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Check Before You Invest : Unjha Formulations Ltd

BSE: 531762 NSE: ISIN: INE576D01015
  |   Sector:  Healthcare   |   Industry:  Pharmaceuticals & Drugs

Snapshot

Q.1 Which industry/sub-sector does Unjha Formulations Ltd belong to?
Unjha Formulations Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.
Q.2 Is Unjha Formulations Ltd a good quality company?
Unjha Formulations Ltd is a quality company, based on a 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 Unjha Formulations Ltd undervalued or overvalued?
Unjha Formulations 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 12.29 15.76
Price to Book 1.85 2.26
Price to Sales 0.56 0.51
EV to EBITDA 6.36 10.56
Q.4 Is Unjha Formulations Ltd a good buy now?
Unjha Formulations 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 Unjha Formulations Ltd?
Unjha Formulations Ltd revenue growth is -25.1% for FY-2025, which is below its 5-year CAGR of 5.51%, indicating slower growth.

Q.2 Gross Profit margin of Unjha Formulations Ltd?
Unjha Formulations Ltd Gross profit margin which is the profit after deduction of direct costs, is 4.5% for FY-2025, which is above its 5-year median of 3.1%, indicating increasing margins.

Q.3 Operating Profit Margin of Unjha Formulations Ltd?
Unjha Formulations Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 3.72% for FY-2025, which is above its 5-year median of 3.29% indicating increasing margins.

Q.4 Net Profit Margin of Unjha Formulations Ltd?
Unjha Formulations Ltd Net Profit Margin is 2.94% for FY-2025, is above its 5-year median of 1.78%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 4.5 3.1
Operating Profit Margin (%) 3.72 3.29
Net Profit Margin (%) 2.94 1.78

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Unjha Formulations Ltd?
Unjha Formulations Ltd Return on Asset is 8.59%, which is above its 5-year historical median of 7.23%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Unjha Formulations Ltd?
Unjha Formulations Ltd Return on capital employed is 18.11% for FY-2025, which is below its 5-year historical median of 19.53%. 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 Unjha Formulations Ltd?
Unjha Formulations Ltd Return on equity is 13.88% for FY-2025, which is above its 5-year historical median of 12.22%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Unjha Formulations Ltd?
Unjha Formulations Ltd Cash conversion cycle is 26 days, above its 5-year historical median of 19 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) 2.92 3.83
ROE (%) 13.88 12.22
ROCE (%) 18.11 19.53
Cash Conversion Cycle 26 days 19 days

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

Q.9 Debt to Equity ratio of Unjha Formulations Ltd?
Unjha Formulations Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.14, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Unjha Formulations Ltd?
Unjha Formulations Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Unjha Formulations Ltd?

Q.1 Promoter shareholding and pledge status of Unjha Formulations Ltd?
Promoters hold 36.92% of the Unjha Formulations Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Unjha Formulations Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Unjha Formulations Ltd vs industry peers?
Unjha Formulations Ltd revenue CAGR is 5.51%, compared to the industry median CAGR of 5.35%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -25.1 5.4
Gross Profit Growth (%) 17 14
Operating Profit Growth (%) -13.8 11.5
Net Profit Growth (%) 46.4 12
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 2.92 0.79
ROE (%) 13.88 9.17
ROCE (%) 18.11 11.52
Cash Conversion Cycle (days) 25.64 76

Valuation & price assessment

Q.1 Stock return of Unjha Formulations Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 8.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
8.1% 15.3% 11.4% -14.2%
Q.2 Valuation ratios of Unjha Formulations Ltd vs historical?
The current P/E ratio of 12.29 is lower than its historical median of 15.76, 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 12.29 15.76 31.09
Price to Book 1.85 2.26 2.85
Price to Sales 0.56 0.51 2.82
EV to EBITDA 6.36 10.56 15.99

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