Recent Price Movement and Market Context
On 9 December 2025, Unichem Laboratories’ stock price declined by 1.17%, underperforming its Pharmaceuticals & Biotechnology sector by 0.57%. The stock has recorded losses over the last three consecutive trading sessions, resulting in a cumulative return of -4.28% during this period. The current price of Rs.434 represents the lowest level the stock has traded at in the past 52 weeks, compared to its 52-week high of Rs.839.20.
In contrast, the broader market index, the Sensex, opened lower by 359.82 points and closed down by 340.58 points at 84,402.29, a decline of 0.82%. Despite this, the Sensex remains within 2.08% of its 52-week high of 86,159.02 and is trading above its 50-day moving average, which itself is positioned above the 200-day moving average, signalling a generally bullish trend for the index.
Unichem Laboratories, however, is trading below all key moving averages including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating sustained downward momentum in its share price.
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Financial Performance and Debt Metrics
Over the last year, Unichem Laboratories has recorded a total return of -45.14%, significantly lagging behind the Sensex’s 3.55% gain over the same period. The stock has also underperformed the BSE500 index across multiple time frames including the last three years, one year, and three months.
Examining the company’s financial health reveals a high Debt to EBITDA ratio of 4.87 times, which points to a relatively low capacity to service its debt obligations. The debt-equity ratio for the half-year period stands at 0.21 times, the highest recorded recently, indicating a modest but notable leverage position.
Interest expenses for the quarter amounted to Rs.8.24 crores, reflecting a growth rate of 25.99% compared to previous periods. Non-operating income constitutes 44.20% of the company’s profit before tax, highlighting a significant contribution from sources outside core operations.
Net sales have grown at an annual rate of 12.60% over the past five years, a figure that suggests moderate long-term revenue expansion. However, the average return on equity (ROE) is 1.44%, indicating limited profitability generated per unit of shareholders’ funds.
Profitability and Valuation Considerations
Despite the subdued share price performance, Unichem Laboratories has demonstrated healthy growth in operating profit, which has expanded at an annual rate of 37.55%. The company’s return on capital employed (ROCE) is recorded at 4.9%, a figure that, while modest, contributes to an enterprise value to capital employed ratio of 1.2. This valuation metric suggests the stock is trading at a discount relative to its peers’ historical averages.
Over the past year, profits have risen by 419.9%, a substantial increase that contrasts with the negative share price returns. The price/earnings to growth (PEG) ratio stands at 0.1, reflecting the relationship between the company’s earnings growth and its valuation.
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Shareholding and Sector Position
Unichem Laboratories operates within the Pharmaceuticals & Biotechnology sector, a segment that has seen varied performance across companies. The majority shareholding is held by promoters, maintaining a concentrated ownership structure.
The company’s market capitalisation grade is noted as 3, reflecting its relative size within the market. Despite the recent price decline, the stock remains a component of the sector’s investment landscape, with its valuation metrics and profit growth figures providing a complex picture of its current standing.
Summary of Key Challenges and Market Standing
The stock’s fall to Rs.434, its 52-week low, is underpinned by several factors including subdued returns over the past year, a high debt burden relative to earnings, and limited profitability as measured by return on equity. The share price’s position below all major moving averages further emphasises the current downtrend.
While the broader market index maintains a generally bullish posture, Unichem Laboratories’ share price trajectory diverges, reflecting company-specific challenges within the Pharmaceuticals & Biotechnology sector.
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