Aarey Drugs & Pharmaceuticals Ltd. (AAREYDRUGS) AI Stock Analysis

• Market Cap: ₹1.97B
• Dividend Yield: N/A
• Average Volume (3M): 7.61K
• Price to Earnings (P/E): 54.9
• Beta (1Y): 1.01
• Revenue Growth: -17.47%
• EPS Growth: -50.07%
• Country: IN
• Employees: N/A
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.36
• Shares Outstanding: 28,354,303
• 10 Day Avg. Volume: 5,578
• 30 Day Avg. Volume: 7,610
• PEG Ratio: -1.15
• Price to Book (P/B): 0.75
• Price to Sales (P/S): 0.22
• P/FCF Ratio: -23.99
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 48 Neutral
• Price Target: ₹69.00 ▲(1.43% Upside)

The score is held down primarily by weak profitability and cash-flow quality (negative free cash flow and thin margins), reinforced by bearish technicals (below major moving averages and negative MACD). A stable balance sheet helps, but the high P/E further limits the overall score.

Positive Factors

Manageable leverage

A low debt-to-equity ratio of 0.25 indicates conservative financial leverage, giving the company durable flexibility to absorb shocks, fund incremental working capital or targeted capex without stressing interest coverage, supporting long-term resilience and strategic optionality.

Strong equity cushion

An equity ratio near 58% signals a solid asset funding base and lower solvency risk, enabling access to credit on better terms and reducing bankruptcy risk. This structural balance-sheet strength supports steady operations and investment capacity over multi-quarter horizons.

Positive EBITDA base

A positive EBITDA margin, albeit modest, shows the core business generates operating earnings before capex and financing. That recurring operating cash potential provides a foundation to pursue efficiency improvements, product mix shifts or incremental investment to lift margins over time.

Negative Factors

Weak profitability

Very thin EBIT and net margins materially limit retained earnings and the firm’s ability to self-fund growth. Persistently low profitability reduces returns on equity, constrains R&D or commercial spend, and leaves the company vulnerable to cost inflation and pricing pressure long-term.

Poor cash conversion

Negative free cash flow and an OCF-to-net-income ratio of 0.22 indicate earnings are not converting to cash effectively. Structurally weak cash generation forces reliance on external financing for operations or capex, reducing financial flexibility and increasing long-term liquidity risk.

Declining top-line

Significant negative revenue growth (~-17%) erodes scale economics and bargaining power with suppliers/customers. If sustained, shrinking sales impair margin recovery, reduce capacity utilization and make investment in pipelines or commercialization harder, threatening long-term competitiveness.

Aarey Drugs & Pharmaceuticals Ltd. Business Overview & Revenue Model

Company Description

Aarey Drugs & Pharmaceuticals Limited manufactures and sells active pharmaceutical ingredients, bulk drugs, intermediates, and specialty chemicals for various industrial applications in India. The company provides mono methyl and die methyl urea, ortho para nitro anisole, 2 bromomethyl 1,3 dioxalane, uracile and active pharma ingredients, such as metformin HCL, mefenamic acid, and doxophylline. It also offers chemicals and solvents, which include aeromatics chemicals, chemical acids, chlor alkalies, glycols and glycol ethers, fiber intermediates, acetates and esters, and chlorinated solvents, as well as industrial alchols, ketones, amines, oleochemicals, intermediates, olefines, phosphates, fertilizers, monomers, and chemicals. The company's pharmaceutical products are used by pharmaceutical formulation manufacturers and pharmaceutical merchant exporters. It also trades in industrial solvents and chemicals. Aarey Drugs & Pharmaceuticals Limited was incorporated in 1990 and is headquartered in Mumbai, India.

How the Company Makes Money

Aarey Drugs & Pharmaceuticals Ltd. generates revenue through multiple key streams, primarily focusing on the sale of its pharmaceutical products. The company earns income by manufacturing and selling generic drugs, which are often more affordable alternatives to brand-name medications. Additionally, AAREYDRUGS engages in the production of OTC products that provide consumers with accessible health solutions without the need for a prescription. The company also benefits from partnerships with healthcare providers and distributors, enabling it to expand its market reach and effectively distribute its products. Furthermore, AAREYDRUGS may generate revenue through contract manufacturing agreements and collaborations with other pharmaceutical firms, enhancing its earning potential while leveraging its manufacturing capabilities.

