SMS Pharmaceuticals Limited (SMSPHARMA) AI Stock Analysis

• Market Cap: ₹34.24B
• Dividend Yield: 0.13%
• Average Volume (3M): 105.50K
• Price to Earnings (P/E): 30.0
• Beta (1Y): 1.49
• Revenue Growth: 11.91%
• EPS Growth: 36.92%
• Country: IN
• Employees: 1,197
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - General
• EPS (TTM): 2.51
• Shares Outstanding: 93,652,030
• 10 Day Avg. Volume: 15,241
• 30 Day Avg. Volume: 105,503
• PEG Ratio: 0.70
• Price to Book (P/B): 2.91
• Price to Sales (P/S): 2.38
• P/FCF Ratio: -31.61
• 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: 70 Outperform
• Price Target: ₹402.00 ▲(23.54% Upside)
• Action: Upgraded Date: 03/11/26
• Date: Action: Upgraded 03/11/26

The score is driven primarily by improving price trend and bullish technical momentum, while financial performance is mixed due to volatile net income and inconsistent free cash flow. Valuation is moderate-to-stretched on earnings (P/E ~30) but supported by a high dividend yield.

Positive Factors

Steady Revenue Growth

Consistent revenue growth from 2020–2025 indicates durable demand for the company's API portfolio and expanding market penetration. Over 2–6 months this supports stable capacity utilization, stronger supplier/customer bargaining, and predictable scale benefits that underpin long-term cash generation and strategic investment.

Healthy Operating Margins

Sustained EBIT/EBITDA margins point to manufacturing efficiency and pricing power in niche APIs. Margin resilience allows SMS to absorb raw material swings, fund maintenance and regulatory compliance, and finance selective R&D or capacity expansion—supporting profitability stability across cycles.

Moderate Leverage / Strong Equity

A balanced debt-to-equity profile and solid equity backing provide financial flexibility for reinvestment, working capital, and export qualification processes. This structural balance reduces refinancing risk, enabling sustained operations and investment in compliance/capacity over the medium term.

Negative Factors

Volatile Net Income

A pronounced net income decline in 2023 that produced a negative net margin undermines earnings quality and predictability. For management and investors this raises concerns about cost control, product mix risks, or one-off losses, complicating long-term planning for capex, dividends, and strategic initiatives.

Inconsistent Free Cash Flow

Material FCF volatility and occasional negative years suggest uneven cash conversion from operations, possibly due to capex cycles or working capital swings. Persistent variability can constrain internal funding for growth, increase reliance on external financing, and elevate liquidity risk during industry shocks.

Rising Debt Levels to Monitor

Noted increases in debt raise leverage and interest cost exposure, which can erode financial flexibility. Higher leverage amplifies downside risk from earnings volatility and may limit ability to invest in GMP upgrades or supplier diversification, making covenant and refinancing risk relevant over the medium term.

SMS Pharmaceuticals Limited Business Overview & Revenue Model

Company Description

SMS Pharmaceuticals Limited manufactures and sells active pharmaceutical ingredients (APIs) and intermediates in India. The company offers anti-ulcer, anti-fungal, anti-migraine, anti-diabetic, erectile dysfunction, antiemetic, antiepileptic, antipsychotic, anti-hypertensive, anti-anginal, anti-viral, urinary antispasmodic, and anti-retroviral APIs. It is also involved in the contract research activities. The company also exports its products. SMS Pharmaceuticals Limited was incorporated in 1987 and is based in Hyderabad, India.

How the Company Makes Money

SMS Pharmaceuticals primarily makes money by manufacturing and selling active pharmaceutical ingredients (APIs) and related intermediates to pharmaceutical companies that use these materials to produce finished dosage medicines (e.g., tablets/capsules). Key revenue streams include (1) domestic API sales to Indian formulators and traders and (2) export API sales to international customers, where revenues are influenced by customer qualification cycles, regulatory compliance, and long-term supply relationships. Earnings are typically driven by product mix (higher-volume vs. higher-margin APIs), pricing and demand dynamics for specific molecules, manufacturing capacity utilization and operating efficiency, and raw material/input cost management. If the company earns material income from contract manufacturing, licensing, or significant strategic partnerships, that information is null.

SMS Pharmaceuticals Limited Financial Statement Overview

Summary

Revenue has grown steadily over 2020–2025 and operating margins (EBIT/EBITDA) are generally healthy, but earnings quality is weakened by a sharp net income drop in 2023 (negative net margin/ROE) and notably volatile free cash flow, including negative years.

