The ACME Laboratories valuation report: fair value BDT 64.9–137 (Oct 2026)

Thesis: ACME's fair value range is BDT 65–137 (base 105); growth is real, but BDT 24.8bn of debt eats most of it

The ACME Laboratories Ltd. (DSE: ACMELAB) is one of Bangladesh's older branded-generic drug makers, founded in 1954 and listed in 2016 [2 p.42] [2 p.54]. It sells human medicines (tablets, capsules, syrups, injections, inhalers, eye drops and infusions), veterinary medicines (bolus, premix, water-soluble powder, injections) and a herbal and Ayurvedic range to Bangladeshi doctors, pharmacies and farmers, and it exports to regulated and semi-regulated markets [2 p.199]. Revenue grew from BDT 13.6bn in FY2017 to BDT 35.9bn in FY2025, a 12.9% compound rate [5 p.5] [2 p.56]. Earnings per share grew far more slowly, from BDT 6.61 to BDT 11.48 (7.1% a year), because ACME financed its plants with bank debt: finance cost was BDT 3,269m in FY2025, 48% of operating profit [2 p.167].

The latest period we use is FY2026 (year to 30-Jun-2026). The audited FY2026 statements are not yet filed. The board's DSE announcement of 27-Oct-2026 gives EPS of BDT 12.65, NAV per share of BDT 139.37, operating cash flow per share of BDT 20.19 and a 40% cash dividend (BDT 4.00) [1]; these are labelled "DSE announcement, audited statements not yet filed" throughout. Line items for FY2026 are our estimate built on the 9M interim to March 2026 [3 p.3]. The model will be updated when the FY2026 annual report is filed.

• Domestic demand carries the business. Domestic net sales were BDT 33,492m in FY2025 (+11.1%), 93% of revenue [2 p.199], in a market that IQVIA put at US$3.37bn, growing 12.4% [10 p.21]. Nine-month FY2026 revenue rose 15.6% [3 p.3]. We forecast 11% domestic growth in FY2027F, fading to 10%.
• Exports are small but fast. Exports rose 37.7% to BDT 2,444m in FY2025 (6.8% of sales) after USFDA, UK MHRA and WHO-PQ approvals [2 p.42]. LDC graduation removes the export cash incentive (BDT 95m in FY2025) [2 p.202].
• Debt is the swing factor. Borrowings were BDT 24.8bn at Jun-2025 and BDT 23.7bn at Mar-2026 [3 p.2]. Every 150bp on the interest rate moves fair value by about BDT 15 a share; it is the largest single driver in our tornado.
• Returns are below the cost of equity. ROE was 9.4%–10.2% in FY2022–FY2026E against a 16.7% cost of equity. The stock trades at 0.56x NAV and 6.2x FY2026 EPS [11].
• Valuation. DCF BDT 119 (WACC 12.1%, g 6%) weighted 75%, justified P/B 0.56x on NAV excluding revaluation BDT 63 weighted 25%: base BDT 105, range BDT 65–137. The peer P/E (BDT 132) is context only. The price of BDT 77.9 sits inside the range, below the base.

ACME sells 93% of its revenue at home; the Sinha family runs it, with a new MD since Aug-2026

ACME began as a proprietorship in 1954, became a private limited company in 1976 and a public limited company in 2011 [3 p.6]. It listed on the Dhaka and Chittagong exchanges in 2016, issuing 50 million shares and raising BDT 409.6 crore including premium; the money was fully spent by January 2022 [2 p.54]. Paid-up capital is BDT 2,116m in 211.6 million shares [3 p.7]. It reports a single operating segment and has no listed subsidiary, so its standalone statements are the whole company [4 p.24]. Sum-of-the-parts does not apply: there is no subsidiary or associate of any size.

The business is a classic Bangladeshi branded-generic model. A large field force calls on doctors; the company's key brands are Monas, Maxima, Ecosporin, FIX-A, Coralex, TPC, Famiclav, DDR, Orthogen and Lino [2 p.42]. Selling, marketing and distribution cost BDT 6,844m in FY2025, of which field-force salaries and allowances were BDT 5,156m (+20.6%) [2 p.203]. In FY2025 ACME launched 54 new products, five of them first in Bangladesh [2 p.42].

