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Check Before You Invest : Everest Organics Ltd

BSE: 524790 NSE: ISIN: INE334C01029
  |   Sector:  Healthcare   |   Industry:  Pharmaceuticals & Drugs

Snapshot

Q.1 Which industry/sub-sector does Everest Organics Ltd belong to?
Everest Organics Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.
Q.2 Is Everest Organics Ltd a good quality company?
Everest Organics Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Everest Organics Ltd undervalued or overvalued?
Everest Organics Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 43.32 22.48
Price to Book 3.46 2.77
Price to Sales 1.34 0.64
EV to EBITDA 16.85 16.82
Q.4 Is Everest Organics Ltd a good buy now?
Everest Organics Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Everest Organics Ltd?
Everest Organics Ltd revenue growth is -19.1% for FY-2025, which is below its 5-year CAGR of -0.94%, indicating slower growth.

Q.2 Gross Profit margin of Everest Organics Ltd?
Everest Organics Ltd Gross profit margin which is the profit after deduction of direct costs, is 1.5% for FY-2025, which is below its 5-year median of 2.4%, indicating decreasing margins.

Q.3 Operating Profit Margin of Everest Organics Ltd?
Everest Organics Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 4.53% for FY-2025, which is in line with its 5-year median of 4.53% indicating stable margins.

Q.4 Net Profit Margin of Everest Organics Ltd?
Everest Organics Ltd Net Profit Margin is -0.81% for FY-2025, is below its 5-year median of 0.07%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 1.5 2.4
Operating Profit Margin (%) 4.53 4.53
Net Profit Margin (%) -0.81 0.07

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Everest Organics Ltd?
Everest Organics Ltd Return on Asset is -0.57%, which is below its 5-year historical median of 0.06%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Everest Organics Ltd?
Everest Organics Ltd Return on capital employed is 1.76% for FY-2025, which is below its 5-year historical median of 6.03%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Everest Organics Ltd?
Everest Organics Ltd Return on equity is -2.25% for FY-2025, which is below its 5-year historical median of 0.3%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Everest Organics Ltd?
Everest Organics Ltd Cash conversion cycle is 49 days, above its 5-year historical median of 29 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.81 1.1
ROE (%) -2.25 0.3
ROCE (%) 1.76 6.03
Cash Conversion Cycle 49 days 29 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Everest Organics Ltd?
Everest Organics Ltd Debt-to-Equity ratio is 0.69, which is above the industry average of 0.14, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Everest Organics Ltd?
Everest Organics Ltd Debt to cash flow from operations is -8.9, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Everest Organics Ltd?

Q.1 Promoter shareholding and pledge status of Everest Organics Ltd?
Promoters hold 59.58% of the Everest Organics Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Everest Organics Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Everest Organics Ltd vs industry peers?
Everest Organics Ltd revenue CAGR is -0.94%, compared to the industry median CAGR of 5.35%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -19.1 5.4
Gross Profit Growth (%) -50 14
Operating Profit Growth (%) -36.4 11.5
Net Profit Growth (%) 0 12
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.81 0.79
ROE (%) -2.25 9.17
ROCE (%) 1.76 11.52
Cash Conversion Cycle (days) 49.09 76

Valuation & price assessment

Q.1 Stock return of Everest Organics Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 25.9% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
25.9% -5% 37% -40.4%
Q.2 Valuation ratios of Everest Organics Ltd vs historical?
The current P/E ratio of 43.32 is higher than its historical median of 22.48, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 43.32 22.48 31.09
Price to Book 3.46 2.77 2.85
Price to Sales 1.34 0.64 2.82
EV to EBITDA 16.85 16.82 15.99

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