AKUMS - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | AKUMS | Market Cap | 7,040 Cr. | Current Price | 447 ₹ | High / Low | 623 ₹ |
| Stock P/E | 51.4 | Book Value | 151 ₹ | Dividend Yield | 0.00 % | ROCE | 16.2 % |
| ROE | 13.2 % | Face Value | 2.00 ₹ | DMA 50 | 439 ₹ | DMA 200 | 489 ₹ |
| Chg in FII Hold | -1.13 % | Chg in DII Hold | 5.13 % | PAT Qtr | 23.5 Cr. | PAT Prev Qtr | 44.9 Cr. |
| RSI | 51.9 | MACD | -0.67 | Volume | 1,58,361 | Avg Vol 1Wk | 98,631 |
| Low price | 405 ₹ | High price | 623 ₹ | PEG Ratio | 1.50 | Debt to equity | 0.02 |
| 52w Index | 19.4 % | Qtr Profit Var | -53.4 % | EPS | 8.71 ₹ | Industry PE | 28.2 |
📊 Financials: AKUMS shows moderate profitability with ROCE at 16.2% and ROE at 13.2%. Quarterly PAT dropped sharply from ₹44.9 Cr. to ₹23.5 Cr., indicating earnings pressure. Debt-to-equity is very low at 0.02, reflecting a nearly debt-free balance sheet. EPS of ₹8.71 is modest relative to its market cap of ₹7,040 Cr.
💹 Valuation: The stock trades at a P/E of 51.4, well above the industry average of 28.2, suggesting overvaluation. P/B ratio is ~2.96 (447/151), which is reasonable compared to peers. PEG ratio of 1.50 indicates fair growth potential. Dividend yield is 0%, offering no income support for investors.
🏢 Business Model & Competitive Advantage: AKUMS operates in pharmaceuticals and contract manufacturing, benefiting from India’s growing healthcare demand. Its competitive advantage lies in scale, diversified product portfolio, and strong domestic presence. However, profitability volatility and high valuations limit investor comfort.
📈 Entry Zone: Technicals show RSI at 51.9 (neutral) and MACD slightly negative, with price below DMA 200 but near DMA 50. Accumulation may be considered near ₹405–430 for long-term investors. Current valuations are stretched, so cautious entry is advised.
Positive
- Debt-to-equity ratio of 0.02 shows strong financial stability.
- DII holdings increased by 5.13%, reflecting strong domestic institutional support.
- Reasonable P/B ratio (~2.96) compared to industry peers.
Limitation
- High P/E ratio (51.4) compared to industry average (28.2).
- Quarterly PAT decline (-53.4%) indicates earnings weakness.
- No dividend yield, reducing investor appeal.
Company Negative News
- Sharp decline in quarterly PAT from ₹44.9 Cr. to ₹23.5 Cr.
- FII holdings decreased by -1.13%, showing reduced foreign investor confidence.
Company Positive News
- DII holdings increased significantly (+5.13%), showing strong domestic support.
- Stable trading volumes above average indicate investor interest.
Industry
- Pharmaceutical sector benefits from rising healthcare demand and government initiatives.
- Industry P/E at 28.2 is lower than AKUMS, showing sector-wide value opportunities.
- Contract manufacturing demand supports long-term growth outlook.
Conclusion
🔎 AKUMS is financially stable with low debt and reasonable P/B valuation, but faces earnings pressure and stretched P/E multiples. Entry near ₹405–430 is attractive for long-term investors willing to tolerate volatility. Conservative investors may wait for stronger earnings visibility before committing to long-term holding.