Management changed in 2026. The founder-MD Mizanur Rahman Sinha died on 16-May-2026; his 8.574 million shares passed to his daughter Tasneem Sinha (then deputy MD) and son Tanveer Sinha, and the board appointed Ms Sinha MD from 10-Aug-2026 [1]. In March 2026 a sponsor gifted 0.74 million shares within the family [1]. We see no change in strategy announced so far; the first annual report under the new MD will be the FY2026 report due before the 22-Dec-2026 AGM.

Capital actions in the last 24 months. There was no rights issue, bonus share or placement. Dividends were cash only: 35% for FY2025 and 40% for FY2026 (record date 18-Nov-2026) [1]. On 26-Oct-2026 the board approved a revaluation of plant and equipment by an independent valuer, adding BDT 803.2m net to fixed assets at 30-Jun-2026 [1]; this lifts NAV but not earnings or cash. We found no pharma-specific BSEC or DGDA rule capping dividends.

The asset base is large for the revenue. Fixed assets were BDT 32.8bn at Jun-2025 against revenue of BDT 35.9bn, an asset turn of 1.09x, because ACME has built new dosage-form units, an API plant and a revalued land bank over the decade [2 p.166]. Depreciation rose to BDT 1,872m in FY2025 from BDT 1,587m. The heavy build-out explains both the debt and why returns lag: the plants were financed before they were full.

Domestic sales grew 11.1% in FY2025 in a market growing about 12%; we forecast 11% for FY2027F

Bangladesh's pharmaceutical market is mostly local branded generics. IQVIA data quoted by Square Pharmaceuticals put the domestic market at US$3.37bn in the year to June 2025, up 12.4%; local makers meet about 98% of demand, but the industry still imports nearly 90% of its active ingredients [10 p.21]. Growth comes from rising incomes, more diagnosis of chronic disease (diabetes, heart disease) and new launches. The seven largest companies grew revenue about 9.4% in the first half of FY2025 [10 p.21].

ACME's domestic gross sales were BDT 38.9bn in FY2025 before BDT 5.4bn of VAT, so domestic net sales were BDT 33,492m, up 11.1% [2 p.199]. The company does not publish its IQVIA share or rank in the documents we read. As a rough scale check only, its gross domestic sales equal about 9–10% of the IQVIA market value at around BDT 120 per US$; this is our arithmetic, not a market-share statistic, and IQVIA measures at a different price point. We treat the share and rank as a gap.

Growth accelerated in FY2026. Nine-month revenue rose 15.6% to BDT 30,463m and third-quarter revenue rose 12.8% [3 p.3]. Our FY2026E revenue is BDT 41,435m (+15.3%), with the fourth quarter growing at the same 14.5% as domestic sales. The audited figure may differ; we will replace it when filed.

How much of the growth is price and how much is volume is not disclosed. Prices of the essential-drug list are set by the Directorate General of Drug Administration (DGDA), and other products need DGDA approval for a price change. The volume tables in the annual report show the scale: ACME sold 6.83 billion tablets, 909 million capsules and 107 million dry-powder inhaler units in FY2025, plus 680 million veterinary boluses and 71 million herbal tablets and capsules [2 p.199]. The report gives no prior-year volume table in the pages we read, so we cannot split price from volume.

Competition is concentrated at the top. Square alone reports a market share of about 17.4% and consolidated turnover of BDT 76.3bn in FY2025, roughly twice ACME's revenue [10 p.5]; listed rivals include Beximco, Renata and Beacon (see the peer table). ACME competes on doctor coverage and brand loyalty, through long-standing brands such as Monas and Maxima [2 p.42]. The chairman's message credits FY2025 growth to better doctor coverage, stronger penetration among top prescribers and a more efficient sales team [2 p.40]. We do not assume share gains: the extra selling cost of FY2026 (20.2% of sales in 9M, up from 18.9%) bought growth that we expect to normalise.

Veterinary and herbal products add diversity. ACME is a sizable animal-health maker (bolus, premix, water-soluble powder and injections) and launched its first veterinary vaccine, against lumpy skin disease in cattle, in FY2025 [2 p.40] [2 p.199]. The herbal and Ayurvedic line is small. The filings do not split revenue between human, veterinary and herbal, so we model one domestic line; the human-medicine share is the large majority on the volume tables.

