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INVESTMENT INSIGHTS

Check Before You Invest : Alkem Laboratories Ltd

BSE: 539523 NSE: ALKEM ISIN: INE540L01014
  |   Sector:  Healthcare   |   Industry:  Pharmaceuticals & Drugs

Snapshot

Q.1 Which industry/sub-sector does Alkem Laboratories Ltd belong to?
Alkem Laboratories Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.
Q.2 Is Alkem Laboratories Ltd a good quality company?
Alkem Laboratories Ltd is a good quality company, based on a consistently good 10 year financial track record.
Q.3 Is Alkem Laboratories Ltd undervalued or overvalued?
Alkem Laboratories Ltd appears Overvalued, as its key valuation ratios are above with their past averages.
Q.4 Is Alkem Laboratories Ltd a good buy now?
Alkem Laboratories Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Alkem Laboratories Ltd?
Alkem Laboratories Ltd revenue growth is 10.7% for FY-2025 , which is above its 5 year CAGR of 5.7% , indicating faster growth.
Q.2 Gross Profit margin of Alkem Laboratories Ltd?
Alkem Laboratories Ltd Gross profit margin which is the profit after deduction of direct costs, is 28.7% for FY-2025 , which is above its 5 year median of 23.2% , indicating increasing margins.
Q.3 Operating Profit Margin of Alkem Laboratories Ltd?
Alkem Laboratories Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 24.46% for FY-2025 , which is above its 5 year median of 21.02% indicating increasing margins.
Q.4 Net Profit Margin of Alkem Laboratories Ltd?
Alkem Laboratories Ltd Net Profit Margin is 23.71% for FY-2025 , is above with its 5 year median of 19.59%, indicating increasing margins.
Current Level Historic Median
Gross Profit Margin 28.7 23.2
Operating Profit Margin 24.46 21.02
Net Profit Margin 23.71 19.59
Q.5 Return on Asset of Alkem Laboratories Ltd?
Alkem Laboratories Ltd Return on Asset is 15.53%, which is above its 5 year historical median of 14.05%, indicating improved asset utilization efficiency.
Q.6 Return on Equity (ROE) of Alkem Laboratories Ltd?
Alkem Laboratories Ltd Return on equity is 18.27% for FY-2025 , which is in line with its historical median of 18.27%, indicating the business is making similar use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Alkem Laboratories Ltd?
Alkem Laboratories Ltd Return on capital employed is 19.66% for FY-2025 , which is above its estimated weighted average cost of capital(WACC) 11.25%, indicating value creation.
Q.8 Cash conversion cycle of Alkem Laboratories Ltd?
Alkem Laboratories Ltd Cash conversion cycle is 46 days, below its historical median of 76 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 0.67 0.8
ROE 18.27 18.27
ROCE 19.66 17.96
Cash Conversion Cycle 46 days 76 days
Q.9 Debt to Equity ratio of Alkem Laboratories Ltd?
Alkem Laboratories Ltd Debt-to-Equity ratio is 0.03 , which is lower with the industry average of 0.13 , indicating lower debt levels in the industry.
Q.10 Debt to cash flow from operations of Alkem Laboratories Ltd?
Alkem Laboratories Ltd Debt to cash flow from operations is 0.17 , which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Alkem Laboratories Ltd?
Promoters hold 51.20% of the Alkem Laboratories Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Alkem Laboratories Ltd vs industry peers?
Alkem Laboratories Ltd revenue CAGR is 5.71% , compared to the industry median CAGR of 8.87% , indicating slower growth and losing its market share.
Profit Metrics
Current Level Industry Median
Revenue 8,813.4 8,127.2
Gross Profit 2,529.3 1,337.7
Operating Profit 2,156 1,810
Net Profit 2,090 970
Operating Efficiency
Current Level Industry Median
Asset Turnover 0.67 0.8
ROE 18.27 18.61
ROCE 19.66 17.96
Cash Conversion Cycle (days) 46.34 76

Valuation & price assessment

Q.1 Stock return of Alkem Laboratories Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 15.4% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 15.4% 14.9% 18.8% 12.8%
Q.3 Valuation ratios of Alkem Laboratories Ltd vs historical?
The current P/E is higher that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 30.34 22.99 40.28
Price to Book 4.66 5.08 2.77
Price to Sales 7.04 5.06 2.65
EV to EBITDA 23.31 18.89 15.67

Check more companies

1. Lupin
2. Dr. Reddys Lab
3. Zydus Lifesciences
4. Mankind Pharma
5. Aurobindo Pharma
6. Alkem Laboratories
7. Glenmark Pharma
8. Laurus Labs
9. Biocon
10. Abbott India
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