SMS Pharmaceuticals 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.

SMS Pharmaceuticals Ltd trades at ₹475, in a confirmed uptrend and 54 weeks into that stage. That is +28.9% against its own 200-day average. It sits at 100% of a 52-week range of ₹282 to ₹475. 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 confirmed uptrend — week 54 of stage 2, confirmed. At ₹475 it trades +28.9% versus its 200-day average and sits at 100% of its 52-week range (₹282–₹475).

Against the market, two honest reads. Cumulative: over the last 10.6 years the stock moved +605% while the NIFTY 500 moved +268% — ahead of 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.

Story check

SMS Pharmaceuticals Ltd's story is not scored yet against the markers our research file set on 17 May 2026. Where it sits in its own cycle: FULLY_EXPANDED. Still open: PE at 41x vs 21x median (90th percentile); any quarterly miss, capex delay, or margin plateau triggers de-rating; 41x→25x alone implies 40% downside at flat earnings.

Our read, 17 May 2026. Margin-recovery story already priced at 90th-percentile PE — wait for de-rating before entry; operational proof points are real but the multiple leaves no margin of safety.

From the numbers. PE at 41x is the 90th percentile of 10-year range vs 21x median. The stock re-rated from 11x (Mar-22) through 62x peak (Jun-23) and has since compressed to 41x — still expensive relative to history. ROCE at 12.5% and…

From the price. Price stage 2, week 54 — above its 200-day line, relative strength rising.

From the research. Margin-recovery story already priced at 90th-percentile PE — wait for de-rating before entry; operational proof points are real but the multiple leaves no margin of safety.

🚨 Where they disagree. PE at 41x is the 90th percentile of 10-year range vs 21x median. The stock re-rated from 11x (Mar-22) through 62x peak (Jun-23) and has since compressed to 41x — still expensive relative to history. ROCE at 12.5% and ROE at 11.8% do not justify a 41x PE on business quality grounds; the multiple is pricing in execution of the backward integration thesis and continued 20%+ growth. FIIs hold only 0.28% — institutional appetite is muted, not a strong positive signal. Promoters are the buyers: 64.3%→68.1% over 8 quarters.

What is proven. Margin-recovery story already priced at 90th-percentile PE — wait for de-rating before entry; operational proof points are real but the multiple leaves no margin of safety.

What is not proven yet. PE at 41x vs 21x median (90th percentile); any quarterly miss, capex delay, or margin plateau triggers de-rating; 41x→25x alone implies 40% downside at flat earnings.

The test written in advance. Valuation at 90th Percentile — De-rating Risk — Valuation at 90th Percentile — De-rating Risk Quarterly PAT trajectory; Dec-25 already showed QoQ revenue -13.2% (242→210 Cr) — demand lumpiness is a yellow flag by the next result.

The test written in advance. Capex Revenue Timeline Slippage (FY27→FY28) — Capex Revenue Timeline Slippage (FY27→FY28) Q4 FY26 concall (Mar-26) capex progress update; revenue start date for new capacity by the next result.

The test written in advance. Ibuprofen Production Execution Shortfall — Ibuprofen Production Execution Shortfall Q3 FY26 (Dec-25) monthly production data; management commentary on FY26 Ibuprofen volume achievement by the next result.

What the company does. OPM expanded from 16% (Mar-25) to 21% (Dec-25) across four consecutive quarters as backward integration into API intermediates reduced input costs; TTM PAT Rs 88 Cr (+35% YoY) confirms structural improvement. PE sits at 90th percentile of 10-year range (41x vs 21x median), FULLY_EXPANDED — the operational story is real but already priced with execution perfection required. Four Tijori-confirmed management inconsistencies (capex timeline, ibuprofen volumes, margin timing, anti-diabetic narrative) limit the trust premium; deploy only on a de-rating to 25-30x PE range.

Lever 1 · Operating leverage — BUILDING. Backward integration into API intermediates drove 500 bps OPM expansion (16%→21%) over four consecutive quarters; 30% of Q2 FY26 gross margin improvement attributed to this lever. What proves it keeps working: Operating Leverage Inflection (Backward Integration). It stops working if Quarterly PAT trajectory; Dec-25 already showed QoQ revenue -13.2% (242→210 Cr) — demand lumpiness is a yellow flag.

