Asston Pharmaceuticals Limited

Healthcare — Drug Manufacturers - Specialty & Generic · BSE

₹107.53+₹5.12 (+5.00%)

DalalBaazaar Score

64 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:52 pm

Understanding the Business

Company site ↗

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

What does this company do?

Asston Pharmaceuticals Limited manufactures pharmaceutical products in India, West Africa, South Africa, and Asian countries.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees42

Annual revenue₹25 Cr

How does it make money?

Turns over ₹25 Cr a year. Of every ₹100 of sales, about ₹15 reaches shareholders as profit, with ₹26 left at the operating level before interest, tax and depreciation. Each of its 42 employees supports ₹60.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹60.6 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 12.2% 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 has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +290% while net margin moved -6% 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+290%

Margin effect-6%

DalalBaazaar Score

64/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

69/ 100

Good

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

Valuation

67/ 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

21.9x

1.4Y Median

18.8x

17 monthly readings · mean 22.9x · range 14.8x–72.4x

Sector Median

33.3x

median of 4 sector peers

⚠️Current valuation is approximately 16% above its 1.4y median of 18.8x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 34% below the peer median of 33.3x.

vs. its own history

Fair

18.8x median over 17 months · +16%

vs. sector peers

Cheap

33.3x median of 4 peers · -34%

vs. generic bands

Fair

15x–35x

EV/EBITDA

18.6x

PEG

0.40

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.13x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 53.2% to 9.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 53.5% to 12.2% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 6.9 points, from 32.5% to 25.6%.
🟡Receivables growing faster than salesFinancial
Receivables up 325% against revenue up 290% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 34% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 32.5% to 25.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 325% against revenue up 290%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 53.2% to 9.9%. 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
Micro 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

1Revenue growth stays above 43% a year✓ 57.3% CAGR
Latest reported year was 10.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 24%✓ 25.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹20 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 9%✓ 12.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 11 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
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 5 neutral · 1 weak

Market Cap

₹117 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

21.9x

Fair

Fairly valued against the generic band

P/B Ratio

2.36x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.92

Profitable

Profitable on a per-share basis

ROE

15.5%

Strong

Strong capital efficiency

ROCE

12.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.13x

Low

Conservative leverage

Revenue Growth (YoY)

10.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

37.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹25 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

-1.3%

Weak

Assets generate little profit

Operating Margin

-29.9%

Weak

Thin margins leave little room for error

Net Margin

15.2%

Good

Strong bottom-line conversion

Current Ratio

4.51

Comfortable

Healthy short-term liquidity

52W Range Position

72%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

99.1 / 97.8

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

64.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹7 Cr	₹16 Cr	₹25 Cr	₹25 Cr	+57.3%
EBITDA	₹2 Cr	₹3 Cr	₹6 Cr	₹7 Cr	+45.3%
EBITDA Margin	32.5%	17.8%	23.2%	25.6%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹4 Cr	₹4 Cr	+54.1%
EPS	₹1.24	₹1.6	₹4.53	—	—
ROE	53.2%	21.3%	34.9%	9.9%	—
ROCE	53.5%	33.1%	43.2%	12.2%	—
Total Debt	₹5 Cr	₹7 Cr	₹7 Cr	₹5 Cr	-0.9%
Free Cash Flow	-₹1 Cr	-₹4 Cr	-₹0 Cr	-₹20 Cr	—

🟢 Revenue has grown at 57.3% a year over 3 years.

🟢 EBITDA has grown at 45.3% a year over 3 years.

🔴 EBITDA Margin has fallen from 32.5% to 25.6% over 3 years (-6.9 pts).

🟢 PAT (Net Profit) has grown at 54.1% a year over 3 years.

🔴 ROE has fallen from 53.2% to 9.9% over 3 years (-43.3 pts).

🔴 ROCE has fallen from 53.5% to 12.2% over 3 years (-41.2 pts).

🟡 Total Debt has been broadly flat over 3 years (-0.9% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹52 Cr

Total Liabilities

₹13 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹10 Cr

Capex

-₹10 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

53.4%

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

6 general

Asston Pharmaceuticals Upper Circuit Streak: Day 2 Price and Data

Univest, 15 Oct

Asston Pharmaceuticals Upper Circuit Today: Price, Data and Peers

Univest, 14 Oct

Asston Pharmaceuticals Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Prakruti R Pali raises Asston Pharma stake to 9.03% via open market buy

scanx.trade, 31 Aug

Asston Pharmaceuticals allots 24.10 lakh equity shares

Business Standard, 07 Sept

ASSTON PHARMACEUTICALS LIMITED Share Price

Upstox, 05 May

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth

MiddlingProfitability · Valuation

WeakRisk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 3 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