range: ₹850–₹1200.
Current price ₹1313 suggests the market expects a heroic comeback.
What’s Cooking – News, Triggers, Drama
- Q1 FY26 results show a rebound in profitability; management commentary awaited.
- Export markets recovering post‑regulatory overhang.
- No major capex, but working capital cycle improving (50 days).
- Promoter stake stable at 72.7%; public float tight.
- Stock still down 50% YoY—sentiment fragile.
- Awaiting new veterinary API launches to drive FY26 growth.
Balance Sheet
| (₹ Cr) | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Total Assets | 287 | 356 | 433 |
| Borrowings | 32 | 34 | 77 |
| Net Worth | 222 | 263 | 282 |
| D/E Ratio | 0.14x | 0.13x | 0.27x |
💬 Auditor quip: Debt tripled in FY25 but still low; cash is minimal; assets grew but returns are crawling.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating CF | 35 | 20 | 36 |
| Investing CF | -27 | -27 | -35 |
| Financing CF | -1 | -1 | -1 |
👀 Verdict: They generate cash, but invest it all back; financing outflow negligible. Cash hoard = none, aggression = high.
Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 11% | 20% | 8% |
| ROCE | 12% | 20% | 9% |
| PAT Margin | 7% | 12% | 6% |
| P/E | 25× | 30× | 39× |
| D/E | 0.14× | 0.13× | 0.27× |
Roast: ROE halved, P/E doubled—this is what stock market comedy looks like.
P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT |
|---|---|---|---|
| FY23 | ₹278 cr | ₹35 cr | ₹20 cr |
| FY24 | ₹339 cr | ₹54 cr | ₹41 cr |
| FY25 | ₹368 cr | ₹35 cr | ₹21 cr |
💬 FY24 was good, FY25 was a faceplant, FY26 Q1 hints at stabilization.
Peer Comparison
| Company | CMP (₹) | P/E | ROE | Sales (₹ Cr) | PAT (₹ Cr) |
|---|---|---|---|---|---|
| Sun Pharma | 1629 | 34× | 17% | 53,777 | 2,868 |
| Divi’s Lab | 6361 | 77× | 15% | 9,360 | 662 |
| Torrent Pharma | 3678 | 61× | 26% | 11,835 | 548 |
| NGL Fine-Chem | 1313 | 39× | 8% | 382 | 21 |
💬 Tiny fish in a big pharma pond; premium valuation for small scale = risky.
Miscellaneous – Shareholding, Promoters
- Promoter Holding: Stable at 72.7% (high, skin in the game)
- FII/DII Holding: Virtually zero
- Public Holding: 27%
- No IPO drama, no big M&A—quiet player.
EduInvesting Verdict™
NGL Fine-Chem is a classic small-cap pharma: niche products, high promoter stake, export-driven, but volatile in margins. Q1 FY26 looks like a margin comeback, but annual trends still weak. Debt is rising, returns shrinking, and stock trades at rich valuations for a company with inconsistent growth.
Strengths:
- Strong promoter backing
- Niche veterinary API dominance
- Working capital cycle improving
Weaknesses:
- Erratic margins, profits halved in FY25
- High valuation vs peers
- Low dividend
Opportunities:
- New API launches
- Margin expansion through better mix
- Export rebound
Threats:
- Raw material price spikes
- Regulatory risks in export markets
- P/E compression if growth stalls
Final Take:
At ₹1,313, the stock prices in a turnaround story. If FY26 delivers consistent 10%+ OPM and PAT growth, it might justify current levels. Otherwise, expect more volatility. Income-seekers, look elsewhere; this one’s a growth bet with a sarcastic sense of humor.
Written by EduInvesting Team | August 2025
SEO Tags: NGL Fine-Chem, Q1 FY26 results, veterinary API stocks, small-cap pharma India, pharma analysis
