Stock Performance and Market Context
On the day the new low was recorded, Unichem Laboratories Ltd’s share price fell by 2.28% intraday, closing with a day change of -1.67%. This decline extended a two-day losing streak, during which the stock has lost 2.8% in value. The stock underperformed the Pharmaceuticals & Biotechnology sector by 0.92% on the same day. Notably, Unichem’s share price is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained downward momentum.
In contrast, the broader market index, Sensex, experienced a negative session, falling 0.76% to 81,623.14 points after opening flat. While the Sensex is trading below its 50-day moving average, the 50DMA remains above the 200DMA, indicating mixed technical signals for the broader market environment.
Over the past year, Unichem Laboratories Ltd has delivered a total return of -43.49%, significantly lagging the Sensex’s positive 9.40% return. The stock’s 52-week high was Rs.727.95, highlighting the extent of the recent decline.
Financial Metrics and Profitability Concerns
Several financial indicators contribute to the cautious stance on Unichem Laboratories Ltd. The company’s Debt to EBITDA ratio stands at a high 4.87 times, indicating a relatively low capacity to service its debt obligations. This elevated leverage level is a key factor in the company’s current market valuation and risk profile.
Net sales growth has averaged 11.95% annually over the last five years, which is modest within the Pharmaceuticals & Biotechnology sector. Return on Equity (ROE) has been low, averaging 1.44%, reflecting limited profitability generated per unit of shareholders’ funds.
Recent quarterly results for the period ending December 2025 further underscore challenges. Profit Before Tax (PBT) excluding other income was Rs.6.11 crore, down 77.2% compared to the previous four-quarter average. Profit After Tax (PAT) stood at Rs.16.13 crore, a decline of 56.0% over the same comparative period. Meanwhile, interest expenses for the latest six months increased by 30.50% to Rs.15.66 crore, adding pressure on the company’s earnings.
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Long-Term and Sector Comparison
Unichem Laboratories Ltd’s long-term performance has been below par relative to its sector and broader market indices. The stock has underperformed the BSE500 index over the last three years, one year, and three months. Despite this, the company has demonstrated healthy long-term growth in operating profit, which has increased at an annual rate of 148.09%. This suggests some operational efficiency improvements or favourable product mix changes over the longer term.
The company’s Return on Capital Employed (ROCE) is 4.9%, which, while modest, contributes to a valuation that is considered very attractive. The Enterprise Value to Capital Employed ratio stands at 1, indicating the stock is trading at a discount compared to its peers’ average historical valuations. Additionally, the company’s profits have risen by 29.9% over the past year, despite the share price decline, resulting in a Price/Earnings to Growth (PEG) ratio of 0.8.
Shareholding and Market Sentiment
Promoters remain the majority shareholders of Unichem Laboratories Ltd, maintaining significant control over the company’s strategic direction. The company’s Mojo Score is 31.0, with a Mojo Grade of Sell, downgraded from Strong Sell on 16 Feb 2026. The Market Cap Grade is 3, reflecting the company’s mid-tier market capitalisation within its sector.
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Summary of Key Financial and Market Indicators
Unichem Laboratories Ltd’s recent share price decline to Rs.344.85 marks a significant technical low point, reflecting a combination of subdued profitability, elevated debt levels, and recent quarterly earnings declines. The stock’s underperformance relative to the Sensex and its sector highlights ongoing challenges in delivering shareholder returns. While some long-term operating profit growth and valuation metrics suggest areas of relative strength, the prevailing market sentiment remains cautious.
Investors and market participants will note the stock’s position below all major moving averages and its recent downgrade in Mojo Grade, which collectively indicate a period of consolidation or correction within the Pharmaceuticals & Biotechnology sector.
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