AJANTPHARM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | AJANTPHARM | Market Cap | 35,266 Cr. | Current Price | 2,823 ₹ | High / Low | 3,228 ₹ |
| Stock P/E | 37.4 | Book Value | 330 ₹ | Dividend Yield | 0.99 % | ROCE | 33.0 % |
| ROE | 25.7 % | Face Value | 2.00 ₹ | DMA 50 | 2,833 ₹ | DMA 200 | 2,739 ₹ |
| Chg in FII Hold | 0.29 % | Chg in DII Hold | -0.22 % | PAT Qtr | 245 Cr. | PAT Prev Qtr | 250 Cr. |
| RSI | 50.2 | MACD | -21.4 | Volume | 63,927 | Avg Vol 1Wk | 56,484 |
| Low price | 2,330 ₹ | High price | 3,228 ₹ | PEG Ratio | 4.71 | Debt to equity | 0.01 |
| 52w Index | 54.9 % | Qtr Profit Var | -2.94 % | EPS | 75.5 ₹ | Industry PE | 30.1 |
📊 Financials: AJANTPHARM demonstrates strong fundamentals with ROE at 25.7% and ROCE at 33.0%, reflecting excellent capital efficiency. Debt-to-equity ratio of 0.01 highlights a virtually debt-free balance sheet. EPS of ₹75.5 supports robust earnings power, though quarterly PAT declined slightly from ₹250 Cr. to ₹245 Cr.
💹 Valuation: Current P/E of 37.4 is above industry average (30.1), suggesting premium valuation. PEG ratio of 4.71 indicates expensive growth relative to earnings. P/B ratio (~8.6) is stretched compared to book value ₹330, limiting intrinsic value comfort.
🏢 Business Model: AJANTPHARM operates in pharmaceuticals, benefiting from strong demand and innovation-driven growth. Competitive advantage lies in efficiency, global presence, and consistent profitability. However, valuation premiums reduce margin of safety.
📈 Entry Zone: Ideal entry closer to ₹2,500–2,700, near DMA 200 (₹2,739) and below current price ₹2,823. This range offers better valuation comfort and aligns with technical support.
📌 Long-Term Holding: Suitable for long-term investors (3–5 years). Strong fundamentals support holding, with partial profit booking advisable near ₹3,100–3,200 resistance levels.
Positive
- High ROCE (33.0%) and ROE (25.7%) indicate excellent efficiency
- Debt-to-equity ratio of 0.01 shows near debt-free status
- EPS of ₹75.5 reflects strong earnings power
- FII holdings increased (+0.29%), signaling foreign investor confidence
Limitation
- P/E (37.4) above industry average (30.1)
- PEG ratio of 4.71 suggests overvaluation relative to growth
- P/B ratio (~8.6) stretched vs intrinsic value
- Quarterly PAT decline (-2.94%) shows mild earnings pressure
Company Negative News
- DII holdings decreased (-0.22%), showing reduced domestic institutional interest
Company Positive News
- Strong profitability metrics and consistent EPS growth
- Dividend yield of 0.99% adds shareholder value
Industry
- Industry P/E at 30.1 reflects moderate sector valuation
- Pharmaceutical sector benefits from long-term demand and innovation-driven growth
Conclusion
AJANTPHARM is fundamentally strong with excellent ROE/ROCE and near debt-free status. Entry is recommended around ₹2,500–2,700 for valuation comfort. Long-term investors can hold for 3–5 years, with partial exits near ₹3,100–3,200. Monitoring earnings growth and dividend policy will be key for sustained returns.