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Check Before You Invest : Speciality Medicines Ltd

BSE: 544738 NSE: ISIN: INE0R0M01014
  |   Sector:  Miscellaneous   |   Industry:  Trading

Snapshot

Q.1 Which industry/sub-sector does Speciality Medicines Ltd belong to?
Speciality Medicines Ltd belongs to the Miscellaneous sector, operating specifically within the Trading segment.
Q.2 Is Speciality Medicines Ltd a good quality company?
Speciality Medicines 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 Speciality Medicines Ltd undervalued or overvalued?
Speciality Medicines Ltd appears 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 3-year
Historic Median
Price to Earnings 33.88 27.66
Price to Book 4.9 4.00
Price to Sales 5.01 4.09
EV to EBITDA 31.48 25.79
Q.4 Is Speciality Medicines Ltd a good buy now?
Speciality Medicines 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 Speciality Medicines Ltd?
Speciality Medicines Ltd revenue growth is 111.7% for FY-2025, which is above its 3-year CAGR of 12.95%, indicating faster growth.

Q.2 Gross Profit margin of Speciality Medicines Ltd?
Speciality Medicines Ltd Gross profit margin which is the profit after deduction of direct costs, is 15.3% for FY-2025, which is in line with its 3-year median of 15.3%, indicating stable margins.

Q.3 Operating Profit Margin of Speciality Medicines Ltd?
Speciality Medicines Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 15.67% for FY-2025, which is in line with its 3-year median of 15.67% indicating stable margins.

Q.4 Net Profit Margin of Speciality Medicines Ltd?
Speciality Medicines Ltd Net Profit Margin is 14.77% for FY-2025, is above its 3-year median of 10.66%, indicating increasing margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 15.3 15.3
Operating Profit Margin (%) 15.67 15.67
Net Profit Margin (%) 14.77 10.66

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Speciality Medicines Ltd?
Speciality Medicines Ltd Return on Asset is 27.5%, which is above its 3-year historical median of 17.77%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Speciality Medicines Ltd?
Speciality Medicines Ltd Return on capital employed is 34.47% for FY-2025, which is below its 3-year historical median of 37.72%. 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 Speciality Medicines Ltd?
Speciality Medicines Ltd Return on equity is 37.85% for FY-2025, which is in line with its 3-year historical median of 37.85%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Speciality Medicines Ltd?
Speciality Medicines Ltd Cash conversion cycle is 132 days, in line with its 3-year historical median of 132 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 3-year
Historic Median
Asset Turnover (x) 1.86 1.86
ROE (%) 37.85 37.85
ROCE (%) 34.47 37.72
Cash Conversion Cycle 132 days 132 days

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

Q.9 Debt to Equity ratio of Speciality Medicines Ltd?
Speciality Medicines Ltd Debt-to-Equity ratio is 0.17, which is above the industry average of 0.03, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Speciality Medicines Ltd?
Speciality Medicines Ltd Debt to cash flow from operations is -0.87, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Speciality Medicines Ltd?

Q.1 Promoter shareholding and pledge status of Speciality Medicines Ltd?
Promoters hold 43.43% of the Speciality Medicines Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Speciality Medicines Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Speciality Medicines Ltd vs industry peers?
Speciality Medicines Ltd revenue CAGR is 12.95%, compared to the industry median CAGR of 4.99%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) 111.7 5
Gross Profit Growth (%) 80 17.6
Operating Profit Growth (%) 80 21
Net Profit Growth (%) 200 19
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) 1.86 0.66
ROE (%) 37.85 2.9
ROCE (%) 34.47 4.31
Cash Conversion Cycle (days) 132.27 49

Valuation & price assessment

Q.1 Stock return of Speciality Medicines Ltd over the last decade?
Over the last - year(s), the stock has delivered a CAGR of N/A% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - -
Q.2 Valuation ratios of Speciality Medicines Ltd vs historical?
The current P/E ratio of 33.88 is higher than its historical median of 27.66, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 3-year historical median and industry numbers?
Valuation Ratios Current 3-year
Historic Median
3-year
Industry Median
Price to Earnings 33.88 27.66 35.02
Price to Book 4.9 4.00 1.68
Price to Sales 5.01 4.09 2.16
EV to EBITDA 31.48 25.79 15.51

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