Our base case grows domestic net sales 11.0% in FY2027F, 10.5% in FY2028F and 10.0% in FY2029F: in line with an IQVIA market growing about 10–12% and below FY2026's pace, because the new MD and the cost of debt argue against buying share with extra promotion. The bear case is 7% a year (a DGDA price freeze, share loss to larger rivals); the bull case 13%, 12.5% and 12%. Each 2pp a year on domestic growth moves fair value by about BDT 7.

Exports are 6.8% of sales and grew 38% in FY2025; regulated approvals set the ceiling

ACME exported BDT 2,444m in FY2025, up from BDT 1,775m, a 37.7% rise in taka terms despite political and economic disruption in two key markets, Myanmar and Sri Lanka [2 p.42] [2 p.199]. In the same year it secured approvals from the US FDA, the UK MHRA and the WHO prequalification unit, and it has contract-manufacturing agreements with generic companies in the US and the UK [2 p.40] [2 p.42]. Export receivables were BDT 342m at March 2026 [3 p.6].

Exports earn a cash incentive while Bangladesh is a least-developed country: BDT 95.4m in FY2025, down from BDT 195.6m [2 p.202]. Graduation in November 2026 ends it, so we set other income at -0.2% of revenue (FX losses and other items) with no incentive. We forecast export growth in US dollars of 20%, 18% and 15% for FY2027–29F, plus a 3% a year weaker taka, giving exports of BDT 5,376m (9.4% of sales) in FY2029F. The bear case is 5% a year; the bull case 28%, 25% and 20%. Because exports are small, the swing is only about BDT 4 a share either way.

The approvals matter more than the current numbers. A USFDA- and MHRA-inspected site lets ACME bid for contract manufacturing and supply generics in regulated markets at better prices than in Asian and African markets, and it raises the plant's standards for domestic products too. The risk is cost: regulated-market registration and compliance add selling and factory cost before revenue arrives (export expenses and foreign registration were BDT 143m in FY2025) [2 p.203]. Export revenue also earns dollars, a natural partial hedge for imported APIs, but at 6.8% of sales it covers only a small part of an estimated BDT 10.7bn of import-linked materials.

Gross margin is 41.7% in FY2026E; materials are 43% of sales, so a 10% weaker taka costs about 2.1pp

Gross margin rose from 41.5% in FY2024 to 42.3% in FY2025 as cost of goods sold fell to 57.75% of revenue [2 p.54], then slipped to 41.4% in 9M FY2026 and 40.9% in the March quarter [3 p.3]. Over ten years it has drifted down from 40.8% in FY2017 to the low 40s, with the low point of 38.3% in FY2020 [4 p.9]. Materials consumed were BDT 15,296m in FY2025: raw materials BDT 10,163m and packing BDT 4,868m [2 p.200], 42.6% of revenue.

Most active ingredients are imported, and the industry imports nearly 90% [10 p.21]; ACME does not disclose its own share. We assume 70% of materials cost moves with the US dollar and global API prices, and that only 30% of a cost shock can be passed to prices because DGDA controls essential-drug prices. On those assumptions a 10% weaker taka costs about 2.1pp of gross margin in the year it happens. The FX/API grid in the valuation section shows FY2027F EPS falling from BDT 15.20 to BDT 5.21 if the taka falls 10% and APIs rise 20%.

Backward integration is the margin lever. ACME's API plant has begun commercial production of three molecules, with four to five more planned, and the government's API park at Gazaria has allocated 42 plots to 28 drug makers [2 p.54] [2 p.67]. A new solid-dosage plant (Unit-7) is due in 2026 [2 p.42]. We add 0.2pp a year to base gross margin for own API (41.2%, 41.4%, 41.6%), starting below FY2025 because the March 2026 quarter was weaker. Each 1pp of base gross margin is worth about BDT 5 a share.

