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Check Before You Invest : Medico Remedies Ltd

BSE: 540937 NSE: MEDICO ISIN: INE630Y01024
  |   Sector:  Healthcare   |   Industry:  Pharmaceuticals & Drugs

Snapshot

Q.1 Which industry/sub-sector does Medico Remedies Ltd belong to?
Medico Remedies Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.
Q.2 Is Medico Remedies Ltd a good quality company?
Medico Remedies Ltd is a average quality company, based on a somewhat consistent 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 Medico Remedies Ltd undervalued or overvalued?
Medico Remedies 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 24.17 52.05
Price to Book 4.2 6.73
Price to Sales 1.54 2.65
EV to EBITDA 14.54 27.23
Q.4 Is Medico Remedies Ltd a good buy now?
Medico Remedies Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. 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 Medico Remedies Ltd?
Medico Remedies Ltd revenue growth is 4.2% for FY-2025, which is below its 5-year CAGR of 11.23%, indicating slower growth.

Q.2 Gross Profit margin of Medico Remedies Ltd?
Medico Remedies Ltd Gross profit margin which is the profit after deduction of direct costs, is 11% for FY-2025, which is above its 5-year median of 9.1%, indicating increasing margins.

Q.3 Operating Profit Margin of Medico Remedies Ltd?
Medico Remedies Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 9.55% for FY-2025, which is above its 5-year median of 6.75% indicating increasing margins.

Q.4 Net Profit Margin of Medico Remedies Ltd?
Medico Remedies Ltd Net Profit Margin is 6.69% for FY-2025, is above its 5-year median of 5.16%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 11 9.1
Operating Profit Margin (%) 9.55 6.75
Net Profit Margin (%) 6.69 5.16

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Medico Remedies Ltd?
Medico Remedies Ltd Return on Asset is 9.18%, which is above its 5-year historical median of 8.63%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Medico Remedies Ltd?
Medico Remedies Ltd Return on capital employed is 21.65% for FY-2025, which is in line with its 5-year historical median of 21.65%. 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 Medico Remedies Ltd?
Medico Remedies Ltd Return on equity is 17.58% for FY-2025, which is in line with its 5-year historical median of 17.23%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Medico Remedies Ltd?
Medico Remedies Ltd Cash conversion cycle is 95 days, above its 5-year historical median of 56 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) 1.37 1.57
ROE (%) 17.58 17.23
ROCE (%) 21.65 21.65
Cash Conversion Cycle 95 days 56 days

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

Q.9 Debt to Equity ratio of Medico Remedies Ltd?
Medico Remedies 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 Medico Remedies Ltd?
Medico Remedies Ltd Debt to cash flow from operations is 2.83, which is at a moderate level.

Ownership & governance

D: Promoter shareholding and pledge status of Medico Remedies Ltd?

Q.1 Promoter shareholding and pledge status of Medico Remedies Ltd?
Promoters hold 61.38% of the Medico Remedies Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Medico Remedies Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Medico Remedies Ltd vs industry peers?
Medico Remedies Ltd revenue CAGR is 11.23%, compared to the industry median CAGR of 5.34%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 4.2 5.3
Gross Profit Growth (%) 21.4 11.8
Operating Profit Growth (%) 7.7 10.8
Net Profit Growth (%) 25 12.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.37 0.78
ROE (%) 17.58 8.58
ROCE (%) 21.65 10.85
Cash Conversion Cycle (days) 94.81 76

Valuation & price assessment

Q.1 Stock return of Medico Remedies Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 30.77% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 30.8% -21.2% -5.8%
Q.2 Valuation ratios of Medico Remedies Ltd vs historical?
The current P/E ratio of 24.17 is lower than its historical median of 52.05, 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 24.17 52.05 31.09
Price to Book 4.2 6.73 2.85
Price to Sales 1.54 2.65 2.82
EV to EBITDA 14.54 27.23 15.99

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