Aarti Drugs (AARTIDRUGS)

FairStock Score: 40/100 — MIXED

Score breakdown: P/E: 2/3 · ROCE: 1/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• Modest leverage: D/E 0.39 and Piotroski F-Score 7/9 indicate financial health.
• Promoter holding of 55.03% aligns owners with minority shareholders.
• ROE of 16.02% and positive growth in sales (8.10%) and profit (9.42%) show a steady business.
• Latest quarter sales of ₹602 Cr and net profit of ₹41 Cr demonstrate scale and current profitability.
• P/E of 16.53 and P/B of 2.92 are not excessive for a pharma company, though not cheap.

Concerns

• PEG of 1.89 means the price already reflects most of the moderate growth; limited margin of safety.
• Dividend yield of 0.54% is low, so shareholders rely heavily on stock appreciation.
• ROCE of 13.09% and ROE of 16.02% suggest decent but not wide-moat economics.
• Share is ~30% below 52-week high and FairStock Score 35/100 remains mixed.

AI Analysis

This is the kind of stock that makes me ask whether I am buying a great enterprise or merely a reasonable one. Aarti Drugs is a pharmaceutical company, and the numbers tell me it is decent, but not special. The return on equity is 16.02%, and the return on capital employed is 13.09%. That is respectable, yet it is not the kind of return that screams pricing power or a deep moat. The balance sheet is okay: debt to equity is 0.39, and the Piotroski F-Score of 7/9 suggests the fundamentals are improving or at least holding up. Promoters hold 55.03%, so my interests are tied to people who have skin in the game. But value investing demands a good price, and I am not convinced this is one. Sales grew 8.10%, profit grew 9.42%. Those are slow, steady numbers, not exciting. At ₹372, the stock trades at 16.53 times earnings and 2.92 times book value. With a PEG ratio of 1.89, the market is asking me to pay more than one times the growth rate, leaving little margin of safety. The dividend yield of 0.54% is negligible. This stock cannot support an income investor's patience. I also see the share price is nearly 30% below the 52-week high of ₹534.55, yet still about 17% above the low of ₹318.95. The low FairStock Score of 35/100 and the modest returns make me wonder if the market is being rational. Graham would say the price must be low enough to compensate for uncertainty. It is not. The latest quarter shows sales of ₹602 Cr and net profit of ₹41 Cr, but I need more evidence of consistent growth and a wider earnings cushion. For now, Aarti Drugs seems like a respectable stalwart with fair financial health, but not an opportunity I would rush into.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer