Alembic Pharmaceuticals Ltd Forensic Report - SOIC x StockScans Report

as of Jul 2026

Alembic Pharmaceuticals carries a multi-year auditor qualification on its books, a ₹1,150 crore impairment that wiped out a capex cycle, and a promoter-controlled board whose re-appointments public institutions have repeatedly opposed. The record is disclosed and audited, but the combination of a contested accounting treatment, volatile cash conversion, and rising contingent exposures means the reader must weigh the numbers against the governance.

Key findings

  1. A ₹1,026 crore reserve withdrawal drew a multi-year auditor qualification Critical - In FY2022-23, the company withdrew ₹1,025.66 crore from General Reserve and booked it as P&L income, a treatment the auditor qualified as not meeting Ind AS income criteria. The Draft Scheme of Arrangement behind the transfer was returned by stock exchanges and abandoned, leaving ₹1,894.29 crore in retained earnings available for distribution. The qualification carried forward into FY2023-24 on comparability of figures.
  2. A ₹1,150 crore CWIP impairment exposed a failed capex cycle, while new acquisitions add contingent payouts Major - In FY2022-23, the company impaired ₹1,150.43 crore of CWIP across three Gujarat facilities, citing US price erosion and FDA delays, with ₹676.87 crore written off and ₹473.56 crore provided for. In FY2025-26, acquisitions of Rigimmune Inc. and a UK R&D entity introduced contingent consideration tied to future milestones.
  3. Operating cash flow is volatile and has not consistently covered capital allocation demands Major - Cumulative CFO of ₹6,316 crore covered only 0.67x of cumulative EBITDA of ₹9,478 crore over the decade through FY26. CFO/PAT collapsed from 2.12x in FY23 to 0.15x in FY25 before recovering to 1.17x in FY26. Short-term borrowings constituted 87% of total debt as of FY26, while dividend per share rose from ₹8 in FY23 to ₹12 recommended for FY26 even as FY25 CFO was only ₹88 crore.
  4. Promoter family holds board control with concentrated pay, while public institutions repeatedly opposed re-appointments Major - Promoter shareholding stood at 69.87% with zero pledge. At the 11th AGM in July 2021, public institutional shareholders voted 61.38% against Mr. Chirayu Amin's re-appointment and 59.15% against Mr. Pranav Amin's. Mr. Chirayu Amin's remuneration rose from ₹4.31 crore in FY21 to ₹14.22 crore in FY26, while the Chairperson and CEO roles remain combined.
  5. Disputed tax demands have escalated to ₹1,039 crore, with additional contingent exposures Major - Disputed tax demands stood at ₹1,039 crore as of FY2024-25, up from nil across all categories in FY2021-22. A writ petition seeks to quash MGVCL supplementary invoices of ₹42.17 crore for a rooftop solar system. Capital commitments not provided for were ₹1,082 crore in FY2024-25.
  6. USFDA inspections have produced recurring observations, culminating in a Warning Letter in July 2026 Major - USFDA issued a Warning Letter dated 10 July 2026 to a Clinical Investigator at Alembic's Bioequivalence Facility regarding an Informed Consent Form observation. Earlier inspections of the Karkhadi injectable facility yielded five observations in FY21 and two in FY26, while the Vadodara bioequivalence facility received one observation in FY25.
  7. The international subsidiary network carries a pattern of dormant and dissolving entities Minor - As of FY2025-26, at least eight entities were dissolved, dissolving, or non-operational, including Genius LLC (Ukraine) and Alembic Mami SPA. Aleor Dermaceuticals Limited, with negative net worth of ₹200.84 crore, was amalgamated into the company in September 2022. The controlling company changed to Nirayu Private Limited effective 9 September 2025.
  8. Revenue recognition for returns is a recurring Key Audit Matter, while receivables are rising faster than revenue Minor - The provision for non-saleable goods returns has been a Key Audit Matter in each of FY22, FY23, and FY24. Receivable days increased from 67.57 in FY23 to 72.87 in FY26, and management acknowledged a working capital build-up driven by not-yet-due receivables without disclosing ageing.

What to watch

Bottom line: This is a disclosed and audited record with a genuine domestic formulations franchise and zero promoter pledge. The risk sits in three places: an accounting treatment that the auditor has qualified for multiple years, a capex cycle that already destroyed ₹1,150 crore of capital, and a governance structure where public institutions have repeatedly voted against the people setting their own pay. Watch the Scheme resolution, the AGM vote, and whether the new CWIP earns its keep.