Revenue and Profit Growth
Alkem Lab’s net sales have shown a steady upward trend, increasing from ₹7,357 crore in March 2019 to nearly ₹12,965 crore by March 2025. This represents a compound growth trajectory reflecting the company’s expanding market presence and product portfolio. Operating profit before depreciation and interest (PBDIT) excluding other income rose from approximately ₹1,115 crore in 2019 to over ₹2,512 crore in 2025, indicating improved operational efficiency despite rising raw material and employee costs.
Incorporating other income, operating profit (PBDIT) climbed to ₹3,006 crore in 2025 from ₹1,202 crore in 2019. Profit before tax surged from ₹955 crore to ₹2,527 crore over the same period, while profit after tax nearly tripled from ₹774 crore to ₹2,216 crore. The consolidated net profit followed a similar trajectory, reaching ₹2,165 crore in 2025 compared to ₹761 crore in 2019.
Margins have also improved, with operating profit margin (excluding other income) rising to 19.38% in 2025 from 15.15% in 2019. The profit after tax margin expanded to 17.09% in 2025, up from 10.52% six years earlier, underscoring enhanced profitability and cost management.
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Balance Sheet Strength and Asset Base
The company’s shareholder funds have grown robustly from ₹6,161 crore in 2020 to nearly ₹11,985 crore in 2025, reflecting retained earnings and capital accumulation. Reserves have similarly expanded, reaching ₹11,925 crore in 2025 from ₹5,415 crore in 2019. Book value per share has increased significantly, from ₹515 in 2020 to over ₹1,000 in 2025, indicating enhanced net asset value per share.
Alkem Lab’s total assets have nearly doubled over six years, rising from ₹9,013 crore in 2020 to ₹15,953 crore in 2025. This growth is supported by increases in both current and non-current assets, including investments and capital work in progress. The net block of fixed assets remains stable, reflecting ongoing capital expenditure and asset maintenance.
On the liabilities side, total debt has been managed prudently, decreasing from ₹2,580 crore in 2022 to ₹1,063 crore in 2025. The company’s long-term borrowings increased moderately in 2025 but remain well within manageable limits relative to equity. Trade payables and other current liabilities have increased in line with business expansion, while deferred tax liabilities have grown, reflecting accumulated tax obligations.
Cash Flow and Financial Flexibility
Operating cash flow has shown consistent strength, rising from ₹585 crore in 2020 to ₹1,912 crore in 2025. This reflects the company’s ability to generate cash from core operations despite working capital fluctuations. Cash flow after changes in working capital also improved, reaching ₹2,416 crore in 2025, up from ₹868 crore in 2020.
Investing activities have generally involved significant outflows, consistent with capital expenditure and strategic investments, with ₹1,288 crore spent in 2025. Financing activities have seen net outflows in recent years, indicating debt repayments and shareholder returns. The net cash position has fluctuated, with a slight negative cash equivalent reported in 2025, likely due to timing of investments and financing.
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Summary of Historical Performance
Over the past six years, Alkem Lab has exhibited a commendable growth trajectory characterised by rising sales, expanding profit margins, and a strengthening balance sheet. The company’s ability to increase net sales by over 75% since 2019, while improving operating and net profit margins, highlights operational efficiency and market resilience. The steady increase in shareholder equity and book value per share further underscores the firm’s value creation for investors.
Despite increased capital expenditure and investments, the company has maintained healthy cash flows from operations, supporting its growth initiatives and debt servicing. The reduction in total debt from peak levels in 2022 reflects a focus on financial prudence. Overall, Alkem Lab’s historical performance suggests a well-managed enterprise with sustainable growth prospects, balancing expansion with profitability and financial stability.
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