Recent Price Movement and Market Context
The stock has been on a downward trajectory for the past five consecutive trading sessions, cumulatively losing 2.17% in value during this period. On the day in question, the share price touched an intraday low of Rs.430.5, representing a 2.76% decline from the previous close. This performance notably underperformed the Pharmaceuticals & Biotechnology sector by 0.29% on the same day.
Unichem Laboratories is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling a persistent bearish trend. In contrast, the benchmark Sensex opened lower at 84,600.99 points, down 0.11%, and was trading marginally down by 0.08% at 84,625.89 points during the same session. The Sensex remains 1.81% shy of its 52-week high of 86,159.02 points, with its 50-day moving average positioned above the 200-day moving average, indicating a more stable medium-term market trend.
Long-Term Performance and Valuation Metrics
Over the past year, Unichem Laboratories has delivered a negative return of 37.80%, a stark contrast to the Sensex’s positive 8.23% gain over the same period. The stock’s 52-week high was Rs.785.85, highlighting the extent of the recent decline. This underperformance extends beyond the last year, with the stock lagging behind the BSE500 index across one-year, three-year, and three-month timeframes.
From a valuation standpoint, the company’s Return on Capital Employed (ROCE) stands at 4.9%, and it maintains an enterprise value to capital employed ratio of 1.2, which is considered attractive relative to its peers. Despite the share price decline, the company’s profits have surged by 419.9% over the past year, resulting in a low Price/Earnings to Growth (PEG) ratio of 0.1. This suggests that while the market has penalised the stock, underlying profit growth has been substantial.
While markets shift, this one's charging ahead! This Micro Cap from Aquaculture shows the strongest momentum signals in current conditions. Don't miss out on this ride!
- - Strongest current momentum
- - Market-cycle outperformer
- - Aquaculture sector strength
Financial Health and Profitability Concerns
One of the key factors weighing on Unichem Laboratories’ stock performance is its limited capacity to service debt. The company’s Debt to EBITDA ratio is elevated at 4.87 times, indicating a relatively high leverage position. This is further reflected in the debt-equity ratio, which reached its highest level of 0.21 times in the half-year period.
Profitability metrics also remain subdued. The average Return on Equity (ROE) is a modest 1.44%, signalling low profitability generated per unit of shareholders’ funds. Additionally, the company’s interest expenses have increased by 25.99% in the most recent quarter, amounting to Rs.8.24 crores, which adds pressure on earnings.
Non-operating income constitutes a significant 44.20% of the company’s Profit Before Tax (PBT), suggesting that a substantial portion of profits is derived from sources outside core business operations. This reliance may contribute to volatility in earnings quality.
Growth Trends and Sector Positioning
Despite the challenges, Unichem Laboratories has demonstrated healthy long-term growth in operating profit, which has increased at an annual rate of 37.55% over the last five years. Net sales have grown at a more modest annual rate of 12.60% during the same period. The company’s market capitalisation grade is rated 3, reflecting a mid-tier valuation within its sector.
The Pharmaceuticals & Biotechnology sector itself has shown resilience, with the Sensex and sector indices maintaining relatively stable levels. However, Unichem’s stock has not mirrored this stability, continuing to trade at a discount compared to its peers’ average historical valuations.
Why settle for Unichem Laboratories Ltd? SwitchER evaluates this Pharmaceuticals & Biotechnology small-cap against peers, other sectors, and market caps to find you superior investment opportunities!
- - Comprehensive evaluation done
- - Superior opportunities identified
- - Smart switching enabled
Shareholding and Market Sentiment
The majority ownership of Unichem Laboratories remains with promoters, which often provides a degree of stability in governance and strategic direction. However, the current market sentiment reflects caution, as evidenced by the downgrade in the company’s Mojo Grade from Hold to Sell on 22 July 2025, with a current Mojo Score of 42.0.
On the trading day when the 52-week low was recorded, the stock experienced a day change of -0.38%, further underscoring the subdued investor response. The company’s market cap grade of 3 places it in a moderate category relative to other listed entities in the Pharmaceuticals & Biotechnology sector.
Summary of Key Metrics
To encapsulate, Unichem Laboratories Ltd’s stock has reached a new 52-week low of Rs.430.5 amid a backdrop of sustained price declines and underperformance relative to the Sensex and sector indices. The company faces challenges related to leverage and profitability, with a high Debt to EBITDA ratio of 4.87 times and a low average ROE of 1.44%. While operating profit growth remains robust at 37.55% annually, net sales growth is comparatively modest at 12.60% per annum.
The stock’s valuation metrics indicate an attractive enterprise value to capital employed ratio of 1.2 and a low PEG ratio of 0.1, reflecting significant profit growth despite the share price decline. The downgrade in Mojo Grade to Sell and the ongoing negative price momentum highlight the cautious stance adopted by the market towards Unichem Laboratories.
Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year (MRP = Rs. 34,999) Start Saving Now →
