AKUMS - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.2
| Stock Code | AKUMS | Market Cap | 8,614 Cr. | Current Price | 547 ₹ | High / Low | 623 ₹ |
| Stock P/E | 67.9 | Book Value | 151 ₹ | Dividend Yield | 0.00 % | ROCE | 16.2 % |
| ROE | 13.2 % | Face Value | 2.00 ₹ | DMA 50 | 500 ₹ | DMA 200 | 492 ₹ |
| Chg in FII Hold | 0.24 % | Chg in DII Hold | -0.05 % | PAT Qtr | 31.0 Cr. | PAT Prev Qtr | 23.5 Cr. |
| RSI | 61.1 | MACD | 14.2 | Volume | 2,59,876 | Avg Vol 1Wk | 1,70,404 |
| Low price | 409 ₹ | High price | 623 ₹ | PEG Ratio | 1.98 | Debt to equity | 0.02 |
| 52w Index | 64.6 % | Qtr Profit Var | -24.7 % | EPS | 7.88 ₹ | Industry PE | 30.1 |
📊 Financials: AKUMS shows moderate fundamentals with ROE at 13.2% and ROCE at 16.2%, reflecting acceptable efficiency. Debt-to-equity ratio of 0.02 highlights a virtually debt-free balance sheet. PAT improved from ₹23.5 Cr. to ₹31.0 Cr., but quarterly profit variation (-24.7%) indicates inconsistency. EPS of ₹7.88 remains modest relative to valuation.
💹 Valuation: Current P/E of 67.9 is significantly above industry average (30.1), suggesting overvaluation. PEG ratio of 1.98 signals expensive growth relative to earnings. P/B ratio (~3.6) is moderately high compared to book value ₹151, limiting intrinsic value comfort.
🏢 Business Model: AKUMS operates in pharmaceuticals, benefiting from strong demand and manufacturing scale. Competitive advantage lies in its diversified portfolio and near debt-free status. However, earnings volatility and stretched valuations reduce margin of safety.
📈 Entry Zone: Ideal entry closer to ₹480–510, near DMA 200 (₹492) and below current price ₹547. This range offers better valuation comfort and aligns with technical support levels.
📌 Long-Term Holding: Suitable for medium-term investors (2–3 years). Long-term holding beyond 3 years should be considered only if earnings stabilize and ROE/ROCE improve.
Positive
- Near debt-free balance sheet (Debt-to-equity 0.02)
- Quarterly PAT growth compared to previous quarter
- FII holdings increased (+0.24%), showing foreign investor confidence
- Strong trading volumes above weekly average
Limitation
- High P/E (67.9) vs industry average (30.1)
- PEG ratio of 1.98 indicates overvaluation relative to growth
- No dividend yield, limiting shareholder returns
- Quarterly profit variation (-24.7%) shows inconsistency
- DII holdings decreased (-0.05%), reflecting reduced domestic interest
Company Negative News
- No major negative news reported, but valuation and profit volatility remain concerns
Company Positive News
- Quarterly profit growth compared to previous quarter shows momentum
- Near debt-free balance sheet provides financial flexibility
Industry
- Industry P/E at 30.1 reflects moderate sector valuation
- Pharmaceutical sector benefits from long-term demand and innovation-driven growth
Conclusion
AKUMS is moderately attractive with near debt-free status and improving profits, but valuations are stretched. Entry is recommended around ₹480–510 for better margin of safety. For existing holders, a medium-term horizon (2–3 years) with partial exits near ₹600–620 is advisable. Long-term holding beyond 3 years should be considered only if ROE/ROCE improve and earnings stabilize.