Energy is the other cost pressure: fuel and electricity in factory overhead rose 45% to BDT 961m in FY2025 while gas fell to BDT 234m, a sign of switching from gas to grid power and diesel [2 p.202]. Selling cost rose from 18.8% to 19.0% of revenue in FY2025 and to 20.2% in 9M FY2026 [3 p.3]; we keep it at 20.4%. Capacity and utilisation by dosage form are not disclosed.

Fixed-asset spending drives depreciation, which sits mostly in cost of sales (BDT 1,544m of the FY2025 total of BDT 1,872m) [2 p.202]. We charge 6.4% of opening fixed assets a year, close to FY2026E, giving BDT 2,170m in FY2027F. Capex of BDT 2,800m in FY2027F and BDT 2,600m a year after finishes Unit-7 and the API lines and then runs at about 5% of sales, a little above depreciation, so fixed assets grow slowly and the asset turn improves from 1.22x to 1.62x by FY2029F.

LDC graduation in Nov-2026 ends the export incentive now; the TRIPS waiver runs to 2033, so patent risk is a FY2030s tail

Three policy items move ACME's lines. First, LDC graduation (November 2026) removes export cash incentives; we model this as zero incentive from FY2027 (other income line). Second, the WTO TRIPS pharmaceutical waiver for LDCs lets local firms make patented molecules without licences until 2033 [10 p.22]; after graduation some of these flexibilities phase out [10 p.21]. ACME does not disclose how much of its revenue comes from molecules still under patent abroad. Third, DGDA controls prices of essential drugs and approves other price changes, which limits pass-through of FX and API cost increases (gross-margin line).

The annual budget is the fourth policy lever. VAT is charged on domestic sales at the manufacturing stage (BDT 5.4bn on BDT 38.9bn of gross domestic sales in FY2025, about 14%) [2 p.199], so a change in the VAT rate or in the tariff value of medicines moves net revenue directly. Corporate tax and the 4.76% WPPF charge set the gap between operating profit and EPS. Energy policy matters too: the switch from gas to grid electricity and diesel added about BDT 160m of net factory cost in FY2025 [2 p.202]. We keep today's VAT, tax and energy settings in the base case; the June 2027 budget is a dated catalyst.

We show the TRIPS risk as a one-way test rather than in the base case: if domestic growth fell to 3% in FY2029F as patented products are withdrawn, fair value would fall by about BDT 13 a share. That is small because the hit is late and the DCF already fades growth; a larger and earlier loss of patented products would be a bigger risk, and it is a gap in the disclosures.

Finance cost took 48% of FY2025 operating profit; operating cash flow covered profit 1.6x in FY2026

ACME's earnings are all operating: it holds only BDT 30m of listed shares and BDT 115m of term deposits [2 p.166], so there is no treasury income to strip out. The quality issue is the other way round: finance cost. It rose from BDT 1,016m in FY2017 to BDT 3,269m in FY2025, taking 31% of operating profit in FY2017 and 48% in FY2025 [5 p.5] [2 p.167]. Borrowings were BDT 24.8bn at Jun-2025: BDT 15.6bn of short-term loans and overdrafts, BDT 2.1bn current maturity and BDT 7.1bn of long-term loans [2 p.166]. In 9M FY2026 finance cost fell 4.2% as overdrafts were cut by BDT 938m [3 p.5].

Cash conversion has improved. Operating cash flow was BDT 1,955m in FY2024 (0.8x profit), BDT 3,183m in FY2025 (1.3x) [2 p.169], and BDT 4,186m in 9M FY2026 against BDT 1,643m a year earlier, helped by higher collections and lower material purchases [3 p.5] [1]. The DSE-announced FY2026 figure of BDT 20.19 a share means BDT 4,272m, 1.6x profit. Working capital is the drag: inventories plus materials in transit were 221 days of cost of sales at Jun-2025 (232 at Jun-2024), receivables 37 days and trade payables only 9 days [2 p.166].

The dividend is affordable. Cash dividends per share were BDT 3.50 for FY2017–19 [6 p.40] [4 p.39], 25% (BDT 529m) for FY2020 [7 p.36], 25% for FY2021, 30% for FY2022, 33% for FY2023 [9 p.68] [8 p.197], 35% for FY2024 and FY2025 [2 p.56] and 40% (BDT 4.00) for FY2026 [1]: a payout of roughly 30–53% and a 5.1% yield at today's price. The FY2026 dividend costs BDT 846m against BDT 4,272m of operating cash flow. We keep a 32% payout; dividends then rise with EPS to BDT 7.11 in FY2029F.

