Aarti Drugs Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Aarti Drugs Ltd trades at ₹423, in a downtrend and 33 weeks into that stage. That is +6.0% against its own 200-day average. It sits at 47% of a 52-week range of ₹331 to ₹525. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 4 straight weeks.

Today the stock is in a downtrend — week 33 of stage 4, confirmed. At ₹423 it trades +6.0% versus its 200-day average and sits at 47% of its 52-week range (₹331–₹525).

Against the market, two honest reads. Cumulative: over the last 10.4 years the stock moved +247% while the NIFTY 500 moved +276% — behind the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 4 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Aarti Drugs Ltd trades at 20.0× P/E, mid-range by its own standards (47th percentile). Its long-run median P/E is 20.6×, measured across 10.4 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 20.0× is mid-range by its own standards (47th percentile), against a long-run median of 20.6× measured over 10.4 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved +16.0% against a −13.6% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 5y, of the −8.7%/yr price move, ~−4.2%/yr came from earnings growth and ~−4.5 pp from the multiple (compressing); over 10y, of the +12.3%/yr price move, ~+11.1%/yr came from earnings growth and ~+1.2 pp from the multiple (expanding). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is unremarkable against its own past, so the story rests on the earnings line underneath it, not the multiple.

Stage: Mixed Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Aarti Drugs Ltd reads as mixed on its fundamental arc. Mixed — no clean majority across the growth curves, ROCE holding at 13.4% — the per-curve reads carry the story. The read is built from 12 quarters across 4 curves, on full evidence.

Why it matters: when the curves disagree, the per-curve reads above matter more than any single verdict.

4-Factor Sector Score

49.3/100 — rank 7 of 14 in Pharma - API · 94% evidence confidence

Aarti Drugs Ltd scores 49.3 out of 100 against the 14 companies it is compared with in Pharma - API, ranking 7. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 18.2 + 10.6 + 13.3 + 7.2 = 49.3. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Aarti Drugs Ltd reported ₹703 Cr of revenue in the Jun 26 quarter, +19.0% year on year. That is the 6th straight quarter of year-on-year growth. Over 10 years it has compounded at 8.4% a year. The last full year, FY26, came in at ₹2,565 Cr. The last four reported quarters add to ₹2,678 Cr.

FY26 revenue came in at ₹2,565 Cr (+7.5% on the year), capping 10 years at 8.4% compound. The latest quarter (Jun 26) printed ₹703 Cr, +19.0% year on year — the 6th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +10.7% growth against the decade's 8.4% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +10.5% over the last 4 quarters against +5.1%/yr over the last 8 — accelerating; TTM profit +1.1% vs +10.3%/yr — rolling over.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Aarti Drugs Ltd's operating margin is 14.0% in the Jun 26 quarter, +1.0 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 11.0% to 20.0%. The current quarter sits inside that band.

The latest quarter's operating margin is 14.0%, +1.0 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 11.0%–20.0%.

Why the margin moved: operating margin went +1.4 pp year on year while gross margin went +2.4 pp — the gain came mostly from the gross line: input costs and pricing.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Aarti Drugs Ltd earned ₹50.0 Cr of net profit in the Jun 26 quarter, −7.4% year on year. Full-year FY26 profit was ₹195 Cr. The 10-year compound rate is 10.9%. That is 7.1% of the quarter's revenue. The same quarter a year earlier earned ₹54.0 Cr.

Jun 26 profit was ₹50.0 Cr, −7.4% year on year. On the full year, FY26 printed ₹195 Cr (+16.1%), and the 10-year compound rate is 10.9%.

🚨 Why profit moved: revenue contributed +19.0% and the margin +1.0 pp — the quarter was revenue-led, with the margin roughly flat.

Pace comparison, last four quarters: profit +4.8% vs revenue +10.7%. Profit is growing slower than sales — costs are eating the growth before it reaches the bottom line.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 160% of Aarti Drugs Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹254 Cr of operating cash against ₹195 Cr of profit. After ₹171 Cr of capital spending, ₹83.0 Cr was left as free cash.

FY26: operating cash of ₹254 Cr against reported profit of ₹195 Cr, leaving free cash of ₹83.0 Cr after ₹171 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 160% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 160%: the cash cycle held roughly steady between FY21 and FY26 — so conversion tracks profitability rather than the cycle.

Router verdict: the bigger cash user is investment — capital spending ran 3.4× depreciation over three years, so the next section's job is to check what that build-out is buying.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Aarti Drugs Ltd's cash conversion cycle runs 121 days in FY26, up from 118 days in FY21. Capital spending ran ₹588 Cr over the last 3 years. At FY26 sales of ₹2,565 Cr each day of that cycle holds about ₹7.0 Cr, so roughly ₹850 Cr sits inside the business at any moment.

FY26: debtors at 118 days, inventory at 111 days — roughly 3.7 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of 121 days, looser than FY21's 118.

The full loop: cash goes out to suppliers and production on day 0; stock waits 111 days to sell; customers pay about 118 days after that; and suppliers themselves are paid at 108 days — netting out to the 121-day cycle.

In money terms: at FY26 sales of ₹2,565 Cr, each day of the cycle holds about ₹7.0 Cr — so the 121-day loop keeps roughly ₹850 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹588 Cr over the last 3 fiscal years against ₹174 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹214 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the cash is going into capacity, not disappearing into the cycle — the question becomes whether the new capacity earns.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Aarti Drugs Ltd earns a ROCE of 12% in FY26. Return on invested capital clears the cost of that capital by −1.5 percentage points, so growth here is not yet paying for the capital it uses. The wiring behind it is 7.6% net margin on 0.91× asset turns.

FY26 ROCE is 12%.

🚨 Why the return is what it is — the wiring (FY26): 7.6% net margin × 0.91× asset turns × 1.82× balance-sheet leverage ≈ 12.6% on equity. Margin does its share; leverage is a meaningful part of the equation.

The capstone test — ROIC − WACC: 10.5% − 12.0% = a −1.5 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. Negative — growth at these returns destroys value until the returns recover.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.

Aarti Drugs Ltd carries total debt of ₹577 Cr against shareholder equity of ₹1,549 Cr as of Mar 26, a debt-to-equity of 0.37. On the annual view that ratio went from 0.52 in FY22 to 0.37 in FY26. Read the returns elsewhere on this page with that leverage in mind.

Mar 26: total debt of ₹577 Cr against shareholder equity of ₹1,549 Cr — a debt-to-equity of 0.37. On the annual view, debt-to-equity went from 0.52 (FY22) to 0.37 (FY26). Read the returns on this page with that leverage in mind.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Domestic institutions added 2.9 points of Aarti Drugs Ltd over 8 quarters, the biggest move on the register. That takes domestic institutions to 10.3% of the company. Foreign institutions moved −1.4 points over the same window, to 1.5%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Domestic institutions: +2.9 points over 8 quarters to 10.3%; Foreign institutions: −1.4 points over 8 quarters to 1.5%; Promoters: −1.2 points over 8 quarters to 54.4%.

Why the register moved: domestic institutions drove it (+2.9 points), absorbed on the other side by foreign institutions (−1.4 points) — steady accumulation by institutions reading the same numbers this page reads.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Aarti Drugs Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

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