Zim Laboratories: Palatable Medicine for your Portfolio?

R&D-Oriented Company

  • Therapy-agnostic delivery solutions and innovative technology platforms that may reduce cost of treatment, improve patient adherence, improve metabolism or offer some other benefits.
    • Thinoral: Oral Thin Films (OTF), Mucoadhesive Films
    • Taste masking granules
    • Liquid in pellets
    • Nano particulate granulation
  • Over 100 people in R&D, around 500 employees
  • Spent Rs.55.39 crore on R&D in the last three years and plans to maintain R&D expenses in the range of 7% of revenue in the future
  • 40 registered products and 130 products in the pipeline for overseas markets
  • 7 new innovative products developed in the R&D pipeline and another 9 under development expected to be ready in FY24.
  • Around Rs 400cr market cap (at CMP around Rs 80, 7 May 2023) and around Rs 400cr revenue
  • Around 72% from pharmaceuticals and 28% from neutraceuticals. 85% of the revenue comes from exports.
  • The company is focused on harvesting its work on OTF, including 7 patents and partnerships with pharma companies in developed markets. OTF is used for both pharma and neutraceuticals. However, OTF business still is in its infancy considering only Rs 10cr revenue came in FY22.

The global oral thin films market was valued at USD 2.9 billion in 2021 and is projected to grow at 9.3% CAGR from 2022 to 2031.


Consolidated Results

Balance Sheet

Company Structure


  • SIA ZIM Laboratories Limited, Latvia 100% Subsidiary
    • For Registration of products and marketing efforts
      in the EU.
  • ZIM Laboratories FZE, Sharjah , UAE 100% Subsidiary
    • For Business Development and Marketing in MENA
      and Africa Region.
  • ZIM Health Technologies Limited, India 100% Subsidiary
    • For Advisory and Support Services to ZIM on
      overall R&D and Product Development for the
      Pharmerging and Developed Markets.
  • ZIM Thinorals Private Limited, India 100% Subsidiary
    • Created for OTF Business.


  • Share capital increased to nearly 49 crores after bonus shares issued in Dec 2022
  • Promoter has around 33%
  • Among the public shareholders, Mathew Cyriac bought around 22% shares from AA Development Capital Fund in FY22, and Zakir S Vali has around 17.5%.


  • Indifferent financial performance so far. Revenue is growing slowly (7% CAGR in the last 5 years).
  • Low operating margin of around 13%. High R&D spending partially explains this.
  • Reduced bottomline during the pandemic years suggests that the company has limited pricing power.
  • Revenue concentration. 5 products contribute 73%, 5 customers contribute 50% in FY22.
  • Rs 32 cr was spent on bonus shares (Nov 2022) while the company still had more than Rs 60 cr debt (as of Sept 2022). This does not point to prudent financial handling. Furthermore, the number of shares increased to as high as 4.9 crores.
  • The company has rejected the recent news reports (Apr 2023) that Zim, along with other companies, has received show-cause notice from DGCI.

Preliminary Conclusion

The company seems to have a long runway for growth considering its patent-protected innovations and growing number of partnerships and product registrations. At 15PE, the current valuation is undemanding although not cheap. Will the company be able to grow its revenue at a faster than before pace overall, and particularly in the OTF segment over the new few quarters? A prudent investor would monitor the revenue growth in the company before investing a big sum.





I have a miniscule position in the stock for tracking.

Please do your own research before investing. I am not a registered investment advisor and none of the above constitutes investment advice.


Any idea on the moats around the business?

1 Like

Q1 FY24 Bad results. Revenue down. Profits evaporated. Pls share your outlook for future from current situation.


Nicely explain👍