Bal Pharma Dividend 2026 — ₹1.20 Final Dividend, Yield, Record Date

Incorporated in 1987 and headquartered in Bengaluru, Bal Pharma Limited is a fully integrated small-cap pharmaceutical company and part of the Micro Labs group. It manufactures bulk drugs (APIs), prescription formulations, generics, pharma intermediates and Ayurvedic products, with therapeutic strength in anti-diabetes, anti-histamine, anti-inflammatory, dermatology, gastroenterology and cardiology. The company is among the larger producers and exporters of Gliclazide, a type-2 diabetes molecule.

With a market capitalisation of roughly ₹146 crore and annual revenue near ₹312 crore, Bal Pharma is a true micro-cap. Promoters hold 50.87%, with Shailesh Siroya as Chairman and Managing Director. Understanding this scale matters for reading the Bal Pharma dividend: the payout is small in absolute terms and sits against a highly leveraged balance sheet.

On a consolidated basis, Bal Pharma reported FY2025-26 revenue of about ₹312 crore (up roughly 3% year-on-year) with an operating profit of ₹32 crore and a steady operating margin near 10%. Reported net profit was approximately ₹6.3 crore (EPS ₹3.94). Return ratios are modest: ROCE 9.75% and ROE 7.79%.

The structural weight on the business is debt. A ₹17 crore annual interest bill consumes more than half of operating profit, dragging the interest coverage to roughly 1.9x and leaving pre-tax profit of only ₹6 crore. The dividend is therefore decided in the shadow of heavy financing costs rather than abundant surplus profit.

The most important fact about the Bal Pharma dividend is what it is not: it is not a 12% return. That number is calculated on the ₹10 face value. At the market price of about ₹91.70, the real yield is 1.31% — the headline overstates the actual income return by roughly 9 times.

The second point is proportion. The entire dividend costs the company only ₹1.91 crore, while its interest bill is ₹17 crore — the dividend is affordable precisely because it is tiny. The genuine debate for Bal Pharma Limited is a capital-allocation one: a company carrying ₹160 crore of debt is distributing cash rather than deleveraging faster.

Bal Pharma has held its final dividend at ₹1.20 per share for three consecutive years (FY24, FY25 and FY26), after a long stretch at ₹1.00. On disclosed facts, the payout is modest and comfortably funded by operating cash flow, so maintaining the current rate looks consistent with the company's past behaviour — though the company has not disclosed any forward dividend guidance.

Any future increase realistically depends on two things visible in the numbers: faster earnings growth (revenue has compounded at only ~3% over five years) and a lower interest burden. Until leverage eases, the Bal Pharma dividend is likely to stay a token-but-steady payout rather than a rising income stream. This is analysis of disclosed data, not a forecast.

The Board of Bal Pharma Limited recommended a final dividend of ₹1.20 per equity share of ₹10 each (12% of face value) for FY2025-26 alongside its audited results on 27 May 2026, subject to shareholder approval. Approval was obtained at the 39th Annual General Meeting on 24 September 2026.

Through its filing dated 27 August 2026 under Regulation 42 of SEBI (LODR) Regulations, 2015, the company fixed 17 September 2026 as the record date for determining eligible shareholders, with payment on or after 24 September 2026. The company also disclosed that dividend is taxable in shareholders' hands and that TDS applies at prescribed rates. These are the officially disclosed facts for the Bal Pharma dividend.

This is where retail investors are most often misled. The ₹1.20 dividend is 12% of face value but only 1.31% of the ₹91.70 market price. On the approximate price around the board declaration date (~₹79), the yield was closer to 1.5%.

A yield reality check confirms the 1.31% reflects a genuinely small payout, not a falling share price or a one-time special dividend. For context, large-cap pharma peers typically yield below 0.5%, so Bal Pharma's yield is above the pharma average — but still a low single-digit income return in absolute terms.

Bal Pharma's record qualifies it as a consistent payer with one interruption. The company paid ₹1.00 per share steadily through the late 2010s, suspended the dividend entirely in FY2019-20 — a year it posted a consolidated loss during the pandemic — then resumed at ₹1.00 and raised it to ₹1.20 from FY2023-24.

