Alkem Lab (ALKEM)

FairStock Score: 72/100 — STEADY

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

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

At ₹5,516, this is not the kind of bargain Benjamin Graham taught me to buy. Alkem is a decent business — the 19.78% ROE, 20.38% ROCE and a debt/equity of only 0.18 tell me capital is being used carefully. A Piotroski score of 8/9 and an Altman Z of 4.29 confirm a financially sound company. The latest quarter showed sales of ₹3,737 Cr and net profit of ₹653 Cr, while full-year profit growth is around 10.13% on 11.73% sales growth. That is steady, not spectacular. The five-year revenue CAGR of 7.90% reminds me that compounding is moderate, and free cash flow of ₹625 Cr supports the dividend yield of 0.80%. But the price is a problem. At a P/E of 28.09 and P/B of 5.50, the market is paying a rich price for a stalwart. The Graham number is only ₹2,114.58, giving a margin of safety of -166.70%; even a discounted cash flow estimate of ₹844.41 suggests the market has run far ahead of conservative value. A PEG of 10.33 tells me the valuation is not justified by current growth. This is a quality pharma business — with 51.20% promoter holding, it has committed owners — but I cannot buy quality at any price. I need margin of safety. Here, I would wait for a better price or a clear acceleration in earnings before acting.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

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