The FY2025 auditor is Pinaki & Company; revenue recognition is one of its key audit matters [2 p.161]. Related-party transactions are disclosed in note 40 and described as arm's length [2 p.54]; we did not find related-party balances large enough to change the valuation.

The debt mix is a refinancing risk. About BDT 15.6bn of the Jun-2025 borrowings were short-term loans and overdrafts that roll over within a year [2 p.166], and the FY2019 notes show a long list of bank and non-bank lenders, from Trust Bank and Dutch-Bangla Bank to IDLC and LankaBangla [6 p.40]. Short-term rates track Bangladesh Bank's policy rate, so finance cost responds quickly when rates move, in both directions. In 9M FY2026 ACME repaid BDT 938m of overdrafts and BDT 212m of term loans from operating cash [3 p.5]; we assume (no plan disclosed) BDT 300m a year of net repayment from FY2028F.

We forecast EPS of BDT 15.20, 18.58 and 22.23 for FY2027–29F, a 20.7% a year rise as interest falls behind sales

Our forecast starts from FY2026E: revenue BDT 41,435m, gross margin 41.7%, finance cost BDT 2,983m and profit BDT 2,677m, the last fixed to the DSE-announced EPS of BDT 12.65 [1]. Each line is built from the 9M interim plus a fourth quarter driven by the FY2025 fourth quarter and domestic growth; other income is the 9M figure (BDT -43.8m) with no fourth-quarter items assumed, and tax is at the 9M rate of 26.1% [3 p.3]. Built up this way, profit would be BDT 2,893m; the remaining BDT -216m (BDT -1.02 a share) is shown as an explicit line, "residual vs DSE-announced profit", in the income statement. It is most likely year-end provisions, FX or a tax true-up, but we cannot name it until the audited statements are filed, so it is not carried forward. From FY2027F we model other income at -0.2% of revenue, the FY2024–25 average.

Revenue grows 11.9% in FY2027F to BDT 46,373m and reaches BDT 57,204m in FY2029F. Operating profit rises from BDT 7,091m to BDT 9,496m, a margin of 17.1% rising to 16.6% on the API gain. Finance cost falls slowly, from BDT 2,983m to BDT 2,685m, as rates ease and, by our assumption (no repayment plan is disclosed), debt is repaid by BDT 300m a year from FY2028F. Because interest is fixed in money terms while sales grow, profit before tax grows faster than sales: EPS rises 20.2% in FY2027F. Nine-month FY2026 EPS grew 13.5% and the March quarter 17.4% [1], so the FY2027F step is above the recent pace mainly because the FY2026 fourth-quarter one-off is not repeated.

Cash flow follows the same drivers. Working capital at 47% of sales absorbs BDT 2,272m in FY2027F, so operating cash flow dips to BDT 3,114m from FY2026's BDT 4,272m before rising again. After capex of BDT 2.6–2.8bn and dividends, cash stays between BDT 0.8bn and BDT 1.0bn with debt at BDT 22.7bn in FY2029F. ROE rises from 9.5% to 12.9% as interest shrinks relative to profit; that is above the FY2022–26 range of 9.4%–10.2%, so in the valuation the return on new capital fades to 10% and the P/B leg uses a 12% ROE on equity ex revaluation.

Taxes and quarters. We use a 27.5% effective tax rate (FY2025 27.7%, 9M FY2026 26.1%) and the 4.76% WPPF charge. The quarterly sheet splits FY2027F on FY2025 seasonality: the first half carries about 48% of revenue, the third quarter 26% and the fourth 27%. The third quarter of FY2026 showed gross margin of 40.9% (FY2025 same quarter 42.7%) but profit up 17% as finance cost fell 15% [3 p.3]; that pattern of weaker gross margin offset by lower interest is what our FY2027F assumes.

