Check Before You Invest : Aarti Pharmalabs Ltd

Q: Which industry/sub-sector does Aarti Pharmalabs Ltd belong to?

Aarti Pharmalabs Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.

Q: Is Aarti Pharmalabs Ltd a good quality company?

Aarti Pharmalabs 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: Is Aarti Pharmalabs Ltd undervalued or overvalued?

Aarti Pharmalabs 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. Price to Earnings, Current: 29.69, Historic Median: 27.59. Price to Book, Current: 3.27, Historic Median: 3.32. Price to Sales, Current: 3.65, Historic Median: 3.63. EV to EBITDA, Current: 16.59, Historic Median: 16.13

Q: Is Aarti Pharmalabs Ltd a good buy now?

Aarti Pharmalabs 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

Q: Revenue growth of Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd revenue growth is 17.9% for FY-2025, which is below its 3-year CAGR of 23.47%, indicating slower growth.

Q: Gross Profit margin of Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd Gross profit margin which is the profit after deduction of direct costs, is 23.5% for FY-2025, which is in line with its 3-year median of 22.7%, indicating stable margins.

Q: Operating Profit Margin of Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 24.08% for FY-2025, which is in line with its 3-year median of 23.04% indicating stable margins.

Q: Net Profit Margin of Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd Net Profit Margin is 14.53% for FY-2025, is above its 3-year median of 13.36%, indicating increasing margins. Profitability Metrics. Gross Profit Margin (%), Current: 23.5, Historic Median: 22.7. Operating Profit Margin (%), Current: 24.08, Historic Median: 23.04. Net Profit Margin (%), Current: 14.53, Historic Median: 13.36

Q: Return on Asset of Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd Return on Asset is 10.25%, which is above its 3-year historical median of 9.39%, indicating improved asset utilization efficiency.

Q: Return on capital employed (ROCE) of Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd Return on capital employed is 17.61% for FY-2025, which is above its 3-year historical median of 16.55%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

Check Before You Invest : Aarti Pharmalabs Ltd

Snapshot

Q.1 Which industry/sub-sector does Aarti Pharmalabs Ltd belong to?

Aarti Pharmalabs Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.

Q.2 Is Aarti Pharmalabs Ltd a good quality company?

Aarti Pharmalabs 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 Aarti Pharmalabs Ltd undervalued or overvalued?

Aarti Pharmalabs 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	29.69	27.59
Price to Book	3.27	3.32
Price to Sales	3.65	3.63
EV to EBITDA	16.59	16.13

Q.4 Is Aarti Pharmalabs Ltd a good buy now?

Aarti Pharmalabs 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 Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd revenue growth is 17.9% for FY-2025, which is below its 3-year CAGR of 23.47%, indicating slower growth.

Q.2 Gross Profit margin of Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd Gross profit margin which is the profit after deduction of direct costs, is 23.5% for FY-2025, which is in line with its 3-year median of 22.7%, indicating stable margins.

Q.3 Operating Profit Margin of Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 24.08% for FY-2025, which is in line with its 3-year median of 23.04% indicating stable margins.

Q.4 Net Profit Margin of Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd Net Profit Margin is 14.53% for FY-2025, is above its 3-year median of 13.36%, indicating increasing margins.

	Current Level	3-year Historic Median
Gross Profit Margin (%)	23.5	22.7
Operating Profit Margin (%)	24.08	23.04
Net Profit Margin (%)	14.53	13.36

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd Return on Asset is 10.25%, which is above its 3-year historical median of 9.39%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd Return on capital employed is 17.61% for FY-2025, which is above its 3-year historical median of 16.55%. 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 Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd Return on equity is 14.86% for FY-2025, which is above its 3-year historical median of 13.11%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd Cash conversion cycle is 150 days, in line with its 3-year historical median of 150 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)	0.71	0.71
ROE (%)	14.86	13.11
ROCE (%)	17.61	16.55
Cash Conversion Cycle	150 days	150 days

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

Q.9 Debt to Equity ratio of Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd Debt-to-Equity ratio is 0.21, 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 Aarti Pharmalabs Ltd?

Aarti Pharmalabs Ltd Debt to cash flow from operations is 1.16, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Aarti Pharmalabs Ltd?

Q.1 Promoter shareholding and pledge status of Aarti Pharmalabs Ltd?

Promoters hold 43.08% of the Aarti Pharmalabs Ltd, with 11.03% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Aarti Pharmalabs Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Aarti Pharmalabs Ltd vs industry peers?

Aarti Pharmalabs Ltd revenue CAGR is 23.47%, compared to the industry median CAGR of 6.81%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	3-year Industry Median
Revenue Growth (%)	17.9	6.8
Gross Profit Growth (%)	21.7	12.6
Operating Profit Growth (%)	23.4	9.5
Net Profit Growth (%)	27.9	8.6

Operating Efficiency

	Current Level	3-year Industry Median
Asset Turnover (x)	0.71	0.75
ROE (%)	14.86	9.05
ROCE (%)	17.61	11.33
Cash Conversion Cycle (days)	150.36	83

Valuation & price assessment

Q.1 Stock return of Aarti Pharmalabs Ltd over the last decade?

Over the last 3 year(s), the stock has delivered a CAGR of 28.06% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	-	-	28.1%	-17.9%

Q.2 Valuation ratios of Aarti Pharmalabs Ltd vs historical?

The current P/E ratio of 29.69 is higher than its historical median of 27.59, 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	29.69	27.59	33.73
Price to Book	3.27	3.32	3.09
Price to Sales	3.65	3.63	3.38
EV to EBITDA	16.59	16.13	16.04

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Check Before You Invest : Aarti Pharmalabs Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

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Check trending companies

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