Aarti Pharmalabs 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 Pharmalabs Ltd trades at ₹667, in a downtrend and 35 weeks into that stage. That is −6.7% against its own 200-day average. It sits at 18% of a 52-week range of ₹609 to ₹930. On relative strength it is currently behind the NIFTY 500 on a trailing-13-week view (1 week and counting).

Today the stock is in a downtrend — week 35 of stage 4, confirmed. At ₹667 it trades −6.7% versus its 200-day average and sits at 18% of its 52-week range (₹609–₹930).

Against the market, two honest reads. Cumulative: over the last 3.5 years the stock moved +157% while the NIFTY 500 moved +56% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock is currently behind (1 week and counting; last ahead the week of 2026-07-24) — 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 Pharmalabs Ltd trades at 34.2× P/E, at the pricey end of its own range (95th percentile). Its long-run median P/E is 26.1×, measured across 3.2 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 34.2× is at the pricey end of its own range (95th percentile), against a long-run median of 26.1× measured over 3.2 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 −35.9% against a −22.8% price move — the price outran earnings, pushing the multiple UP its own range.

The price move, decomposed: over 3y, of the +24.2%/yr price move, ~−3.0%/yr came from earnings growth and ~+27.2 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 full against its own past, so the story rests on the earnings line underneath it, not the multiple.

Stage: Deteriorating 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 Pharmalabs Ltd reads as deteriorating on its fundamental arc. Deteriorating — revenue, profit and EPS growth are shrinking (revenue growth −14.0% latest against +14.1% at its 12-quarter best), ROCE slipping at 12.4%. The read is built from 12 quarters across 4 curves, on full evidence.

🚨 Why it matters: falling curves mean every cheap-looking ratio below needs a discount for direction.

4-Factor Sector Score

27.4/100 — rank 13 of 14 in Pharma - API · 90% evidence confidence

Aarti Pharmalabs Ltd scores 27.4 out of 100 against the 14 companies it is compared with in Pharma - API, ranking 13. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 7.3 + 11.3 + 3.3 + 5.5 = 27.4. 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 Pharmalabs Ltd reported ₹583 Cr of revenue in the Mar 26 quarter, +3.4% year on year. The last full year, FY26, came in at ₹1,819 Cr. The last four reported quarters add to ₹1,819 Cr. A multi-year compound rate is not shown because the annual history behind it is too short to compute one honestly.

FY26 revenue came in at ₹1,819 Cr (−14.0% on the year). The latest quarter (Mar 26) printed ₹583 Cr, +3.4% year on year.

Acceleration check: trailing-twelve-month revenue grew −14.0% over the last 4 quarters against −0.9%/yr over the last 8 — rolling over; TTM profit −31.3% vs −7.2%/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 Pharmalabs Ltd's operating margin is 19.0% in the Mar 26 quarter, −7.0 percentage points against the same quarter a year ago. Across 5 fiscal years the operating margin has ranged 17.0% to 22.0%. The current quarter sits inside that band.

The latest quarter's operating margin is 19.0%, −7.0 pp against the same quarter a year ago. Across 5 fiscal years the operating margin has ranged 17.0%–22.0%.

🚨 Why the margin moved: operating margin went −6.4 pp year on year while gross margin went +0.9 pp — the loss came mostly below the gross line: operating leverage, with costs spread over a bigger revenue base.

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

Aarti Pharmalabs Ltd earned ₹61.0 Cr of net profit in the Mar 26 quarter, −30.7% year on year. Full-year FY26 profit was ₹175 Cr. That is 10.5% of the quarter's revenue. The same quarter a year earlier earned ₹88.0 Cr.

Mar 26 profit was ₹61.0 Cr, −30.7% year on year. On the full year, FY26 printed ₹175 Cr (−35.7%).

🚨 Why profit moved: revenue contributed +3.4% and the margin −7.0 pp — the quarter was revenue-led despite a thinner margin.

Pace comparison, last four quarters: profit −31.0% vs revenue −13.9%. 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 122% of Aarti Pharmalabs Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹262 Cr of operating cash against ₹175 Cr of profit. After ₹423 Cr of capital spending, ₹−161 Cr was left as free cash.

FY26: operating cash of ₹262 Cr against reported profit of ₹175 Cr, leaving free cash of ₹−161 Cr after ₹423 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 122% 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 122%: the cash cycle tightened 13 days between FY22 and FY26 — cash that used to wait in the cycle now reaches the bank sooner.

Router verdict: the bigger cash user is investment — capital spending ran 4.0× 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 Pharmalabs Ltd's cash conversion cycle runs 251 days in FY26, down from 264 days in FY22. Capital spending ran ₹1,066 Cr over the last 3 years. At FY26 sales of ₹1,819 Cr each day of that cycle holds about ₹5.0 Cr, so roughly ₹1,251 Cr sits inside the business at any moment.

FY26: debtors at 117 days, inventory at 280 days — roughly 9.2 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of 251 days, tighter than FY22's 264.

The full loop: cash goes out to suppliers and production on day 0; stock waits 280 days to sell; customers pay about 117 days after that; and suppliers themselves are paid at 146 days — netting out to the 251-day cycle.

In money terms: at FY26 sales of ₹1,819 Cr, each day of the cycle holds about ₹5.0 Cr — so the 251-day loop keeps roughly ₹1,251 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹1,066 Cr over the last 3 fiscal years against ₹264 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹305 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 Pharmalabs Ltd earns a ROCE of 11% in FY26. Return on invested capital clears the cost of that capital by −4.0 percentage points, so growth here is not yet paying for the capital it uses. The wiring behind it is 9.6% net margin on 0.52× asset turns.

FY26 ROCE is 11%.

🚨 Why the return is what it is — the wiring (FY26): 9.6% net margin × 0.52× asset turns × 1.64× balance-sheet leverage ≈ 8.2% on equity. Margin does its share; leverage is a meaningful part of the equation.

The capstone test — ROIC − WACC: 8.0% − 12.0% = a −4.0 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 Pharmalabs Ltd carries total debt of ₹794 Cr against shareholder equity of ₹2,125 Cr as of Mar 26, a debt-to-equity of 0.37. On the annual view that ratio went from 0.25 in FY22 to 0.37 in FY26. Read the returns elsewhere on this page with that leverage in mind.

Mar 26: total debt of ₹794 Cr against shareholder equity of ₹2,125 Cr — a debt-to-equity of 0.37. On the annual view, debt-to-equity went from 0.25 (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 cut 4.3 points of Aarti Pharmalabs Ltd over 8 quarters, the biggest move on the register. That takes domestic institutions to 7.2% of the company. Promoters moved −3.6 points over the same window, to 42.9%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Domestic institutions: −4.3 points over 8 quarters to 7.2%; Promoters: −3.6 points over 8 quarters to 42.9%; Foreign institutions: +1.1 points over 8 quarters to 8.2%.

🚨 Why the register moved: domestic institutions drove it (−4.3 points), alongside promoters (−3.6 points) — distribution into the market’s bid.

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 Pharmalabs 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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