Aarey Drugs & Pharmaceuticals Ltd. Financial Statement Overview

Summary

Overall fundamentals are mixed: low and declining profitability (Net Profit Margin 0.85%, EBIT margin 0.65%) and weak cash generation (negative Free Cash Flow; Operating Cash Flow to Net Income 0.22) offset a reasonably stable balance sheet (Debt-to-Equity 0.25; Equity Ratio 58.09%).

Income Statement

Aarey Drugs & Pharmaceuticals Ltd. shows moderate performance with a Gross Profit Margin of 1.93% and a declining Net Profit Margin of 0.85% in 2025. Revenue growth is stagnant, with a slight increase in the current period. While the EBIT margin is low at 0.65%, the EBITDA margin stands at 2.55%, indicating some operational efficiency. Overall, the company faces challenges in maintaining profitability.

Balance Sheet

The balance sheet reveals a moderate Debt-to-Equity Ratio of 0.25, suggesting manageable leverage levels. The Return on Equity is low at 2.91%, indicating limited profitability on equity capital. However, the Equity Ratio of 58.09% provides a strong equity position relative to total assets, suggesting financial stability.

Cash Flow

Cash flow analysis indicates challenges, with negative Free Cash Flow and a substantial decline in Operating Cash Flow. The Operating Cash Flow to Net Income Ratio is 0.22, reflecting weak cash conversion from earnings. However, the Free Cash Flow to Net Income Ratio is negative, signaling potential liquidity issues.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.49B	4.74B	3.95B	4.19B	4.92B	3.48B
Gross Profit	140.90M	91.32M	132.04M	115.07M	195.45M	100.98M
EBITDA	125.64M	120.64M	114.16M	104.50M	140.63M	116.65M
Net Income	41.56M	40.24M	46.84M	37.71M	65.55M	65.14M
Balance Sheet
Total Assets	0.00	2.38B	3.03B	2.91B	2.45B	2.33B
Cash, Cash Equivalents and Short-Term Investments	32.29M	32.29M	28.90M	11.24M	1.92M	6.50M
Total Debt	0.00	348.56M	313.52M	377.18M	141.62M	180.17M
Total Liabilities	-1.38B	997.86M	1.71B	1.74B	1.32B	1.34B
Stockholders Equity	1.38B	1.38B	1.33B	1.17B	1.14B	988.60M
Cash Flow
Free Cash Flow	0.00	-43.10M	-37.16M	-23.25M	-66.94M	25.98M
Operating Cash Flow	0.00	8.95M	-29.94M	-12.81M	-44.93M	54.77M
Investing Cash Flow	0.00	-59.39M	-17.02M	4.41M	-21.97M	-28.79M
Financing Cash Flow	0.00	49.24M	55.85M	13.54M	22.53M	-24.51M

Aarey Drugs & Pharmaceuticals Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 68.03
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:AAREYDRUGS, the sentiment is Negative. The current price of 68.03 is above the 20-day moving average (MA) of 66.94, below the 50-day MA of 72.11, and below the 200-day MA of 69.67, indicating a neutral trend. The MACD of -0.50 indicates Negative momentum. The RSI at 51.37 is Neutral, neither overbought nor oversold. The STOCH value of 86.72 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:AAREYDRUGS.

Aarey Drugs & Pharmaceuticals Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALPA	70 Neutral	₹1.45B	7.76	―	―	14.53%	-10.49%
BAFNAPH	58 Neutral	₹2.72B	31.00	―	―	-0.77%	2055.99%
BALPHARMA	58 Neutral	₹1.07B	13.16	―	1.62%	-9.07%	5.36%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
AAREYDRUGS	48 Neutral	₹1.97B	54.94	―	―	-17.47%	-50.07%
KREBSBIO	41 Neutral	₹1.28B	-4.66	―	―	-46.31%	-26.28%