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Check Before You Invest : Emcure Pharmaceuticals Ltd

BSE: 544210 NSE: EMCURE ISIN: INE168P01015
  |   Sector:  Healthcare   |   Industry:  Pharmaceuticals & Drugs

Snapshot

Q.1 Which industry/sub-sector does Emcure Pharmaceuticals Ltd belong to?
Emcure Pharmaceuticals Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.
Q.2 Is Emcure Pharmaceuticals Ltd a good quality company?
Emcure Pharmaceuticals Ltd is a good quality company, based on a consistently good 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 Emcure Pharmaceuticals Ltd undervalued or overvalued?
Emcure Pharmaceuticals Ltd appears Somewhat overvalued, as its key valuation ratios are higher than 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 45.29 -
Price to Book 8.95 -
Price to Sales 6.33 -
EV to EBITDA 25.89 -
Q.4 Is Emcure Pharmaceuticals Ltd a good buy now?
Emcure Pharmaceuticals Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. 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 Emcure Pharmaceuticals Ltd?
Emcure Pharmaceuticals Ltd revenue growth is 25.3% for FY-2025, which is above its 5-year CAGR of 13.02%, indicating faster growth.

Q.2 Gross Profit margin of Emcure Pharmaceuticals Ltd?
Emcure Pharmaceuticals Ltd Gross profit margin which is the profit after deduction of direct costs, is 14.9% for FY-2025, which is in line with its 5-year median of 14.9%, indicating stable margins.

Q.3 Operating Profit Margin of Emcure Pharmaceuticals Ltd?
Emcure Pharmaceuticals Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 14.22% for FY-2025, which is in line with its 5-year median of 14.22% indicating stable margins.

Q.4 Net Profit Margin of Emcure Pharmaceuticals Ltd?
Emcure Pharmaceuticals Ltd Net Profit Margin is 7.24% for FY-2025, is in line with its 5-year median of 7.24%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 14.9 14.9
Operating Profit Margin (%) 14.22 14.22
Net Profit Margin (%) 7.24 7.24

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Emcure Pharmaceuticals Ltd?
Emcure Pharmaceuticals Ltd Return on Asset is 6.23%, which is in line with its 5-year historical median of 6.23%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Emcure Pharmaceuticals Ltd?
Emcure Pharmaceuticals Ltd Return on capital employed is 15.4% for FY-2025, which is in line with its 5-year historical median of 15.4%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

Q.7 Return on Equity (ROE) of Emcure Pharmaceuticals Ltd?
Emcure Pharmaceuticals Ltd Return on equity is 12.86% for FY-2025, which is in line with its 5-year historical median of 12.86%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Emcure Pharmaceuticals Ltd?
Emcure Pharmaceuticals Ltd Cash conversion cycle is 76 days, below its 5-year historical median of 95 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.86 0.75
ROE (%) 12.86 12.86
ROCE (%) 15.4 15.4
Cash Conversion Cycle 76 days 95 days

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

Q.9 Debt to Equity ratio of Emcure Pharmaceuticals Ltd?
Emcure Pharmaceuticals Ltd Debt-to-Equity ratio is 0.22, 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 Emcure Pharmaceuticals Ltd?
Emcure Pharmaceuticals Ltd Debt to cash flow from operations is 1.17, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Emcure Pharmaceuticals Ltd?

Q.1 Promoter shareholding and pledge status of Emcure Pharmaceuticals Ltd?
Promoters hold 77.87% of the Emcure Pharmaceuticals Ltd, with 0.04% of their stake pledged, indicating low pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Emcure Pharmaceuticals Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Emcure Pharmaceuticals Ltd vs industry peers?
Emcure Pharmaceuticals Ltd revenue CAGR is 13.02%, compared to the industry median CAGR of 5.35%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 25.3 5.4
Gross Profit Growth (%) 57.7 14
Operating Profit Growth (%) 41 11.5
Net Profit Growth (%) 96.9 12
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.86 0.79
ROE (%) 12.86 9.17
ROCE (%) 15.4 11.52
Cash Conversion Cycle (days) 76.07 76

Valuation & price assessment

Q.1 Stock return of Emcure Pharmaceuticals Ltd over the last decade?
Over the last 1 year(s), the stock has delivered a CAGR of 46.29% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - 46.3%
Q.2 Valuation ratios of Emcure Pharmaceuticals Ltd vs historical?
The current P/E ratio of 45.29 is higher than its historical median of , indicating that the stock is trading above 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 45.29 - 31.09
Price to Book 8.95 - 2.85
Price to Sales 6.33 - 2.82
EV to EBITDA 25.89 - 15.99

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