Improving fundamentals and stabilizing technical baseline. Base building process active. Valuations remain balanced and supported by current metrics.
SENTINEL REVIEW
Alembic Limited (ALEMBICLTD)•Updated yesterday
🚨 Structural Deterioration Signature: In FY2026, Alembic Limited reported a 2.2% YoY deterioration in PAT to ₹317.4 Cr, compared with ₹310.7 Cr in the prior year, amid severe margin compression and receivables-revenue divergence. Operating efficiency is stabilizing, with EBIT margins falling to 29.7% from 42.6% YoY, though revenue growth decelerated to 5.5% YoY. Operating cash flows remain under pressure, with CFO/PAT at 0.38 and a cash conversion deficit of ₹1.97 Cr, reflecting slowing collections and an expanding operating leverage gap. Despite nominal debt levels, the company faces working-capital strain, with receivable days at 2.0 and a 51.3% divergence between receivables and revenue growth, keeping it under heightened operational surveillance.
- ✓Risk score improved (QoQ change: -3 pts)
- ✓Profitability margins pressure eased (Margin Compression resolved)
- ✗New risk trigger: Receivables-Revenue Divergence (+13 pts)
- ✗Growth expectations are demanding
- ✓Market structure is neutral/stabilizing
- ✗Institutional flow regime is Strong Distribution (-1.12σ)
- ✗Share price is down -18.3% this quarter (from ₹107.23 on 30 Sept to ₹87.59)
- 🔴Review 1 active forensic warning flag for structural stress
- 🟢Margin Compression resolved in latest filing; verify sustainability in next filing
- 🟢Maintain routine quarterly surveillance; no governance escalation required
- 13.0 ptsEarnings Quality
Divergence Radar
Structural Matrix
Risk vs Price TimelineVisualizing the historical relationship between the structural risk score and stock price movement over time.
| Duration | Perf. | Sector Avg | Divergence |
|---|---|---|---|
| 1 Week | -4.79% | -1.37% | -3.42% |
| 1 Month | -18.07% | -6.43% | -11.65% |
| 6 Months | -3.96% | +0.1% | -4.06% |
| 1 Year | -11.37% | -5.02% | -6.35% |
| 2 Year | -27.02% | +35.37% | -62.39% |
| 3 Year | +13.34% | +130.26% | -116.92% |
Business Analysis Methodology
Business analysis focuses on structural risk inside the company. Flagium monitors earnings quality, balance sheet strength, liquidity, governance, competitive position, and growth sustainability to identify areas where risk may be increasing or decreasing before it becomes obvious in reported results.
Financial profile remains stable for now. Pressure is receding in profitability and earnings quality. This indicates that forensic pressure is currently receding. Risk levels are improving.
Risk Score Composition
Investment Risk Thesis
Current risk score has risen from 7 → 13 over 14 quarters.
- Operating profit margins
Risk Drivers (Active Warnings)
Primary Driver & Insights
Working capital cycles are stretching, led by receivables-revenue divergence. This delays cash generation from core operations and locks up liquidity.
Active Risk Objects (3)Free Preview (2 of 3)
ALEMBICLTD: Trade Receivables growth outpaced Revenue by +51.3 pp (DSRI: 2.00x).
Early signs of slowing collections. Monitor for pressure on the cash flow cycle.
Operating margin declined by 12.9 bps YoY for two consecutive quarters.
Operating efficiency is stabilizing. The rate of margin deterioration has slowed.
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Statutory Note: Forensic signals are algorithmic quantitative observations derived from publicly filed XBRL disclosures and do not constitute allegations of legal misconduct or investment recommendations.
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Structural Risk Attribution
Deterministic quarter-on-quarter causal decomposition grounded in statutory exchange filings.
Structural History · Last 12 QuartersHistorical Trajectory (12Q)
Risk improved moderately (-3.0 pts), driven by Margin Compression (-16.2 pts), partially offset by new Receivables-Revenue Divergence (+13.0 pts).
12-Quarter Structural Regimes & Landmark Inflections12Q Structural Regimes & Inflections
Risk deteriorated materially (+16.0 pts), driven by new Margin Compression (+16.2 pts).
Business Resilience & Benchmark Context
Overall: STRONGPEER COMPARISON MATRIX
Ranked surveillance & credit risk comparison against sector peers
Stable
Stable
Stable
Watch
Watch
Watch
* Peer comparison is based on risk signals, not valuation or returns.
Unlock 5-Year Forensic Divergence Cockpit
Access multi-year visual divergence charts (EBITDA vs CFO Cash Gap, Receivables Decoupling Spread, and Debt vs FCF Burn) for Alembic Limited.
