ALEMBICLTD - Alembic

📊 NSE: ALEMBICLTD 🏢 Construction 📅 Last Updated: 12/13/2025 18:07

💰 Financial Performance

Revenue Growth by Segment

For H1 FY26, the Active Pharmaceutical Ingredients (API) business revenue grew by 27.94% YoY to INR 23.26 Cr from INR 18.18 Cr. The Real Estate business revenue decreased by 3.71% YoY to INR 82.35 Cr from INR 85.52 Cr. Total consolidated revenue for H1 FY26 was INR 105.61 Cr, up 1.84% YoY from INR 103.70 Cr.

Geographic Revenue Split

Operations are primarily concentrated in Vadodara, Gujarat, where the company's 102-acre land bank and API manufacturing facilities are located. Specific regional revenue percentages are not disclosed.

Profitability Margins

For FY25, the company registered a net profit of INR 141.95 Cr on a gross revenue of INR 214.36 Cr, resulting in a net profit margin of 66.22%. This high margin is primarily driven by significant dividend income from group companies, which amounted to INR 62.88 Cr in H1 FY26 alone.

EBITDA Margin

Operating profit before working capital changes for H1 FY26 was INR 46.84 Cr, up 11.42% from INR 42.04 Cr in H1 FY25. The consolidated net profit before tax for H1 FY26 was INR 104.57 Cr, a 3.33% increase YoY.

Capital Expenditure

Historical and planned CAPEX figures are not explicitly disclosed in the provided documents, though the company continues to develop its 102-acre land bank into mixed-use assets.

Credit Rating & Borrowing

ICRA reaffirmed the long-term rating at [ICRA]AA- (Stable) and the short-term rating at [ICRA]A1+ on May 30, 2025. Borrowing costs are low as the company maintains negligible debt levels, with total long-term borrowings of only INR 8.57 Cr as of September 30, 2025.

⚙️ Operational Drivers

Raw Materials

Penicillin-G (Pen-G) is the primary raw material for the fermentation-based API business. Specific cost percentages for Pen-G are not disclosed.

Capacity Expansion

Current energy capacity includes four windmills (5 MW) and two co-generation power plants (6 MW) used for captive consumption in the API business. Real estate capacity is centered on a 102-acre land bank in Vadodara.

Raw Material Costs

Raw material costs are subject to volatility in the Pen-G business. In H1 FY26, inventories decreased by INR 7.36 Cr compared to an increase of INR 4.45 Cr in H1 FY25, reflecting shifts in procurement and production cycles.

Manufacturing Efficiency

Efficiency is driven by the integration of captive power plants (11 MW total capacity) which support the fermentation process in the bulk drugs division.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth is targeted through the development of the 102-acre land bank in Vadodara into high-value mixed-use and residential assets. Additionally, the company leverages its 28.41% stake in Alembic Pharmaceuticals Limited and 19.01% stake in Paushak Limited to ensure steady dividend-backed cash flows for reinvestment.

Products & Services

Active Pharmaceutical Ingredients (APIs/Bulk Drugs), leased commercial properties, residential real estate units, and wind power generation.

Brand Portfolio

Alembic

New Products/Services

The company is focusing on developing 'Alembic City' and other mixed-use real estate assets to capitalize on urbanization trends.

Market Expansion

Expansion is focused on the Vadodara real estate market, reinforcing its position as a niche developer of premium commercial and residential spaces.

Market Share & Ranking

The company is positioned as a 'niche developer' in the real estate sector and a pioneer in Penicillin-G based API manufacturing in India.

🌍 External Factors

Industry Trends

The real estate industry is evolving toward mixed-use developments and organized leasing. The API industry is facing increased scrutiny regarding manufacturing standards and environmental compliance.

Competitive Landscape

The company competes with local and regional real estate developers in Gujarat and global API manufacturers.

Competitive Moat

The company's moat is its 28.41% stake in APL, providing high financial flexibility and a steady cash flow that is independent of its standalone operations. This is supplemented by a legacy land bank acquired at historical costs, providing a significant cost advantage in real estate development.

Macro Economic Sensitivity

Real estate demand is highly sensitive to urbanization trends and interest rate cycles, while the API business is sensitive to global pharmaceutical regulatory changes.

Consumer Behavior

Subdued demand in real estate was noted during the pandemic, with some buyers delaying payments due to economic uncertainties.

Geopolitical Risks

The API business is exposed to global trade dynamics and potential import restrictions on key fermentation inputs.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Companies Act 2013, SEBI Listing Regulations, and pharmaceutical manufacturing standards. Real estate operations are subject to local land use and labor regulations.

Environmental Compliance

The API division must adhere to strict pollution norms and manufacturing compliance standards, which are monitored as part of social and environmental risk assessments.

Taxation Policy Impact

The company's deferred tax liability (net) increased significantly to INR 47.47 Cr as of September 2025 from INR 28.37 Cr in the previous year.

Legal Contingencies

ICRA is monitoring a specific liability and its potential impact on the credit profile, though the exact INR value is not disclosed in the summary.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the volatility of the Pen-G business and the heavy reliance on dividend income from APL, which is subject to pharmaceutical market dynamics.

Geographic Concentration Risk

High geographic concentration risk as the majority of real estate assets and API operations are located in Vadodara, Gujarat.

Third Party Dependencies

Dependency on group companies (APL and Paushak) for a significant portion of total comprehensive income.

Technology Obsolescence Risk

The API division faces risks if fermentation technologies shift or if newer, more cost-effective synthetic routes are developed for its product portfolio.