Fair value range BDT 65–137: DCF 119 (75%), justified P/B 63 (25%); 62% of EV is terminal

DCF (60%). We discount free cash flow to the firm for FY2027–29F, then fade growth, operating margin and reinvestment over FY2030–34 to the terminal year. The cost of equity is 16.72%: the 10-year Treasury bond cut-off of 9.268% (25-Oct-2026) [13] plus a beta of 0.99 (Blume-adjusted; raw 0.99 from 104 weekly returns against the DSEX, correlation 0.74; the F07 floor of 0.6 does not bind) times a 7.5% equity risk premium [11]. The pre-tax cost of debt is 12.25%, against a bank-system average lending rate of 12.13% [14]. At market value, debt is 59% of capital, so WACC is 12.12%. Terminal growth is 6% in taka, the terminal operating margin 17.5% (FY2024 17.8%, FY2025 18.9%, FY2017–20 20–24%), and the return on new capital 10%, so terminal reinvestment is 60% of NOPAT.

Enterprise value is BDT 46.8bn; 62% of it is the terminal value. Net debt including leases, less cash, deposits and listed shares, is BDT 21.7bn at Jun-2026E, so equity is BDT 25.1bn or BDT 119 a share. Debt takes 46% of the enterprise value, which is why small changes in operating value move the equity a lot. Because the return on new capital (10%) is below the WACC, faster terminal growth lowers value: at 7% growth the DCF is BDT 103, at 5% it is BDT 129. The price of BDT 77.9 implies a WACC of 13.6%.

Peer P/E (context, weight 0). Large DSE drug makers trade at screener trailing P/Es of 7.41x (Beximco), 7.49x (Square), 13.41x (Renata) and 14.70x (Beacon); median 10.45x [12]. These are not rebuilt from the peers' filings, and the peers are almost debt-free, so we do not use them as a valuation leg; on ACME's FY2026 EPS the median would give BDT 132. ACME's own June P/E was 6.0–9.9x in FY2021–26 (FY2023 was a floor-price year). The justified P/E from ACME's own returns is (1 − g/ROE)(1 + g)/(Ke − g) = 4.9x (ROE 12% ex revaluation; 4.0x on the reported 10% ROE), or BDT 63 on FY2026 EPS. It is the same answer as the P/B leg in a different form (P/B = ROE x P/E), and it shows why the market pays only 6.2x: returns below the cost of equity justify a low multiple, and peers' 7–15x reflect debt-free balance sheets and higher ROEs.

Justified P/B (25%). We put ROE and book on the same basis by removing the revaluation surplus (BDT 5,685m at Jun-2026E, including the new BDT 803m), which earns nothing in profit. On that basis ROE was 11.6%–13.4% in FY2022–26 (median 12.8%) against 9.4%–10.2% on reported equity. A sustainable ROE of 12% with 6% growth and a 16.7% cost of equity is worth (ROE − g)/(Ke − g) = 0.56x book, payout 1 − g/ROE = 50%. On NAV ex revaluation of BDT 112.51 that is BDT 63. Bear uses ROE 11% and g 5.5%, bull 13% and 6.5%.

Weights and reconciliation. We weight DCF 75% and P/B 25%. The DCF carries debt, working capital, capex and the falling interest burden explicitly; the P/B leg anchors the equity return. The F07 default (50/25/25 with P/E and EV/EBITDA) does not fit: the only P/E evidence on the same basis is the justified P/E, already in the P/B leg, and peers' EV/EBITDA (median 6.60x) says nothing about a company whose net debt is 46% of EV. The DCF (BDT 119) is BDT 56 above the P/B leg (BDT 63). The gap is the funding mix: the DCF lets debt costing 8.9% after tax fund 59% of capital at a 12.1% WACC, while the P/B leg charges the 16.7% cost of equity on all of book. Each leg is a valid view; if debt were refinanced at equity cost the DCF would fall toward the P/B. The base of BDT 105 implies 8.3x FY2026 EPS, 6.9x FY2027F EPS and 0.75x reported NAV. The probability-weighted value is BDT 103.

