The aim of present work was to explore the temperature-composition phase diagram for detection of formation of a multi-component system. Fusion of model drug Nimesulide (NIM) and Nicotinamide (NIC) was prepared and evaluated for possible interaction using thermal analysis. Phase diagram and the appearance of single endotherm confirmed Eutectic formation with the molar ratio of 1:2 (NIM:NIC). Spray dried powder in same molar ratio showed improved functionality in terms of solubility (14 folds), dissolution (2 folds) in distilled water and drug content (92.27%). SEM study revealed that the particles of eutectic mixture were of nearly same size in all directions in shape with bigger particle size compared to the pure drug, which was responsible for its improved flow. The compressibility of prepared eutectic was greatly enhanced which was followed by formation of directly compressible tablets. FT-IR study explained the possibility of formation of hydrogen bond between both the components. Stability data proved the stable nature of the eutectic mixture as well as its prepared formulation. The study explained the way to prepare thermal phase diagram by taking solidus and liquidus points in DSC diagram, which was finally used as a confirmatory parameter for the formation of the eutectic. Simultaneous improvement in physicochemical and mechanical properties was highlighted. (C) 2019 The Society of Powder Technology Japan. Published by Elsevier B.V. and The Society of Powder Technology Japan. All rights reserved.