At a Glance
Accretion Pharmaceuticals Ltd is a B2B pharma manufacturer offering tablets, capsules, and third-party formulations for both domestic and global clients. The company just posted a 356% profit growth, 65% ROE, and trades at a P/E of just 11.3x. With improving working capital and big margin expansion — is this India’s next SME breakout?
1. 🧬 Introduction – The Low-Key Compounder Nobody Is Talking About
While the world is busy tracking Sun Pharma’s lawsuits and Divi’s API cycles, Accretion has quietly delivered a ~330% revenue growth and nearly 7x profit in FY25 — all from a humble ₹76 Cr market cap base.
How? Not by reinventing molecules — but by making stuff for people who already did.
2. 🧪 Business Model – WTF Do They Even Do?
👩⚕️ Manufacturing Focus
- Tablets
- Capsules
- Other oral solid dosage forms
🏭 Business Type
- Contract manufacturing
- Third-party manufacturing
- Private label manufacturing
📍 Client Base
- Private pharma companies
- Government contracts (State + Central)
- Institutions (domestic + overseas)
💼 USP: Low-cost, high-quality capacity play for generic pharma. Think of it as India’s Flex for tablets.
3. 💰 Financials – Profit, Margins, ROE, Growth
| Metric | FY25 | YoY Growth |
|---|---|---|
| Revenue | ₹57.4 Cr | 🔼 330% |
| Net Profit | ₹6.8 Cr | 🔼 356% |
| EBITDA Margin | 20.7% | 🔼 ~100 bps |
| ROE | 65.4% | 💣 |
| EPS | ₹8.3 | 🧼 Clean and rising |
🧠 This is SME pharma magic: Low base → high operating leverage → massive ROE explosion.
4. 📈 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹69 |
| P/E | 11.3x |
| ROE | 65.4% |
| Market Cap | ₹76.6 Cr |
| BV | Not reported (approx. ₹17–18 est.) |
🟢 P/E of 11 with 65% ROE in pharma is either a mistake… or your alpha.
🎯 Fair Value Range: ₹90–₹125
Assuming ₹8.5–9.5 FY26E EPS, and 12–14x multiple on FY26 profit, this stock is undervalued relative to SME pharma peers.
5. 🍿 What’s Cooking – News, Triggers, Drama
- 🔥 FY25 revenue crossed ₹57 Cr vs ₹13 Cr last year
- 🔄 Massive drop in working capital cycle from 258 to 148 days
- 🧠 New Independent Director appointed June 2025
- 📩 SEBI clarification sought on results (technical, not fraud)
- 🔬 Entry into institutional orders in FY26 expected
Possible next trigger? USFDA-compliant unit or WHO-GMP certification.
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Item | FY25 |
|---|---|
| Equity | ₹8.17 Cr |
| Reserves | ₹7.12 Cr |
| Borrowings | ₹14.11 Cr |
| Total Liabilities | ₹39.87 Cr |
| Fixed Assets | ₹6.09 Cr |
🟠 Debt to Equity: ~1.1x → manageable, but monitor interest coverage.
They’ve scaled fast — but have also added a bit of debt pressure.
7. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY24 | -₹11.44 Cr | -₹5.48 Cr | ₹17.01 Cr | ₹0.09 Cr |
| FY25 | ₹5.83 Cr | -₹1.61 Cr | -₹4.26 Cr | -₹0.04 Cr |
🟢 Turnaround in operating cash flow = very bullish
🟠 Still investing in capacity → FCF negative, but justified
8. 📐 Ratios – Sexy or Stressy?
| Metric | FY25 | Comments |
|---|---|---|
| ROE | 65.4% | Elite |
| ROCE | 46.4% | Outstanding |
| OPM | 20.7% | Very solid |
| Inventory Days | 188 | Cut from 564 – huge |
| CCC | 193 days | Still long, but halved from 466 |
Accretion’s operations are finally looking “professional” on paper.
9. 💸 P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT |
|---|---|---|---|
| FY24 | ₹13.4 Cr | ₹2.6 Cr | ₹1.49 Cr |
| FY25 | ₹57.4 Cr | ₹11.9 Cr | ₹6.8 Cr |
That’s 4x revenue and 4.5x PAT in one year.
Clearly, operating leverage is very real.
10. 🧪 Peer Comparison – Who Else in the Game?
| Company | P/E | ROE | OPM | Remarks |
|---|---|---|---|---|
| Sun Pharma | 35x | 17% | 28% | Big Cap Giant |
| Divi’s | 83x | 15% | 31% | API Master |
| Accretion | 11x | 65% | 21% | Small but on fire |
Among SME pharma, Accretion beats many on ROE + margin + growth, despite being priced like it’s still in a garage.
11. 🧠 Misc – Shareholding, Promoters, Auditors
- 📈 Promoter Holding: 73.5% – very strong
- 🌎 FIIs: 2.99% – rare in SME
- 📉 Public Float: ~23%
- 🧑⚖️ Board Changes: New ID (Ms. Nishtha Pamnani), May 2025
- ❗ Clarification on results sought by NSE (awaiting update)
The float is small, which could explain the tight trading range.
12. ⚖️ EduInvesting Verdict™
Accretion Pharma is what you get when a SME manufacturer actually delivers and doesn’t just market ayurvedic ashwagandha pills to IPO-bhakts.
✅ Insane ROE
✅ Low P/E
✅ Working capital discipline
✅ Capacity-backed revenue
🟠 No dividend, moderate debt
🚩 NSE asked for a result clarification
Verdict™:
This is “cheap compounding done right.” If numbers hold and orders sustain, Accretion could be the SME breakout no one saw coming.
Edu Tagline™:
“Dilute nahi karte, bas profit inject karte hain.”
✍️ Written by Prashant | 📅 8 July 2025
Tags: Accretion Pharmaceuticals, SME pharma stock, contract manufacturing, third-party pharma, high ROE stocks, pharma multibagger, NSE SME, earnings growth, EduInvesting
