Akums Drugs and Pharmaceuticals Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹731.00−₹18.80 (−2.51%)

DalalBaazaar Score

56 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by high debt relative to equity, small-cap size, which brings sharper price swings.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

The 60-second version of Akums Drugs and Pharmaceuticals Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Akums Drugs and Pharmaceuticals Limited manufactures and sells pharmaceutical products and active pharmaceutical ingredients India and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees7,337

Annual revenue₹4,251 Cr

How does it make money?

Turns over ₹4,251 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹15 left at the operating level before interest, tax and depreciation. Each of its 7,337 employees supports ₹57.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹57.9 lakh

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, DR. REDDY S LABORATORIES, CIPLA LTD, DIVI S LABORATORIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 10.8% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE14.5%

What is the outlook?

3 analysts covering the stock expect revenue to grow about 15.0% and earnings to grow about 25.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+15.0%

Est. earnings growth+25.4%

Analysts3

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +22% while net margin moved +120% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+22%

Margin effect+120%

DalalBaazaar Score

56/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 7.7% is weak
✗ ROE has fallen by 5.5 points over the period

Quality vs. Valuation

Company Quality

59/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

55/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

38.4x

2Y Median

46.6x

28 monthly readings · mean 60.3x · range 18.8x–143.4x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 18% below its 2y median of 46.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 15% above the peer median of 33.3x.

vs. its own history

Fair

46.6x median over 28 months · -18%

vs. sector peers

Fair

33.3x median of 4 peers · +15%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

17.0x

PEG

0.98

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 9.6% to 15.2% over 3 years.
Debt is being paid down
Total debt is down 69% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 13.2% to 7.7% — each rupee of shareholder capital earns less than it did.

Red Flags

2 items require attention · 1 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 5.76x — earnings must service borrowings before shareholders see anything.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 12.4x to 5.3x.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 9.6% to 15.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 69% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 5.76x. Interest is payable whether or not the business has a good year.
Growth barely outpaces inflation
Revenue compounding at 7.0% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 13.2% to 7.7%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 13%✓ 15.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 5% a year✓ 7.0% CAGR
Latest reported year was 13.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹951 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 10.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 5 neutral · 2 weak

Market Cap

₹11,192 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

38.4x

Fair

Fairly valued against the generic band

P/B Ratio

3.38x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹19.05

Profitable

Profitable on a per-share basis

ROE

7.7%

Weak

Weak capital efficiency

ROCE

10.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

5.76x

High

High leverage

Revenue Growth (YoY)

13.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

57.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.14%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹951 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

21.4x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

11.5%

Average

Average margins

Net Margin

6.5%

Average

Average bottom-line conversion

Current Ratio

3.25

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.56

Defensive

Steadier than the market

52W Range Position

75%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

793.7 / 769.0

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

28.7

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,475 Cr	₹4,020 Cr	₹4,071 Cr	₹4,251 Cr	+7.0%
EBITDA	₹335 Cr	₹516 Cr	₹505 Cr	₹645 Cr	+24.4%
EBITDA Margin	9.6%	12.8%	12.4%	15.2%	—
PAT (Net Profit)	₹95 Cr	-₹4 Cr	₹338 Cr	₹255 Cr	+39.1%
EPS	₹6.03	₹-0.28	₹22.6	₹16.67	+40.4%
ROE	13.2%	-0.6%	11.1%	7.7%	—
ROCE	9.8%	0.2%	11.7%	10.8%	—
Total Debt	₹619 Cr	₹565 Cr	₹88 Cr	₹192 Cr	-32.3%
Free Cash Flow	-₹152 Cr	₹187 Cr	₹193 Cr	₹951 Cr	—

🟢 Revenue has grown at 7.0% a year over 3 years.

🟢 EBITDA has grown at 24.4% a year over 3 years.

🟢 EBITDA Margin has risen from 9.6% to 15.2% over 3 years (+5.5 pts).

🟢 PAT (Net Profit) has grown at 39.1% a year over 3 years.

🟢 EPS has grown at 40.4% a year over 3 years.

🔴 ROE has fallen from 13.2% to 7.7% over 3 years (-5.5 pts).

🟢 ROCE has risen from 9.8% to 10.8% over 3 years (+1.0 pts).

🟢 Total Debt has shrunk at 32.3% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹152 Cr to ₹951 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹5,447 Cr

Total Liabilities

₹2,116 Cr

Cash & Equivalents

₹386 Cr

Operating Cash Flow

₹1,181 Cr

Capex

-₹231 Cr

Shareholding (proxy)

Institutional Holding

12.6%

Insider Holding

84.9%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

03 Jul 2026

Analyst Consensus

Recommendations

3 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹863.33

+18.1% vs CMP

Target Range

₹850 – ₹880

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
DR. REDDY S LABORATORIES	31.0x	8.8%
CIPLA LTD	31.8x	9.8%
DIVI S LABORATORIES LTD	83.0x	17.5%

Recent News

5 mixed1 general

Akums Drugs and Pharmaceuticals IPO opens today: Check issue size, price band, key dates and more

Upstox, 13 Oct

Akums Drugs & Pharmaceuticals Share Price Falls: Streak View

Univest, 09 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Earnings Beat: Akums Drugs and Pharmaceuticals Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Simply Wall Street, 12 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Akums Drugs and Pharmaceuticals Ltd (BOM:544222) (Q1 2027) Earnings Call Highlights: CDMO ...

Yahoo Finance, 12 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Akums Drugs rises 6% as ICICI Sec hikes target price; projects 39% upside

Business Standard, 17 FebAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Akums Drugs shares rally 9% hit 52-week high after Q1 results; stock up 67% YTD

The Economic Times, 10 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health · Growth

MiddlingBusiness Quality · Valuation

WeakProfitability · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