FINANCIAL STATEMENTS
Working Capital & Forensic Monitor
Operating Cycle Disclosures·10 Fiscal Years
Working Capital Schedule (INR Cr)
| Metric / Ratio | FY2026 | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | FY2020 | FY2019 | FY2018 | FY2017 |
|---|---|---|---|---|---|---|---|---|---|---|
Trade Receivables(₹ Cr) | 32 | 30 | 20 | 23 | — | — | — | — | — | — |
Inventories(₹ Cr) | 52 | 99 | 93 | 89 | — | — | — | — | — | — |
Trade Payables(₹ Cr) | 24 | 28 | 31 | 17 | — | — | — | — | — | — |
Net Working Capital(₹ Cr) | 60 | 101 | 81 | 95 | — | — | — | — | — | — |
Working Capital / Sales(%) | 19.3% | 34.1% | 38.3% | 49.4% | — | — | — | — | — | — |
Cash Conversion & Operating Cycle (Days)
| Metric / Ratio | FY2026 | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | FY2020 | FY2019 | FY2018 | FY2017 |
|---|---|---|---|---|---|---|---|---|---|---|
Cash Conversion Cycle (CCC)(days) | 70d | 124d | 140d | 181d | — | — | — | — | — | — |
Debtor Days (DSO)(days) | 37d | 37d | 34d | 45d | — | — | — | — | — | — |
Inventory Days (DIO)(days) | 61d | 122d | 159d | 169d | — | — | — | — | — | — |
Creditor Days (DPO)(days) | 28d | 35d | 53d | 33d | — | — | — | — | — | — |
Forensic Accounting Monitor & Divergences
| Metric / Ratio | FY2026 | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | FY2020 | FY2019 | FY2018 | FY2017 |
|---|---|---|---|---|---|---|---|---|---|---|
Receivable Growth vs Sales (Δ)(%) | +1.0% | +11.8% | -26.6% | — | — | — | — | — | — | — |
Inventory Growth vs Sales (Δ)(%) | -52.9% | -32.5% | -6.3% | — | — | — | — | — | — | — |
Asset Growth vs Sales (Δ)(%) | -2.0% | -32.3% | -5.2% | — | — | — | — | — | +31.8% | — |
Earnings-to-Cash Divergence (PAT - CFO)(₹ Cr) | 197 | 224 | 246 | 152 | 240 | — | — | — | 139 | 93 |
Accrual Ratio (Accruals / Avg Assets)(%) | 7.8% | 9.3% | 10.8% | 6.9% | — | — | — | — | 12.9% | 9.4% |
Operating Cash Realisation (CFO / EBITDA)(%) | 80.7% | 55.5% | 22.1% | 39.9% | -18.1% | — | — | — | 218.2% | 742.9% |
Capitalisation Intensity (CWIP / Assets)(%) | — | — | — | — | — | — | — | — | — | — |
Industry Intelligence
Realty KPIs| Operating Driver | Quarter | Current Value | Change (QoQ) | Change (YoY) | Industry Median |
|---|---|---|---|---|---|
| Q1 FY2027 | 91.0% | -250 bps ↓ Profitability contraction | -250 bps ↓ Profitability contraction | 48.5% | |
| Q1 FY2027 | 39.2% | +330 bps ↑ Operating efficiency gains | -420 bps ↓ Profitability contraction | 15.5% | |
| Q1 FY2027 | 0.02x | — → Stable asset efficiency | — → Stable asset efficiency | 1.15x |
Understanding Realty KPIs
Concall & Management Takeaways
No investor earnings call transcripts transcribed for this scrip.
Earnings call intelligence is automatically populated when companies conduct quarterly earnings calls with institutional investors and publish transcripts.
Business quality remains strong.
Current forensic pressure is elevated and improving.
Key risks remain concentrated in growth sustainability and operating leverage.
The structural architecture is currently robust. Capital resilience buffers in earnings quality remain well-maintained against forensic benchmarks. Systematic scans of operational margins and profitability metrics confirm the absence of material structural stress. The current structural trajectory supports a stable risk outlook.
Market Expectation Engine
Investor Translation • What the market price is expecting
Expectation EngineAt the current price of ₹88, the market expects this company to grow its net profits by 28.7% every year for the next 5 years. If you think the company will grow faster than 28.7%, current market prices reflect a discount relative to that growth assumption.
Sentinel Takeaway:The market expects future growth in line with the company's historical delivery. Current market expectations appear balanced relative to the business's track record, representing standard expectation risk.
Using the Discounted Cash Flow (DCF) model, the market is pricing ALEMBICLTD for 28.7% long-term growth versus 15.4% historical delivery. Current expectations appear demanding, and historical fundamentals provide strong support.
Business Delivery Capacity
Performance quality vs historical benchmarksHistorical business performance currently provides robust support for the market's implied growth assumptions. Improvement in revenue growth and operating efficiency would strengthen expectation support.
WHY IS EXPECTATION RISK ELEVATED?
Valuation Context
WHAT MUST HAPPEN FOR CURRENT PRICE TO BE CORRECT?
| Assumption Metric | Required (To justify current price) | Historical Delivery (Average) | Fulfillment Assessment |
|---|---|---|---|
| Revenue Growth (CAGR) | 28.7% | 15.4% | Demanding |
| Operating Margin (EBIT) | 46.6% | 49.4% | Achievable |
| Free Cash Flow Conversion | 55.9% | 42.4% | Aggressive |
*Required metrics indicate the operating efficiency and revenue expansion parameters that must be sustained long-term to justify the current stock price.
The current valuation assumes business performance broadly in line with the company's historical record. Historical operating performance currently provides partial evidence that these expectations are sustainable. Continued stronger profitability would be required to justify current pricing.
Market Structure Methodology
Flagium separates Business Risk from Market Structure. Business analysis explains what is happening inside the company. Market Structure measures how investors are behaving through price trends, momentum, participation, and institutional activity. Divergences between the two often reveal important transitions before they become obvious.
The stock remains in a confirmed Stage 3 distribution phase. Although institutional participation has improved, trend quality remains weakening and momentum is beginning to decay. Current price action does not yet confirm a decisive breakdown or a renewed advance.
What Is Driving Market Structure?
Market structure remains stable, but heavy distribution flows indicate institutional pressure.
Market Cycle Stage Analysis
Stan Weinstein 4-Stage CycleMomentum & Institutional Flow
Methodology & Regulatory Disclaimer
Flagium AI is an automated financial data analytics and research platform providing quantitative risk, forensic, and valuation analytics for informational and educational purposes only. Flagium AI is not registered with SEBI as a Research Analyst or Investment Adviser under SEBI regulations. These analytics do not constitute financial planning, investment advice, or recommendations to buy, sell, or hold any security.
Investments in securities market are subject to market risks. Read all the related documents carefully before investing. Please consult a SEBI-registered Investment Adviser before acting on any data presented.
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