The growth trend is slow but real: the dividend rose 20% once in a decade (₹1.00 to ₹1.20). There have been no special dividends and no stock splits or bonus issues distorting the per-share history. The single FY2020 skip is the key forensic marker — it shows management will cut the Bal Pharma dividend when earnings turn negative, which is prudent but worth remembering.

Revenue has been broadly flat, moving from ₹281 crore (FY22) to ₹312 crore (FY26) — a five-year CAGR of only about 3-4%, which Screener flags as poor sales growth. Operating margins have held near 10%, so the business is stable but not expanding.

A forensic flag on reported profit: FY2025-26 pre-tax profit was roughly ₹6 crore, yet net profit was also near ₹6.3 crore because the effective tax rate was slightly negative (a tax credit). In other words, the bottom line was flattered by a low/negative tax charge rather than by stronger operations. EPS of ₹3.94 therefore overstates the underlying operating earnings quality, a nuance most aggregators miss.

Here the news is better. FY2025-26 operating cash flow was ₹31 crore against reported profit of ₹6.3 crore — cash generation far exceeded accounting profit, and operating cash conversion ran near 97% of operating profit. This is a genuine strength and a positive divergence (cash stronger than profit).

After heavy capital spending of about ₹21 crore (the company is expanding fixed assets), free cash flow was roughly ₹9 crore. The ₹1.91 crore dividend is therefore funded from current cash generation, not borrowings or asset sales — FCF covers it about 4.7 times. Working capital remains a watch-item, with inventory days near 269 and a cash conversion cycle of ~173 days.

This is the weakest link. Against a net worth of about ₹82 crore, Bal Pharma Limited carries borrowings of ₹160 crore — a gross debt-to-equity of roughly 1.95x. Debt has climbed steadily, from ₹140 crore (FY24) to ₹150 crore (FY25) to ₹160 crore (FY26), while the company kept paying dividends.

The ₹17 crore interest cost produces an interest coverage of only ~1.9x, which Screener explicitly flags as low. A clean standalone cash balance is Not Disclosed by Company in summary data; disclosed investments are just ₹2 crore, so net debt is approximately ₹158 crore. For a dividend-seeker, the balance sheet is the single biggest reason to treat the Bal Pharma payout cautiously.

On the four-test scorecard, the Bal Pharma dividend passes three (earnings, operating cash flow and free cash flow all cover it with room to spare) but fails the balance-sheet test. Verdict: Moderately Sustainable — the payout is affordable today because it is small, but the rising debt means it is a discretionary token rather than a protected, growing commitment.

With promoters holding 50.87%, roughly ₹0.97 crore of the ₹1.91 crore dividend flows to the promoter group, while public and minority shareholders (48.87%) share about ₹0.93 crore. Because the dividend is declared uniformly per share, every shareholder is treated equally on a per-share basis — there is no structural tilt toward promoters.

A relevant disclosed development: the company allotted 10 lakh convertible warrants to the promoter at ₹84 each (₹8.4 crore), indicating the promoter is injecting capital rather than only extracting dividends. Investors should note this can mildly dilute the share count on conversion, which would slightly spread future per-share dividends.

Since FY2020-21, dividends are taxable in the shareholder's hands at their applicable income-tax slab rate; the company deducts TDS. As the Bal Pharma intimation confirms, no TDS is deducted for resident individuals with a valid PAN if total dividend from the company does not exceed ₹10,000 in the year. Above that, TDS applies at 10% (20% without PAN); NRIs are generally taxed at 20% plus surcharge/cess under Section 195 unless treaty relief applies. Forms 15G/15H allow eligible residents to seek nil deduction.

This is general information, not tax advice. Consult a qualified tax adviser for your situation.

The Bal Pharma Limited FY2025-26 final dividend of ₹1.20 per share is best understood plainly: a 12% headline that is really a 1.31% yield, costing the company a modest ₹1.91 crore. On the positives, it is backed by strong operating cash flow (₹31 crore), covered 3.3x by earnings, and sits on a three-year track record at the current rate.

On the negatives, it coexists with ₹160 crore of rising debt, thin interest coverage, low returns and tax-flattered profit — and the company has previously suspended the dividend in a loss year. For income-focused readers, the yield is small; for value-focused readers, the leverage is the real story. We present the facts, the risks and the monitoring points so you can decide for yourself.