APLLTD - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.3

📊 Fundamental Analysis Summary

Aarti Pharmalabs Ltd (APLLTD) shows moderate fundamentals with a few red flags for long-term investors. While the company operates in a promising sector and maintains a decent dividend yield, its high PEG ratio (11.3) and declining quarterly profit suggest overvaluation and potential growth stagnation.

Metric Value Interpretation

P/E Ratio 35.0 Slightly above industry average — signals premium pricing

PEG Ratio 11.3 Extremely high — indicates poor value for growth

ROE / ROCE 11.4% / 13.0% Below ideal for long-term compounding — moderate capital efficiency

Dividend Yield 1.09% Decent — adds some passive income

Debt-to-Equity 0.24 Manageable — not a major concern

EPS ₹29.7 Reasonable earnings — but not growing fast

PAT Growth (QoQ) -12.1% Negative — signals earnings pressure

Book Value ₹264 Price-to-book ~3.8× — expensive for current ROE

RSI / MACD 53.7 / +8.46 RSI neutral; MACD positive — short-term momentum building

FII/DII Change Flat No strong institutional conviction

52W Price Range ₹725 – ₹1,304 Currently mid-range — not ideal for fresh entry

📉 Ideal Entry Price Zone

Given the valuation concerns and weak growth indicators

Entry Zone: ₹880 – ₹940

Aligns with technical support near 200-DMA.

Avoid entry above ₹1,000 unless PEG improves significantly.

🧭 Exit Strategy & Holding Period

Holding Period

1–2 years unless growth metrics improve.

Exit Strategy

Consider exit if PEG remains above 5.0 and ROE stagnates below 12%.

Reassess if PAT continues to decline or price crosses ₹1,200 without earnings support.

Key Metrics to Monitor

PEG ratio trending below 2.0

PAT growth returning to positive territory

ROCE improving to 15%+

🧠 Final Thoughts

APLLTD is not an ideal long-term compounder at current levels. It may suit short- to medium-term investors seeking momentum, but long-term holders should be cautious unless earnings growth resumes and valuations normalize.

Would you like a comparison with other specialty chemical or pharma players like Neuland Labs or Laurus Labs to explore better long-term picks?

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