Aarti Pharmalabs Limited (AARTIPHARM) AI Stock Analysis

• Market Cap: ₹69.01B
• Dividend Yield: 0.67%
• Average Volume (3M): 18.67K
• Price to Earnings (P/E): 28.8
• Beta (1Y): 0.64
• 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): 3.08
• Shares Outstanding: 90,647,290
• 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: 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: 59 Neutral
• Price Target: ₹797.00 ▼(-5.39% Downside)

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

Revenue Growth

A 16% revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion.

Margin Improvement

Improved margins reflect effective cost management, enhancing profitability and providing a cushion against market volatility.

Balance Sheet Health

A strong balance sheet with low leverage and high equity ratio ensures financial stability and flexibility for future investments.

Negative Factors

Negative Free Cash Flow

Negative free cash flow can limit liquidity and restrict the company's ability to invest in growth opportunities without additional funding.

Liquidity Challenges

Insufficient cash generation relative to earnings suggests potential liquidity issues, impacting operational flexibility and growth capacity.

Operational Efficiency

While margins are strong, there is room for further efficiency improvements to enhance profitability and competitive positioning.

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 that need addressing.

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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	19.46B	21.15B	18.16B	19.45B	11.92B	0.00
Gross Profit	9.87B	9.87B	3.91B	4.14B	3.12B	0.00
EBITDA	4.71B	4.74B	3.91B	3.44B	1.98B	-45.96K
Net Income	2.66B	2.72B	2.17B	1.93B	1.22B	-45.96K
Balance Sheet
Total Assets	0.00	29.06B	25.82B	22.44B	20.40B	2.50M
Cash, Cash Equivalents and Short-Term Investments	562.06M	562.06M	940.33M	631.11M	832.73M	2.50M
Total Debt	0.00	4.13B	2.85B	2.15B	3.41B	173.00K
Total Liabilities	-19.90B	9.16B	8.25B	6.86B	6.53B	232.71K
Stockholders Equity	19.90B	19.90B	17.57B	15.58B	13.86B	2.27M
Cash Flow
Free Cash Flow	0.00	-704.76M	175.69M	1.30B	-1.85B	0.00
Operating Cash Flow	0.00	3.32B	2.16B	2.50B	-437.04M	0.00
Investing Cash Flow	0.00	-4.14B	-2.15B	-1.58B	-1.39B	0.00
Financing Cash Flow	0.00	654.35M	97.23M	-1.63B	2.60B	0.00

Aarti Pharmalabs Limited Technical Analysis

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:AARTIPHARM, the sentiment is Positive. The current price of 842.4 is above the 20-day moving average (MA) of 748.50, above the 50-day MA of 741.85, and above the 200-day MA of 816.91, indicating a neutral trend. The MACD of 2.80 indicates Negative momentum. The RSI at 55.91 is Neutral, neither overbought nor oversold. The STOCH value of 71.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	₹696.09B	20.34	―	0.33%	7.33%	-3.79%
CIPLA	68 Neutral	₹1.18T	21.76	―	0.87%	6.93%	21.55%
LAURUSLABS	66 Neutral	₹584.29B	85.38	―	0.15%	25.83%	421.20%
AARTIPHARM	59 Neutral	₹69.01B	28.78	―	0.67%	-3.15%	5.11%
AARTIDRUGS	57 Neutral	₹35.15B	17.65	―	0.24%	4.08%	31.52%
GLENMARK	53 Neutral	₹566.35B	56.08	―	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 Reports Stable Financial Performance for H1 2025

Aarti Pharmalabs Limited announced its unaudited financial results for the quarter and half-year ending September 30, 2025. The Board of Directors approved the financial results, which showed a total income of 79,734.25 lakhs for the half-year, reflecting a stable financial performance. The results, reviewed by the Audit Committee, indicate the company’s continued focus on maintaining robust financial health and transparency. This announcement could reinforce Aarti Pharmalabs’ market position and reassure stakeholders of its operational stability.