Aarti Pharmalabs Limited (AARTIPHARM) AI Stock Analysis

• Market Cap: ₹58.67B
• Dividend Yield: 0.67%
• Average Volume (3M): 18.67K
• Price to Earnings (P/E): 35.6
• Beta (1Y): 0.80
• Revenue Growth: -3.15%
• EPS Growth: 5.11%
• Country: IN
• Employees: 2,095
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 5.29
• Shares Outstanding: 90,657,750
• 10 Day Avg. Volume: 12,195
• 30 Day Avg. Volume: 18,670
• PEG Ratio: 0.98
• Price to Book (P/B): 3.43
• Price to Sales (P/S): 3.23
• P/FCF Ratio: -96.96
• 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: ₹965.00
• Price Target Upside: 14.55% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 59 Neutral
• Price Target: ₹800.00 ▼(-5.03% Downside)
• Action: Reiterated Date: 11/25/25
• Date: Action: Reiterated 11/25/25

The overall stock score of 59 reflects strong financial performance but is weighed down by bearish technical indicators and moderate valuation. The company's robust growth and profitability are offset by liquidity concerns due to negative free cash flow and current market momentum.

Positive Factors

Balance sheet strength

A low debt-to-equity ratio and high equity share signal conservative leverage and a solid capital base, reducing refinancing risk. Improved ROE indicates efficient capital use; this financial flexibility supports long-term capex, R&D or contract wins without stressing solvency.

Margin improvement

Sustained high gross and healthy EBITDA margins reflect cost control and pricing power in APIs/intermediates. Strong margin structure provides durable buffer against raw material swings and supports reinvestment, making profits more resilient over the medium term.

Recent revenue expansion

Double-digit top-line growth year-over-year indicates expanding commercial traction and stronger demand for API products. For a B2B manufacturer, this suggests improving capacity utilization and customer wins, which can translate to durable revenue momentum if sustained.

Negative Factors

Negative free cash flow

Negative free cash flow driven by high capex means accounting profits aren't converting to available cash. Persisting FCF deficits can force external financing, constrain dividends or limit strategic investments, raising medium-term liquidity and execution risk.

Reported revenue-growth inconsistency

Conflicting indicators on revenue growth suggest volatility or timing differences in reported metrics. Structural uncertainty in top-line trends complicates forecasting and may reflect uneven order flows or customer concentration, weakening predictability of future cash flows.

Earnings per share contraction

Negative EPS growth indicates per-share profitability has declined, which can stem from margin pressure, higher costs, or dilution. Over the medium term, falling EPS reduces retained earnings and the company’s ability to self-fund growth or return capital to shareholders.

Aarti Pharmalabs Limited Business Overview & Revenue Model

Company Description

Aarti Pharmalabs Limited manufactures and sells active pharmaceutical ingredients, pharmaceutical intermediates, new chemical entities, and xanthine derivatives in India. The company was formerly known as Aarti Organics Limited. Aarti Pharmalabs Limited was incorporated in 2019 and is based in Mumbai, India.

How the Company Makes Money

Aarti Pharmalabs generates revenue through multiple streams, primarily by manufacturing and selling APIs to pharmaceutical companies worldwide. The company has established significant partnerships with leading global pharmaceutical firms, which contribute to consistent demand for its products. Additionally, AARTIPHARM's revenue model is supported by its capability to provide custom synthesis and contract manufacturing services, allowing clients to outsource their production needs. The company also benefits from its diversified product portfolio across various therapeutic segments, which helps mitigate risks associated with market fluctuations. Other revenue sources may include the sale of specialty chemicals and agrochemical products, particularly to industries seeking high-quality intermediates and formulations.

Aarti Pharmalabs Limited Financial Statement Overview

Summary

Aarti Pharmalabs Limited shows strong revenue growth and profitability with improved margins. The balance sheet is stable with low leverage, but negative free cash flow indicates potential liquidity challenges.

Income Statement

Aarti Pharmalabs Limited has demonstrated robust revenue growth with a significant increase from INR 18.16 billion in 2024 to INR 21.15 billion in 2025, reflecting a growth rate of approximately 16%. The gross profit margin improved to 46.67% in 2025, indicating effective cost management. Net profit margin also increased to 12.88%, showcasing enhanced profitability. However, the EBIT and EBITDA margins, although strong at 17.85% and 21.95% respectively, highlight that there is room for further operational efficiency improvements.