Against ACME's own history. The normalised inputs sit inside the company's record. Sustainable ROE of 12% on equity ex revaluation sits below the FY2022–26 median of 12.8%, as returns have been falling. The terminal EBIT margin of 17.5% is below the FY2017–20 range of 20–24% and close to FY2024–26 (16.4–18.9%), because selling and energy costs have risen structurally. Terminal reinvestment of 60% of NOPAT is g / return on new capital = 6% / 10%, an unlevered return on all invested capital, close to ACME's FY2025 ROIC of about 9.4%. Levered with debt about equal to equity ex revaluation at an 8.9% after-tax cost, a 10% return on capital gives an ROE of about 11%, close to the 12% used in the P/B leg (FY2022–26 range 11.6–13.4%), so the DCF's higher value comes from debt being cheaper than equity, not from better returns. The base value is 8.3x FY2026 EPS against ACME's own June P/E median of 6.5x (excluding the FY2023 floor-price year).

Scenarios. Bear (25%): domestic growth 7%, exports +5%, a 10% extra taka fall and 10% dearer APIs in FY2027 (recovered through prices from FY2028), selling cost +1pp, interest +150bp, terminal margin 16.5%, g 5.5%, ROE 9%, lowest peer P/E: BDT 65. Bull (25%): domestic 13–12%, exports +28–20%, 3% stronger taka and cheaper APIs, selling cost −0.5pp, interest −100bp, terminal margin 18.5%, g 6.5%, ROE 11%, second-highest peer P/E: BDT 137. Terminal margins of 16.5–18.5% and ROEs of 9–11% sit inside or near ACME's own ten-year record.

Risks: a 150bp higher interest rate costs BDT 15 a share; a weaker taka hits FY2027F EPS hardest

Each risk below is run through the model on its own, at the same size as in the bear case, so its effect on fair value is comparable. The interest rate is the largest single value risk because debt is 46% of enterprise value. The taka and API prices are the largest earnings risk: the bear-sized shock cuts FY2027F EPS to BDT 8.71 from 15.20, but because we assume prices catch up from FY2028 it moves fair value only BDT 4. A lasting shock would cost more.

• Interest rates (finance cost). Mechanism: short-term loans reprice with the policy rate. Effect: +150bp is BDT -15/share. Signal: BB policy rate, call-money rate (9.24% on 29-Oct-2026). Mitigant: cash flow now repays overdrafts.
• Taka and API prices (gross margin). Mechanism: ~70% of materials import-linked, 30% passed through. Effect: bear shock cuts FY2027F EPS to BDT 8.71; fair value BDT -4. Signal: BB exchange rate, LC margins. Mitigant: own API plant, export dollars.
• Domestic demand and DGDA (domestic sales). Mechanism: price freeze or share loss. Effect: 7% growth is BDT -11/share. Signal: quarterly revenue growth below 10%. Mitigant: 54 launches a year.
• Selling cost (S&D). Mechanism: field-force pay and promotion. Effect: +1pp is BDT -5/share. Signal: 9M S&D ratio above 21%.
• Exports and LDC (export sales, other income). Effect: 5% growth is BDT -4/share. Signal: export receivables and new US/UK contracts.
• Terminal margin (DCF). Effect: 16.5% instead of 17.5% is BDT -7/share.
• TRIPS (domestic sales, FY2030s). Effect: 3% domestic growth in FY2029F is BDT -13/share; exposure not disclosed.

Positive risks mirror these: lower policy rates as inflation eases, faster API substitution, and export approvals turning into US and UK supply contracts. Governance is a watch point after the founder-MD's death: the first annual report and AGM under the new MD (22-Dec-2026) will show whether capital allocation changes, for example faster debt repayment or a higher payout.

Dated catalysts: record date 18-Nov-2026 and AGM 22-Dec-2026 (FY2026 annual report with audited statements); 1Q FY2027 results around end-Oct/Nov-2026; H1 results around end-Jan-2027; the June 2027 budget (VAT and tax); LDC graduation in Nov-2026; any DGDA price circular.

What to watch. (1) Gross margin in each quarter against our 41.2% FY2027F base. (2) Borrowings against BDT 23.3bn at Jun-2027F and the interest rate paid. (3) Inventory days against 221 at Jun-2025. (4) Export growth after the approvals. (5) Commercial output from the API plant and Unit-7. (6) The FY2026 audited profit against the DSE-announced BDT 12.65 EPS.

