ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Aurobindo Pharma's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 8.98%.
As of today (2026-07-13), Aurobindo Pharma's WACC % is 10.82%. Aurobindo Pharma's ROIC % is 8.93% (calculated using TTM income statement data).
Aurobindo Pharma earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Aurobindo Pharma (BOM:524804) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROIC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Aurobindo Pharma's WACC % is 10.82%. Aurobindo Pharma's ROIC % is 8.93% (calculated using TTM income statement data).
Aurobindo Pharma earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Aurobindo Pharma ROIC % Related Terms
Aurobindo Pharma ROIC % Historical Data
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The historical data trend for Aurobindo Pharma's ROIC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Drug Manufacturers - Specialty & Generic subindustry, Aurobindo Pharma's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Aurobindo Pharma ROIC % vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Aurobindo Pharma's ROIC % distribution charts can be found below:
* The bar in red indicates where Aurobindo Pharma's ROIC % falls into.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Aurobindo Pharma (BOM:524804) has a ROIC % of 8.98% as of Mar. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Aurobindo Pharma and its competitors.
Is Aurobindo Pharma's ROIC % too high?
Aurobindo Pharma's current ROIC % is 8.98%. The Drug Manufacturers industry median ROIC % is 4.49. Aurobindo Pharma's value of 8.98% is 100.2% above this industry median. Overall, Aurobindo Pharma has a GF Score™ of 88/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Aurobindo Pharma's ROIC % compare to ZTS and UTHR?
Aurobindo Pharma's ROIC % of 8.98% can be compared against companies in the Drug Manufacturers industry. The industry median ROIC % is 4.49. Aurobindo Pharma's value of 8.98% is 100.2% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for a Drug Manufacturers company?
The median ROIC % among Drug Manufacturers companies is 4.49, based on 990 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Aurobindo Pharma's current ROIC % of 8.98% is 100.2% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Aurobindo Pharma and its competitors. For the Drug Manufacturers industry, the median ROIC % is 4.49 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Aurobindo Pharma's current ROIC % is 8.98%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Aurobindo Pharma stock overvalued right now?
Based on GuruFocus' analysis, Aurobindo Pharma (BOM:524804) is currently considered Modestly Overvalued. The stock's GF Value™ is ₹1,333.66, compared to a current price of ₹1,564.65 — trading 17.3% above its estimated fair value. The current ROIC % is 8.98% and 100.2% above the Drug Manufacturers industry median of 4.49. Aurobindo Pharma's overall GF Score™ is 88/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For Aurobindo Pharma (BOM:524804), the current ROIC % is 8.98% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Aurobindo Pharma (BOM:524804) Overvalued in 2026?
Based on GuruFocus' analysis, Aurobindo Pharma stock appears to be overvalued.
The current stock price of ₹1,564.65 is trading 17.3% above its estimated GF Value™ of ₹1,333.66.
GuruFocus considers Aurobindo Pharma to be Modestly Overvalued.
Key valuation signals for BOM:524804:
ROIC %: 8.98%
GF Value™: ₹1,333.66 vs. price of ₹1,564.65 (17.3% above fair value)
Industry Position: 100.2% above the Drug Manufacturers median
No single metric tells the full story. See the BOM:524804 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Aurobindo Pharma Ltd is a specialty and generic drug manufacturing company. It is principally engaged in the manufacturing and marketing of active pharmaceutical ingredients, generic pharmaceuticals, and related services. Its formulations target key therapeutic areas, including Central Nervous System (CNS), Antibiotics, Anti-diabetics, Cardiovascular, Anti-retroviral, Gastroenterology, Oncology, and Dermatology. The operating and reportable segments of the company are; India, the United States of America, Europe, and the Rest of the World. The company generates a majority of its revenue from its business in the United States of America.
88GF Score
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