Lever 15 · Market-share gains — BUILDING. Global customers actively seeking non-Chinese API sources; 30-year track record positions SMS as a credible alternative in anti-inflammatory, ARV, and anti-diabetic segments. What proves it keeps working: China+1 Market Share Gains. It stops working if Quarterly PAT trajectory; Dec-25 already showed QoQ revenue -13.2% (242→210 Cr) — demand lumpiness is a yellow flag.

Lever 2 · Value-added mix — BUILDING. Ibuprofen production scaling from 2,200 MT (FY25) to 5,000 MT (FY26 target) with EDQM certification for Europe; regulated market share target 60-70% in FY26. What proves it keeps working: Value-Added Product Mix Shift (Ibuprofen + Regulated Markets). It stops working if Quarterly PAT trajectory; Dec-25 already showed QoQ revenue -13.2% (242→210 Cr) — demand lumpiness is a yellow flag.

Lever 5 · Regulatory approval — BUILDING. 100+ scientists today with plan to double; 120+ DMFs filed with 30 more targeted in 24-30 months; peptide CRO subsidiary incorporated with commercial operations targeted FY29. What proves it keeps working: R&D Pipeline Expansion (DMFs + Peptides). It stops working if Quarterly PAT trajectory; Dec-25 already showed QoQ revenue -13.2% (242→210 Cr) — demand lumpiness is a yellow flag.

Sources: our stock research file (17 May 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

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

SMS Pharmaceuticals Ltd reported ₹207 Cr of revenue in the Jun 26 quarter, +5.6% year on year. Over 10 years it has compounded at 3.8% a year. The last full year, FY26, came in at ₹887 Cr. The last four reported quarters add to ₹897 Cr.

Why this happened. The structural tailwind is real: major pharma buyers are diversifying away from Chinese API suppliers after supply chain disruptions. SMS's backward integration into intermediates (reducing China dependency) compounds this advantage. Management notes 'global customers are actively seeking dependable non-Chinese sources'. The moat is narrow — API markets remain pricing-competitive — but the tailwind supports above-market volume growth. ARV segment has 'good visibility for next 3 quarters driven by customer tender wins'. The risk: anti-diabetic market share is conceding ground to new entrants.

FY26 revenue came in at ₹887 Cr (+13.3% on the year), capping 10 years at 3.8% compound. The latest quarter (Jun 26) printed ₹207 Cr, +5.6% year on year.

Pace check: the last four quarters averaged +11.5% growth against the decade's 3.8% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +10.2% over the last 4 quarters against +10.2%/yr over the last 8 — stabilising; TTM profit +41.7% vs +35.0%/yr — accelerating.

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.

SMS Pharmaceuticals Ltd's operating margin is 20.0% in the Jun 26 quarter, +0.0 percentage points against the same quarter a year ago. Across 14 fiscal years the operating margin has ranged 10.0% to 25.0%. The current quarter sits inside that band.

Why this happened. This is the central earnings driver. SMS invested Rs 150 Cr over 12-18 months to build in-house manufacturing capabilities for critical intermediates across its API portfolio. The benefits started showing in Jun-25 quarter (OPM 20% vs 16% in Mar-25). By Sep-25 the full quarterly contribution was visible: gross margins hit 32%, up 300 bps YoY. Management confirms 30% of gross margin improvement attributed to backward integration in Q2 FY26. The caveat: the impact delivery was 1-2 quarters later than the Jun-25 guidance implied. The benefits are still 'rolling out' — management expects further improvement as plants optimize. Additional margin expansion room confirmed by management for coming…

The latest quarter's operating margin is 20.0%, +0.0 pp against the same quarter a year ago. Across 14 fiscal years the operating margin has ranged 10.0%–25.0%.

🚨 Why the margin moved: operating margin went −0.3 pp year on year while gross margin went +2.2 pp — the loss 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.

SMS Pharmaceuticals Ltd earned ₹21.0 Cr of net profit in the Jun 26 quarter, +5.0% year on year. It is the 11th consecutive quarter of growth. Full-year FY26 profit was ₹102 Cr. The 10-year compound rate is 9.5%. That is 10.1% of the quarter's revenue. The same quarter a year earlier earned ₹20.0 Cr.