Appendix: ten-year history and the full model, BD statement layout

Statements follow the Bangladeshi layout (statement of profit or loss, financial position, cash flows by the direct method). FY2017–20 come from the audited statements [5 p.5] [4 p.9], FY2021–25 from the five-year table and the FY2025 statements [2 p.56] [2 p.166], and FY2026 from the DSE announcement plus our estimates [1].

FAQ

What is ACME Laboratories' fair value?

Our fair value range is BDT 65–137 a share with a base of BDT 105, from a DCF (75%) and a justified P/B on NAV excluding revaluation (25%). The price was BDT 77.9 on 29-Oct-2026.

What did ACME earn in FY2026?

The board announced EPS of BDT 12.65 (FY2025: 11.48), NAV per share of BDT 139.37 and operating cash flow per share of BDT 20.19 on 27-Oct-2026, with a 40% cash dividend. The audited statements are not yet filed.

Why does ACME trade below book value?

Its ROE has been 9.4–10.2% for five years, below a cost of equity of about 17%, mainly because finance cost on about BDT 23–25bn of borrowings takes 40–50% of operating profit.

How exposed is ACME to the taka and API prices?

Materials are about 43% of revenue and most active ingredients are imported. On our assumptions a 10% weaker taka with 20% dearer APIs would cut FY2027F EPS from BDT 15.20 to BDT 5.21.

Does LDC graduation hurt ACME?

It ends the export cash incentive (BDT 95m in FY2025) from FY2027. The TRIPS patent waiver lasts to 2033, so patent risk is later; ACME does not disclose its exposure.

What dividend does ACME pay?

BDT 4.00 a share (40%) for FY2026, a 5.1% yield at BDT 77.9; it paid 25–35% (BDT 2.50–3.50) for FY2020–25.

Sources

1. DSE news archive, ACMELAB, Nov-2024 to Oct-2026: FY2026 results and 40% cash dividend (27-Oct-2026), PPE revaluation (27-Oct-2026), quarterly results, MD succession · link · accessed 2026-10-31
2. The ACME Laboratories Ltd. Annual Report 2024-25 (FY2025, year to 30-Jun-2025): directors' report, MD's message, audited statements and notes · link · accessed 2026-10-31
3. The ACME Laboratories Ltd. un-audited interim statements, 9M to 31-Mar-2026 (3Q FY2026) · link · accessed 2026-10-31
4. The ACME Laboratories Ltd. audited financial statements FY2020 (year to 30-Jun-2020, with FY2019 comparatives) · link · accessed 2026-10-31
5. The ACME Laboratories Ltd. audited financial statements FY2018 (year to 30-Jun-2018, with FY2017 comparatives) · link · accessed 2026-10-31
6. The ACME Laboratories Ltd. audited financial statements FY2019 (notes: dividends, borrowings) · link · accessed 2026-10-31
7. The ACME Laboratories Ltd. audited financial statements FY2021 (dividend note) · link · accessed 2026-10-31
8. The ACME Laboratories Ltd. Annual Report 2023-24 (FY2024): statements (FY2023 comparatives), unclaimed-dividend note · link · accessed 2026-10-31
9. The ACME Laboratories Ltd. Annual Report 2021-22 (FY2022): directors' report and statements (FY2021 comparatives) · link · accessed 2026-10-31
10. Square Pharmaceuticals PLC Annual Report FY2025, directors' report (IQVIA market size and growth, API import dependence, TRIPS) · link · accessed 2026-10-31
11. AnalystBro price data (TradingView feed): ACMELAB daily and weekly bars, DSEX weekly, to 29-Oct-2026 · link · accessed 2026-10-31
12. AnalystBro screener: large DSE pharmaceutical stocks (P/E, P/B, EV/EBITDA TTM, dividend yield), close 29-Oct-2026 · link · accessed 2026-10-31
13. Bangladesh Bank treasury auctions: 10-year bond cut-off yield 9.268%, 25-Oct-2026 · link · accessed 2026-10-31
14. Bangladesh Bank, Scheduled Banks Statistics Apr-Jun 2026, Table-102: weighted average lending rate 12.13% · link · accessed 2026-10-31
15. AnalystBro model: model.xlsx for this report (workbook tabs below) · accessed 2026-10-31