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Check Before You Invest : Ambalal Sarabhai Enterprises Ltd

BSE: 500009 NSE: AMBALALSA ISIN: INE432A01017
  |   Sector:  Healthcare   |   Industry:  Pharmaceuticals & Drugs

Snapshot

Q.1 Which industry/sub-sector does Ambalal Sarabhai Enterprises Ltd belong to?
Ambalal Sarabhai Enterprises Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.
Q.2 Is Ambalal Sarabhai Enterprises Ltd a good quality company?
Ambalal Sarabhai Enterprises Ltd is a weak quality company, based on a inconsistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Ambalal Sarabhai Enterprises Ltd undervalued or overvalued?
Ambalal Sarabhai Enterprises Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 22.63 52.82
Price to Book 4.18 5.88
Price to Sales 63.06 68.99
EV to EBITDA 24.49 30.20
Q.4 Is Ambalal Sarabhai Enterprises Ltd a good buy now?
Ambalal Sarabhai Enterprises 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

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Ambalal Sarabhai Enterprises Ltd?
Ambalal Sarabhai Enterprises Ltd revenue growth is -2.5% for FY-2026, which is below its 5-year CAGR of NA%, indicating slower growth.

Q.2 Gross Profit margin of Ambalal Sarabhai Enterprises Ltd?
Ambalal Sarabhai Enterprises Ltd Gross profit margin which is the profit after deduction of direct costs, is 254.7% for FY-2026, which is above its 5-year median of 188.8%, indicating increasing margins.

Q.3 Operating Profit Margin of Ambalal Sarabhai Enterprises Ltd?
Ambalal Sarabhai Enterprises Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -129.87% for FY-2026, which is above its 5-year median of -139.11% indicating increasing margins.

Q.4 Net Profit Margin of Ambalal Sarabhai Enterprises Ltd?
Ambalal Sarabhai Enterprises Ltd Net Profit Margin is 278.7% for FY-2026, is above its 5-year median of 204.04%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 254.7 188.8
Operating Profit Margin (%) -129.87 -139.11
Net Profit Margin (%) 278.7 204.04

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Ambalal Sarabhai Enterprises Ltd?
Ambalal Sarabhai Enterprises Ltd Return on Asset is 13.18%, which is above its 5-year historical median of 5.14%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Ambalal Sarabhai Enterprises Ltd?
Ambalal Sarabhai Enterprises Ltd Return on capital employed is 16.36% for FY-2026, which is above its 5-year historical median of 9.58%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Ambalal Sarabhai Enterprises Ltd?
Ambalal Sarabhai Enterprises Ltd Return on equity is 20.36% for FY-2026, which is above its 5-year historical median of 11.49%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Ambalal Sarabhai Enterprises Ltd?
Ambalal Sarabhai Enterprises Ltd Cash conversion cycle is -621 days, above its 5-year historical median of -904 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.05 0.05
ROE (%) 20.36 11.49
ROCE (%) 16.36 9.58
Cash Conversion Cycle -621 days -904 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Ambalal Sarabhai Enterprises Ltd?
Ambalal Sarabhai Enterprises Ltd Debt-to-Equity ratio is 0.19, which is above the industry average of 0.14, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Ambalal Sarabhai Enterprises Ltd?
Ambalal Sarabhai Enterprises Ltd Debt to cash flow from operations is -42.15, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Ambalal Sarabhai Enterprises Ltd?

Q.1 Promoter shareholding and pledge status of Ambalal Sarabhai Enterprises Ltd?
Promoters hold 31.36% of the Ambalal Sarabhai Enterprises Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Ambalal Sarabhai Enterprises Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Ambalal Sarabhai Enterprises Ltd vs industry peers?
Ambalal Sarabhai Enterprises Ltd revenue CAGR is 0.00%, compared to the industry median CAGR of 5.34%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -2.5 5.3
Gross Profit Growth (%) 25 11.8
Operating Profit Growth (%) 0 10.8
Net Profit Growth (%) 37.5 12.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.05 0.78
ROE (%) 20.36 8.58
ROCE (%) 16.36 10.85
Cash Conversion Cycle (days) -621.09 76

Valuation & price assessment

Q.1 Stock return of Ambalal Sarabhai Enterprises Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 14.8% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
14.8% 2% 5.4% -1.3%
Q.2 Valuation ratios of Ambalal Sarabhai Enterprises Ltd vs historical?
The current P/E ratio of 22.63 is lower than its historical median of 52.82, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 22.63 52.82 31.09
Price to Book 4.18 5.88 2.85
Price to Sales 63.06 68.99 2.82
EV to EBITDA 24.49 30.20 15.99

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