Jun 26 profit was ₹21.0 Cr, +5.0% year on year — the 11th consecutive quarter of growth. On the full year, FY26 printed ₹102 Cr (+47.8%), and the 10-year compound rate is 9.5%.

Why profit moved: revenue contributed +5.6% and the margin +0.0 pp — the quarter was revenue-led, with the margin roughly flat.

Pace comparison, last four quarters: profit +44.1% vs revenue +11.5%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to 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 86% of SMS Pharmaceuticals Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹59.0 Cr of operating cash against ₹102 Cr of profit. After ₹128 Cr of capital spending, ₹−69.0 Cr was left as free cash.

FY26: operating cash of ₹59.0 Cr against reported profit of ₹102 Cr, leaving free cash of ₹−69.0 Cr after ₹128 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 86% 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 86%: the cash cycle stretched 114 days between FY21 and FY26 — more of each rupee of profit waits inside the cycle before arriving.

Router verdict: the bigger cash user is investment — capital spending ran 3.0× 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).

SMS Pharmaceuticals Ltd's cash conversion cycle runs 260 days in FY26, up from 146 days in FY21. Capital spending ran ₹317 Cr over the last 3 years. At FY26 sales of ₹887 Cr each day of that cycle holds about ₹2.4 Cr, so roughly ₹632 Cr sits inside the business at any moment.

FY26: debtors at 89 days, inventory at 260 days — roughly 8.6 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of 260 days, looser than FY21's 146.

The full loop: cash goes out to suppliers and production on day 0; stock waits 260 days to sell; customers pay about 89 days after that; and suppliers themselves are paid at 89 days — netting out to the 260-day cycle.

In money terms: at FY26 sales of ₹887 Cr, each day of the cycle holds about ₹2.4 Cr — so the 260-day loop keeps roughly ₹632 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹317 Cr over the last 3 fiscal years against ₹106 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹122 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.

SMS Pharmaceuticals Ltd earns a ROCE of 13% in FY26. That is up from a trough of 4% in FY23. Return on invested capital clears the cost of that capital by −2.7 percentage points, so growth here is not yet paying for the capital it uses. The wiring behind it is 11.5% net margin on 0.65× asset turns.

FY26 ROCE is 13%, recovered from a FY23 trough of 4% — the full ladder below shows the fall and the climb, undoctored.

🚨 Why the return is what it is — the wiring (FY26): 11.5% net margin × 0.65× asset turns × 1.74× balance-sheet leverage ≈ 13.0% on equity. Margin does its share; leverage is a meaningful part of the equation.

The capstone test — ROIC − WACC: 9.3% − 12.0% = a −2.7 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.

SMS Pharmaceuticals Ltd carries total debt of ₹365 Cr against shareholder equity of ₹786 Cr as of Mar 26, a debt-to-equity of 0.46. On the annual view that ratio went from 0.56 in FY22 to 0.46 in FY26. Read the returns elsewhere on this page with that leverage in mind.

Mar 26: total debt of ₹365 Cr against shareholder equity of ₹786 Cr — a debt-to-equity of 0.46. On the annual view, debt-to-equity went from 0.56 (FY22) to 0.46 (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.

Promoters added 3.4 points of SMS Pharmaceuticals Ltd over 8 quarters, the biggest move on the register. That takes promoters to 68.1% of the company. Domestic institutions moved +0.7 points over the same window, to 2.8%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Promoters: +3.4 points over 8 quarters to 68.1%; Domestic institutions: +0.7 points over 8 quarters to 2.8%; Foreign institutions: +0.5 points over 8 quarters to 0.7%.

Why the register moved: promoters drove it (+3.4 points), alongside domestic institutions (+0.7 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.

SMS Pharmaceuticals 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.

Why this happened. R&D expansion is medium-term — commercial impact is FY29+ for peptides. But the DMF filing momentum (30 additional filings in 24-30 months) broadens the product pipeline systematically. The Chemo JV has delivered first-mover positioning in Europe for anti-diabetics. New products in anti-epileptic and anti-erectile dysfunction segments showing traction. The peptide initiative is early-stage R&D investment — classified as BUILDING rather than ACTIVE as revenue impact is multi-year.

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

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.

