AJANTPHARM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.3
| Stock Code | AJANTPHARM | Market Cap | 35,899 Cr. | Current Price | 2,875 ₹ | High / Low | 3,021 ₹ |
| Stock P/E | 38.1 | Book Value | 330 ₹ | Dividend Yield | 0.97 % | ROCE | 33.0 % |
| ROE | 25.7 % | Face Value | 2.00 ₹ | DMA 50 | 2,700 ₹ | DMA 200 | 2,633 ₹ |
| Chg in FII Hold | -0.56 % | Chg in DII Hold | 0.68 % | PAT Qtr | 245 Cr. | PAT Prev Qtr | 250 Cr. |
| RSI | 66.2 | MACD | 24.6 | Volume | 1,25,640 | Avg Vol 1Wk | 95,523 |
| Low price | 2,022 ₹ | High price | 3,021 ₹ | PEG Ratio | 4.79 | Debt to equity | 0.01 |
| 52w Index | 85.4 % | Qtr Profit Var | -2.94 % | EPS | 75.5 ₹ | Industry PE | 28.2 |
📊 Financials: AJANTPHARM has excellent fundamentals with ROCE at 33.0% and ROE at 25.7%, reflecting strong capital efficiency. Quarterly PAT dipped slightly from ₹250 Cr. to ₹245 Cr., showing minor earnings pressure but overall stability. Debt-to-equity is extremely low at 0.01, indicating a virtually debt-free balance sheet. EPS of ₹75.5 is robust, supporting long-term earnings visibility.
💹 Valuation: The stock trades at a P/E of 38.1, higher than the industry average of 28.2, suggesting mild overvaluation. P/B ratio is ~8.7 (2875/330), which is expensive. PEG ratio of 4.79 highlights stretched valuations relative to growth. Dividend yield of 0.97% provides modest income support.
🏢 Business Model & Competitive Advantage: AJANTPHARM operates in pharmaceuticals, focusing on specialty generics and branded formulations. Its competitive advantage lies in strong R&D capabilities, global presence, and efficient capital utilization. The company’s low debt and high profitability metrics strengthen its long-term outlook.
📈 Entry Zone: Technicals show RSI at 66.2 (approaching overbought) and MACD positive, with price above DMA 50 & 200. Accumulation is favorable near ₹2,600–2,750. Long-term investors may hold, as fundamentals remain strong and industry tailwinds support growth.
Positive
- High ROCE (33.0%) and ROE (25.7%) indicate strong profitability.
- Debt-to-equity ratio of 0.01 shows financial stability.
- EPS of ₹75.5 supports earnings strength.
Limitation
- P/E ratio (38.1) above industry average (28.2).
- P/B ratio (~8.7) indicates expensive valuation.
- Quarterly PAT decline (-2.94%) shows short-term pressure.
Company Negative News
- Minor decline in quarterly PAT from ₹250 Cr. to ₹245 Cr.
- FII holdings decreased by -0.56%, showing reduced foreign investor confidence.
Company Positive News
- DII holdings increased by 0.68%, reflecting domestic institutional support.
- Strong trading volumes above average indicate investor interest.
Industry
- Pharmaceutical sector benefits from global demand for generics and specialty drugs