Alembic Pharmaceuticals Limited Valuation
APLLTD · Healthcare · Current price ₹790
Is Alembic Pharmaceuticals Limited undervalued?
We estimate the fair value of Alembic Pharmaceuticals Limited at ₹553 per share, against a market price of ₹811. That puts the share price about -31.8% above our estimate, at low confidence. This is our view of what the business is worth, not a target price or a forecast of where the share price will go.
How this fair value is calculated
This estimate comes from 2 methods: Discounted cash flow (2-stage) (₹255), Fair multiple (P/E) (₹850). These methods disagree materially, so the estimate is their midpoint rather than a weighted blend, and the disagreement is part of the finding. The full working, including the assumptions and what data was missing, is set out below.
The range around this estimate
Our estimate for Alembic Pharmaceuticals Limited spans ₹276 to ₹850. That range is wide, which is the honest signal here: read the range rather than the single number. A margin of safety means buying meaningfully below the estimate: the wider the range, the more room the assumptions leave for error.
Valuation multiples
Alembic Pharmaceuticals Limited trades at a P/E of 23.0x and a P/B of 2.8x, with a dividend yield of 1.5%. Multiples are most useful compared against the company's own history and its sector peers — see the peer comparison for context.
How we got this fair value
Every number below is part of the same estimate for Alembic Pharmaceuticals Limited. Nothing here is a target price or a forecast of where the share price will go.
The inputs are thin or the models disagree sharply. This is our least reliable kind of estimate, so read the range rather than the single number.
Estimate range ₹276 – ₹850
Why this method for this business
DCF and relative PE are the most appropriate models for a pharmaceutical company like Alembic Pharmaceuticals, which has a durable moat and predictable cash flows.
The models behind the number
These methods disagree materially, so the estimate is their plain midpoint rather than a weighted blend. The disagreement is itself the finding.
Intrinsic value from 2-stage discounted cash flows (primary for asset-light / normal businesses); FCFE path
- ev_ebitda is not used due to lack of clear EV/EBITDA multiples for the sector and the company's unique capital structure.
What was missing
- Lack of analyst coverage for EV/EBITDA multiples
- Limited forward EPS data for certain periods
- Insufficient data on capital allocation efficiency
What drives it
27 inputs, grouped by how strong each claim is
- FCF_0 (normalized)
- 376 ₹cr
- Net debt
- 1,233.6 ₹cr
- Sector-median P/E
- 38.26×
- Peers used
- 42
- EPS (TTM)
- 35.27 ₹/share
- Own-history median P/E
- 27.98×
fcf_norm (median ≤5y positive)
total_debt − cash
peer-median
peer-median
computed
reconstructed (one feature, dampened — not a cap)
- Discount rate (r)
- 13.28%
- Beta
- 0.85
COE (building-block)
bottom-up industry
- Stage-1 start growth
- 5.37%
- Fade shape
- linear
- Terminal growth (g)
- 5.37%
- Stage-1 years
- 9 y
pat_cagr_5y
lifecycle Mature
macro terminal × quality premium
lifecycle Mature horizon
- Lifecycle stage
- Mature
- Quality premium
- 1.075×
- Term: quality
- -7.1%
- Term: growth
- -24.7%
- Term: capital_allocation
- -8.5%
- Term: financial_strength
- +5.8%
- Term: history
- -8.1%
- Term: sector_rerating
- +0.0%
- Term: rate_regime
- +1.2%
- Term: risk
- +0.0%
forecast engine (L20)
moat Narrow + capital allocation
quality 41/100 (weak/erratic returns) → discount
weak ~-2% CAGR (ROCE 22% > hurdle) → discount
capital allocation: falling ROCE / weak cash generation → discount
financial strength: low leverage (D/E 0.2) → mild premium
history: market paid -27% vs sector, dampened ×0.3 (one feature, not the anchor)
sector re-rating: no sector-norm history → not used
rates: risk-free 6.9% below ~7.1% normal → higher multiple
risk: no analyst-dispersion signal available → neutral (lowers confidence, not PE)
- Path
- FCFE
- Terminal-value fraction
- 0.522
- Premium vs sector
- -37.0%
- Fair-multiple confidence
- 83%
- Fair P/E
- 24.1×
computed (D/E vs 0.8)
PV_TV / (PV_1+PV_TV)
fundamentals + macro (not capped at own history)
data completeness + term agreement
sector median × ∏(1+term) — Dynamic Fair Multiple
Who computed this
A language model (qwen3:8b) selects the valuation method and the judgement inputs for Alembic Pharmaceuticals Limited: which models suit the business, the moat, the growth and margin assumptions. It does not produce the number. The fair value itself is computed in Python by a deterministic engine (version 2026.08.1) from those inputs, so the same inputs always give the same result and every figure above can be traced to a source.
Estimated 14 Sept 2026. Re-run as new financials and news arrive.
How we value stocks
We estimate what a business is worth from its own economics: cash flows, returns on capital, and a multiple justified by its quality, rather than from where the share price has been. A fair value estimate is a view, not a verdict, and it is only as good as the inputs listed above.
Read the full fair-value methodologyUnderstand the ratios
More on Alembic Pharmaceuticals Limited
DocStoX estimates are computed from reported financials, for informational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.