SMS Pharmaceuticals Ltd trades at 42.8× P/E, at the pricey end of its own range (93rd percentile). Its long-run median P/E is 24.0×, measured across 10.6 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 42.8× is at the pricey end of its own range (93rd percentile), against a long-run median of 24.0× measured over 10.6 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 +39.6% against a +88.7% price move — the price outran earnings, pushing the multiple UP its own range.

The price move, decomposed: over 5y, of the +25.6%/yr price move, ~+3.2%/yr came from earnings growth and ~+22.4 pp from the multiple (expanding); over 10y, of the +18.4%/yr price move, ~+8.5%/yr came from earnings growth and ~+9.9 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.

What the price assumes This reading works the multiple backwards. It asks one question: what yearly rate of profit growth is a buyer at the market price already paying for? The number is the growth rate that makes eleven years of profit — six years growing, then five fading — add up to that day's market price, once each year is discounted at 11% a year.

Solved at its 13 June 2026 price, SMS Pharmaceuticals Ltd was paying for profit growth of about 22.0% a year. Profit itself has compounded 9.5% a year over the past 10 years. Today the market pays 42.8× P/E, the 93rd percentile of its own 11-year range.

What the two numbers say together. The multiple is full against its own past, and the growth the price is paying for is far above what this company has actually delivered.

How to hold this number: it is a reading of one day's price, taken on 13 June 2026, not a running figure — every other number on this page, the multiple included, is read off the live quote as of 28 September 2026. A higher price is paying for more growth and a lower price for less, so it moves whenever the price does, and this page does not restate it between measurements.

Stage: Consistent 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).

SMS Pharmaceuticals Ltd reads as consistent on its fundamental arc. Consistent — revenue, profit and EPS growth have stayed positive through the window, with ROCE at 15.1% and holding. The read is built from 12 quarters across 4 curves, on full evidence.

Why it matters: steady curves with healthy returns are the compounding setup — the risk is the price, not the business.

4-Factor Sector Score

No sector-relative score — SMS Pharmaceuticals Ltd is score temporarily unavailable — [mlaSectorData] ambiguous sector slug "pharma-api": Pharma - API, Pharma API for undefined.

The score is a rank WITHIN a peer set: every metric is scored by percentile against the other members. Without the peer set there is no score to state, so none is invented here.

Said versus delivered

What SMS Pharmaceuticals Ltd's management promised, set against what actually arrived — 4 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

Revenue Growth Guidance Cut · 27 May 2026. In both the Jun 2025 and Nov 2025 calls, management strongly guided for 20% revenue growth for the year. However, in the May 2026 call, management abandoned this 20% target after delivering only 13% total growth for FY26, and structurally lowered their forward-looking guidance to 15% for FY27, citing external supply chain uncertainties.

Strategic Pivot Away from Anti-diabetic Segment · 27 May 2026. During the Nov 2025 call, management touted the Anti-diabetic segment as their largest category, noting its steady growth and their ability to consolidate market share despite patent expiries. However, the May 2026 call reveals that management actively pivoted execution away from this exact segment right at the start of Q3 FY26, shifting critical resources to other areas due to deteriorating unit economics they had not fully addressed previously.

🚨 CAPEX Revenue Timeline Delayed · 11 November 2025. Management guided in the June 2025 call that the new INR 250 crore capex project would begin generating revenue in early FY27. However, in the November 2025 call, the revenue timeline for this expanded INR 280 crore capex was pushed out by at least a full year to FY28, with no explanation for the significant delay in expected returns. Earlier call (Jun 2025): “And coming to this year, we are adding INR250 crores approximately...we are anticipating that commercials to start in early FY”. Later call (Nov 2025): “So this will be completed in November 2026, and we are anticipating revenues coming in from FY28.”

🚨 Ibuprofen Volume Target At Risk · 11 November 2025. In the June 2025 call, management set an ambitious target to produce 5,000 tons of Ibuprofen in FY26. However, in the November 2025 call, halfway through the fiscal year, they revealed a current production run-rate of only 350 tons per month, which annualizes to 4,200 tons, putting the full-year target in jeopardy and indicating a significant execution shortfall. Earlier call (Jun 2025): “Any target for ibuprofen volumes this fiscal? ... So we are targeting close to around 5,000 tons this year.” Later call (Nov 2025): “So, 5,000 tons means an average of around 450 tons per month. So right now we are at almost around 350 tons number at this point of time.”

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions