1. At a Glance – The “Wait, What Just Happened?” Quarter
Unichem Laboratories just pulled off one of those quarters that makes Excel sheets blink twice. Reported Q3 FY26 PAT of ₹264 Cr, a number so large compared to its usual self that even long-term shareholders checked if the decimal was misplaced. Spoiler: it wasn’t. This wasn’t a miracle turnaround driven by blockbuster drugs or US price hikes — it was powered by a ₹275.5 Cr exceptional gain from land sale. Remove the sugar rush, and the operating reality looks… well, very Unichem.
At ₹397 per share, the stock is down 41% over 1 year, market cap sits at ₹2,794 Cr, and valuation stands at 26.6x P/E despite ROCE of just 6.24%. Formulations now contribute ~92% of revenue, the US accounts for ~61% of sales, and the company is freshly under new management control with IPCA Laboratories holding 52.7% stake.
This is a pharma company in transition — ownership changed, balance sheet cleaned, legacy litigation settled, but operational engine still warming up. Is this a comeback story or just accounting theatre? Let’s open the case file. 🕵️♂️
2. Introduction – From Sleepy Pharma to IPCA’s Side Project
Unichem used to be that well-known but underperforming mid-cap pharma — respected brands, decent R&D pedigree, but returns that never quite justified the effort. Between FY18–FY23, shareholders endured weak margins, erratic profits, and a business that looked stuck between “regulated-market ambition” and “India-branded generics reality”.
Then came August–September 2023.
Promoter Dr. Prakash A. Mody sold control to IPCA Laboratories, one of India’s most aggressive API-heavy pharma players. By June 2024, IPCA owned 52.7%, effectively turning Unichem into a strategic arm rather than an independent empire.
FY24–FY26 is therefore not about growth fireworks — it’s about:
- Cleaning legacy mess (EU fines, asset monetisation)
- Resetting manufacturing
- and API strategy
- Integrating with IPCA’s cost and distribution muscle
But markets are impatient. They don’t clap for restructuring PowerPoints. They want margins, cash flows, and ROCE. So far, Unichem has delivered… paperwork profits.
The real question: Is the boring phase almost over, or is this the new normal?
3. Business Model – WTF Do They Even Do?
Unichem is a formulation-first pharma company pretending to be API-integrated.
What they sell:
- Formulations (~92% of revenue FY24)
Branded + non-branded generics across cardiology, diabetology, gastro, CNS, anti-infectives, pain management. - APIs (~8%)
Mostly captive, now being backward-integrated.
Where they sell:
- USA (~61%) – regulated, competitive, price-sensitive, recall-prone.
- India (~2%) – surprisingly tiny for an Indian pharma.
- RoW (~37%) – Brazil, South Africa, emerging markets.
How they operate:
- 3 formulation plants: Goa, Baddi, Ghaziabad
- 3 API plants: Roha, Pithampur, Kolhapur
- R&D centre in Goa with 75+ ANDAs, 77 DMFs
Think of Unichem as a product-heavy, margin-light exporter, now being slowly retooled to fit IPCA’s API-led economics.
Lazy investor summary:
👉 Good assets, average execution, new boss.
4. Financials Overview – The Quarter vs The Reality
Quarterly Comparison Table (₹ Cr)
| Metric | Latest Qtr (Dec FY26) | YoY Qtr (Dec FY25) | Prev Qtr (Sep FY26) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 521 | 533 | 579 | -2.3% | -10.0% |
| EBITDA | 45 | 86 | 66 | -47.7% | -31.8% |
| PAT | 264 | 58 | -12 | +355% | NA |
| EPS (₹) | 37.54 | 8.22 | -1.69 | +357% | NA |
