Alembic Pharmaceuticals Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹790.00−₹2.65 (−0.33%)

DalalBaazaar Score

71 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by small-cap size, which brings sharper price swings.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

Alembic Pharmaceuticals Limited, an integrated pharmaceutical company, develops, manufactures, markets, and sells pharmaceutical products in India and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees17,244

Annual revenue₹7,213 Cr

How does it make money?

Turns over ₹7,213 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation. Each of its 17,244 employees supports ₹41.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹41.8 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 12.8% 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?

9 analysts covering the stock expect revenue to grow about 10.5% and earnings to grow about 31.3% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+10.5%

Est. earnings growth+31.3%

Analysts9

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +31% while net margin moved +50% 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+31%

Margin effect+50%

DalalBaazaar Score

71/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.32 — historically steadier than the index
✗ Small Cap: thinner liquidity and sharper drawdowns are normal

Quality vs. Valuation

Company Quality

73/ 100

Good

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

Valuation

77/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

22.4x

3Y Median

31.6x

40 monthly readings · mean 35.6x · range 22.3x–67.8x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 29% below its 3y median of 31.6x. 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 33% below the peer median of 33.3x.

vs. its own history

Cheap

31.6x median over 40 months · -29%

vs. sector peers

Cheap

33.3x median of 4 peers · -33%

vs. generic bands

Fair

15x–35x

EV/EBITDA

14.3x

PEG

0.88

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 12.5% to 16.3% over 3 years.
Return on equity is rising
ROE has improved from 7.8% to 11.9%.
Return on capital is rising
ROCE has improved from 8.9% to 12.8%.
Very low debt
Debt/Equity of 0.25x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 98% over 3 years, from ₹722 Cr to ₹1,430 Cr.
🟡Inventory building faster than salesFinancial
Inventory up 70% against revenue up 31% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 12.5% to 16.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 29% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 33% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹288 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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?

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 14%✓ 16.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 7% a year✓ 9.5% CAGR
Latest reported year was 25.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹288 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 10%✓ 12.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

5 good · 6 neutral · 0 weak

Market Cap

₹15,528 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

22.4x

Fair

Fairly valued against the generic band

P/B Ratio

2.74x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹35.27

Profitable

Profitable on a per-share basis

ROE

11.9%

Moderate

Moderate capital efficiency

ROCE

12.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.25x

Low

Conservative leverage

Revenue Growth (YoY)

25.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

12.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.52%

Modest

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

Free Cash Flow

₹288 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

16.1x

Improving

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

Operating Margin

10.9%

Average

Average margins

Net Margin

8.9%

Average

Average bottom-line conversion

Current Ratio

1.75

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.32

Defensive

Steadier than the market

52W Range Position

43%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

825.6 / 823.6

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

24.4

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹5,500 Cr	₹6,112 Cr	₹6,540 Cr	₹7,213 Cr	+9.5%
EBITDA	₹689 Cr	₹955 Cr	₹1,052 Cr	₹1,174 Cr	+19.4%
EBITDA Margin	12.5%	15.6%	16.1%	16.3%	—
PAT (Net Profit)	₹342 Cr	₹616 Cr	₹583 Cr	₹675 Cr	+25.4%
EPS	₹17.4	₹31.33	₹29.68	₹34.33	+25.4%
ROE	7.8%	12.8%	11.2%	11.9%	—
ROCE	8.9%	13.8%	14.7%	12.8%	—
Total Debt	₹722 Cr	₹513 Cr	₹1,258 Cr	₹1,430 Cr	+25.6%
Free Cash Flow	₹281 Cr	₹476 Cr	-₹476 Cr	₹288 Cr	+0.9%

🟢 Revenue has grown at 9.5% a year over 3 years.

🟢 EBITDA has grown at 19.4% a year over 3 years.

🟢 EBITDA Margin has risen from 12.5% to 16.3% over 3 years (+3.8 pts).

🟢 PAT (Net Profit) has grown at 25.4% a year over 3 years.

🟢 EPS has grown at 25.4% a year over 3 years.

🟢 ROE has risen from 7.8% to 11.9% over 3 years (+4.1 pts).

🟢 ROCE has risen from 8.9% to 12.8% over 3 years (+3.9 pts).

🔴 Total Debt has grown at 25.6% a year over 3 years.

🟡 Free Cash Flow has been broadly flat over 3 years (0.9% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹8,763 Cr

Total Liabilities

₹3,094 Cr

Cash & Equivalents

₹196 Cr

Operating Cash Flow

₹783 Cr

Capex

-₹495 Cr

Shareholding (proxy)

Institutional Holding

16.8%

Insider Holding

70.7%

Corporate Actions

Dividend Rate

₹12

Ex-Dividend Date

29 Jul 2026

Analyst Consensus

Recommendations

6 Buy · 3 Hold · 1 Sell

Target Price (Mean)

₹961.8

+21.7% vs CMP

Target Range

₹835 – ₹1,132

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

1 positive3 mixed2 general

Alembic Pharmaceuticals secures USFDA approval for otic suspension

scanx.trade, 17 Oct

Alembic Pharmaceuticals Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Alembic Pharma shares plunge 9% on soft Q4 results, weak margins drag

Business Standard, 18 MayPrice 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.

Alembic Pharma shares gain after Canada venture investment

Moneycontrol.com, 08 JunPrice 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.

Read This Before Considering Alembic Pharmaceuticals Limited (NSE:APLLTD) For Its Upcoming ₹12.00 Dividend

Simply Wall Street, 25 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Drugmaker Alembic Pharma posts earnings dip on Indian labour code changes

Reuters, 05 FebResults

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

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

StrongBusiness Quality · Financial Health · Growth · Valuation

MiddlingProfitability · Risk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