Balance Sheet

The company's balance sheet is solid with a debt-to-equity ratio of 0.21 in 2025, reflecting a conservative leverage approach. The equity ratio stands at 68.48%, indicating a strong equity position relative to total assets. Return on equity (ROE) has improved to 13.69%, signaling effective use of shareholders' capital. Overall, the balance sheet reflects stability and financial health, with low levels of risk from leverage.

Cash Flow

While operating cash flow has increased year-over-year, the free cash flow remains negative due to high capital expenditures. The free cash flow to net income ratio is -0.26, suggesting that current earnings are not translating into free cash flow, which could pose liquidity challenges. The operating cash flow to net income ratio of 1.22 indicates that the company's operations are generating cash, albeit not sufficiently to cover capital investments.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	19.06B	21.15B	18.16B	19.45B	11.92B	0.00
Gross Profit	9.05B	9.87B	3.91B	4.14B	3.12B	0.00
EBITDA	4.48B	4.74B	3.91B	3.44B	1.98B	-45.96K
Net Income	2.40B	2.72B	2.17B	1.93B	1.22B	-45.96K
Balance Sheet
Total Assets	32.66B	29.06B	25.82B	22.44B	20.40B	2.50M
Cash, Cash Equivalents and Short-Term Investments	555.56M	562.06M	940.33M	631.11M	832.73M	2.50M
Total Debt	6.59B	4.13B	2.85B	2.15B	3.41B	173.00K
Total Liabilities	12.20B	9.16B	8.25B	6.86B	6.53B	232.71K
Stockholders Equity	20.46B	19.90B	17.57B	15.58B	13.86B	2.27M
Cash Flow
Free Cash Flow	-1.17B	-704.76M	175.69M	1.30B	-1.85B	0.00
Operating Cash Flow	996.13M	3.32B	2.16B	2.50B	-437.04M	0.00
Investing Cash Flow	-2.22B	-4.14B	-2.15B	-1.58B	-1.39B	0.00
Financing Cash Flow	1.48B	654.35M	97.23M	-1.63B	2.60B	0.00

Aarti Pharmalabs Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 842.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:AARTIPHARM, the sentiment is Negative. The current price of 842.4 is above the 20-day moving average (MA) of 691.13, above the 50-day MA of 731.61, and above the 200-day MA of 809.86, indicating a bearish trend. The MACD of -23.15 indicates Positive momentum. The RSI at 35.75 is Neutral, neither overbought nor oversold. The STOCH value of 12.49 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:AARTIPHARM.

Aarti Pharmalabs Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AUROPHARMA	74 Outperform	₹747.72B	18.87	―	0.33%	7.33%	-3.79%
CIPLA	68 Neutral	₹1.04T	45.14	―	0.87%	6.93%	21.55%
LAURUSLABS	66 Neutral	₹522.72B	59.42	―	0.15%	25.83%	421.20%
AARTIPHARM	59 Neutral	₹58.67B	35.56	―	0.67%	-3.15%	5.11%
AARTIDRUGS	57 Neutral	₹30.48B	23.17	―	0.24%	4.08%	31.52%
GLENMARK	53 Neutral	₹606.00B	35.61	―	0.24%	30.27%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Aarti Pharmalabs Limited Corporate Events

Aarti Pharmalabs Posts Q3 FY26 Earnings Call Recording Online

Aarti Pharmalabs Limited has announced that the audio recording of its investors and analysts earnings conference call, covering the unaudited financial results for the third quarter and nine months ended December 31, 2025, is now available on its website. By publishing this recording, the company is enhancing transparency and providing stakeholders with easier access to management’s discussion of recent financial performance and business developments, supporting informed decision-making for investors and analysts.

Aarti Pharmalabs Schedules Q3 FY26 Earnings Call for 10 February

Aarti Pharmalabs Limited has scheduled an earnings conference call with investors and analysts on 10 February 2026 to discuss its financial results for the third quarter of fiscal 2025-26. The call, to be held at 4:00 p.m. IST and led by the company’s top management including the chairman, vice chairperson and managing director, and chief financial officer, underlines the company’s ongoing engagement with the investment community and will provide stakeholders with updates on operating and financial performance for the quarter and nine-month period.