AJANTPHARM - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.3

Here’s a detailed breakdown of Ajanta Pharma Ltd (AJANTPHARM)

🧾 Core Financials

Profitability & Growth

PAT rose from ₹193 Cr to ₹255 Cr — a solid 8.02% YoY growth, indicating steady performance.

EPS: ₹74.9 — strong, supporting valuation.

ROE: 25.7% and ROCE: 33.0% — excellent return metrics, showcasing efficient capital deployment.

Debt & Liquidity

Debt-to-equity: 0.01 — virtually debt-free, a major strength in volatile pharma markets.

Dividend Yield: 1.10% — modest, but adds shareholder value.

📊 Valuation Indicators

Metric Value Industry Avg Remarks

P/E Ratio 34.0 33.4 Fairly valued

P/B Ratio ~8.8 ~4.5 Premium to book value

PEG Ratio 4.29 ~1 Price exceeds growth potential

Intrinsic Value ~₹2,300–₹2,400 — Slightly overvalued

While P/E is in line with industry, the high PEG suggests growth expectations may be priced in.

🏢 Business Model & Competitive Edge

Core Operations: Branded generics across India, Asia, Africa, and emerging markets.

Strengths

Strong R&D pipeline and niche therapeutic focus (ophthalmology, dermatology).

High margin profile and lean balance sheet.

Risks

PEG ratio implies limited upside unless earnings accelerate.

Flat institutional holding change suggests neutral sentiment.

📉 Technical & Entry Zone

Current Price: ₹2,550

DMA 50/200: ₹2,609 / ₹2,644 — trading below key averages.

RSI: 44.0 — approaching oversold.

MACD: -21.8 — bearish crossover.

Suggested Entry Zone: ₹2,300–₹2,400 range, ideally near intrinsic value or 52-week low of ₹2,022.

🕰️ Long-Term Holding Guidance

Hold if already invested, especially for consistent earnings and high ROE.

Good for fresh entry on dips below ₹2,400.

Ideal for long-term only if

EPS growth sustains above 15% CAGR.

PEG drops below 2 and valuation aligns with earnings momentum.

Would you like a peer comparison with IPCA Labs or a breakdown of Ajanta’s export revenue mix?

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