Income Statement

SMS Pharmaceuticals Limited's revenue has shown a steady growth trajectory from 2020 to 2025, with notable year-on-year increases. However, the gross profit margin has seen some fluctuations, and there was a significant drop in net income in 2023, leading to a negative net profit margin that year. The EBIT and EBITDA margins have generally remained healthy, but the volatility in net income suggests some underlying issues with cost management or operational efficiency.

Balance Sheet

The company maintains a moderate debt-to-equity ratio, indicating a balanced approach to leveraging. The equity ratio is relatively strong, reflecting solid asset backing by equity. Return on equity has generally been positive, except for a negative ROE in 2023 due to the negative net income. Overall, the balance sheet suggests financial stability, though the increasing debt levels warrant monitoring.

Cash Flow

Operating cash flow has been positive, but free cash flow has fluctuated significantly, with negative figures in some years, highlighting potential liquidity constraints. The operating cash flow to net income ratio is inconsistent, further indicating volatility in cash generation relative to earnings. These fluctuations suggest challenges in maintaining consistent cash flow, possibly due to high capital expenditures or operational inefficiencies.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	8.60B	7.83B	7.09B	5.22B	5.15B	5.61B
Gross Profit	2.49B	1.45B	2.11B	1.29B	1.81B	1.81B
EBITDA	1.67B	1.45B	1.18B	593.89M	1.20B	1.25B
Net Income	843.60M	691.36M	498.26M	-70.59M	622.20M	625.27M
Balance Sheet
Total Assets	12.76B	11.53B	10.34B	8.80B	8.60B	8.12B
Cash, Cash Equivalents and Short-Term Investments	1.02B	415.86M	361.16M	73.78M	465.83M	404.23M
Total Debt	3.24B	3.11B	2.81B	2.54B	2.63B	2.55B
Total Liabilities	5.47B	5.13B	4.98B	4.19B	3.89B	4.02B
Stockholders Equity	7.29B	6.40B	5.36B	4.61B	4.70B	4.11B
Cash Flow
Free Cash Flow	126.58M	-588.57M	-20.35M	-74.71M	129.86M	-612.96M
Operating Cash Flow	423.25M	645.23M	501.25M	224.50M	402.34M	904.53M
Investing Cash Flow	-305.04M	-1.24B	-520.72M	-296.86M	-271.53M	-1.52B
Financing Cash Flow	462.69M	644.32M	306.79M	-319.69M	-69.21M	920.18M

SMS Pharmaceuticals Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 325.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:SMSPHARMA, the sentiment is Neutral. The current price of 325.4 is below the 20-day moving average (MA) of 378.78, below the 50-day MA of 345.37, and above the 200-day MA of 286.72, indicating a neutral trend. The MACD of 13.07 indicates Positive momentum. The RSI at 49.02 is Neutral, neither overbought nor oversold. The STOCH value of 42.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IN:SMSPHARMA.

SMS Pharmaceuticals Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SMSPHARMA	70 Outperform	₹34.24B	29.96	―	0.13%	11.91%	36.92%
MOREPENLAB	57 Neutral	₹20.67B	20.54	―	0.49%	-0.29%	-29.04%
MEDIASSIST	54 Neutral	₹23.26B	205.09	―	0.92%	―	―
SOLARA	54 Neutral	₹20.84B	-36.05	―	―	-4.18%	―
BAJAJHCARE	52 Neutral	₹8.83B	20.91	―	0.24%	13.04%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
INDOCO	49 Neutral	₹17.50B	-18.14	―	0.08%	-2.81%	-444.69%

SMS Pharmaceuticals Limited Corporate Events

SMS Pharmaceuticals Sets Up Wholly Owned Subsidiary SMS coLab for Greenfield Pharma Expansion

SMS Pharmaceuticals Limited has incorporated a new wholly owned subsidiary, SMS coLab Private Limited, following approval from the Ministry of Corporate Affairs on 23 December 2025, with an authorised capital of Rs. 15 lakh and paid-up capital of Rs. 1 lakh. The new entity, positioned as a greenfield project within the pharmaceuticals industry, is intended to focus on manufacturing pharmaceutical products in new therapeutic categories, as well as undertaking research, development, production, commercialization and distribution of a wide range of pharmaceutical products and related equipment, signalling an expansion of SMS Pharmaceuticals’ operational footprint and future growth ambitions.