⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
ALKEM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | ALKEM | Market Cap | 63,740 Cr. | Current Price | 5,332 ₹ | High / Low | 5,934 ₹ |
| Stock P/E | 28.8 | Book Value | 1,143 ₹ | Dividend Yield | 0.84 % | ROCE | 19.5 % |
| ROE | 19.9 % | Face Value | 2.00 ₹ | DMA 50 | 5,558 ₹ | DMA 200 | 5,462 ₹ |
| Chg in FII Hold | 0.50 % | Chg in DII Hold | -0.39 % | PAT Qtr | 654 Cr. | PAT Prev Qtr | 724 Cr. |
| RSI | 41.1 | MACD | -67.8 | Volume | 65,922 | Avg Vol 1Wk | 1,32,277 |
| Low price | 4,612 ₹ | High price | 5,934 ₹ | PEG Ratio | 2.07 | Debt to equity | 0.06 |
| 52w Index | 54.5 % | Qtr Profit Var | -3.35 % | EPS | 196 ₹ | Industry PE | 27.6 |
📊 Financials
- Revenue & Profitability: PAT declined from ₹724 Cr. to ₹654 Cr., showing a -3.35% quarterly variation. EPS at ₹196 remains strong, reflecting solid earnings capacity.
- Margins & Returns: ROCE at 19.5% and ROE at 19.9% are healthy, indicating efficient capital utilization and profitability.
- Debt & Liquidity: Debt-to-equity ratio of 0.06 indicates a nearly debt-free balance sheet, ensuring financial resilience.
- Cash Flow: Dividend yield of 0.84% provides modest shareholder returns.
💹 Valuation
- P/E Ratio: 28.8 vs Industry PE of 27.6 — trading at a slight premium.
- P/B Ratio: Current price ₹5,332 vs Book Value ₹1,143 — ~4.7x book value, moderately expensive.
- PEG Ratio: 2.07 — suggests stretched valuation relative to growth.
- Intrinsic Value: Current price is slightly above fair value, offering limited margin of safety.
🏢 Business Model & Competitive Advantage
- Strong presence in pharmaceuticals with diversified product portfolio.
- High ROCE and ROE reflect operational efficiency and competitive strength.
- Low debt enhances resilience and flexibility in expansion.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹4,800 – ₹5,100, closer to its 52-week low.
- Long-Term Holding: Strong fundamentals and industry tailwinds make it a good candidate for long-term holding. Accumulate on dips for sustained growth.
✅ Positive
- Healthy ROCE (19.5%) and ROE (19.9%) highlight efficiency.
- Debt-to-equity ratio of 0.06 ensures financial stability.
- Dividend yield of 0.84% provides shareholder returns.
- FII holdings increased by 0.50%, showing foreign investor confidence.
⚠️ Limitation
- Valuation multiples (P/E, P/B, PEG) suggest overvaluation.
- Quarterly PAT declined (-3.35%), showing short-term weakness.
- Premium valuation compared to industry average PE.
📉 Company Negative News
- DII holdings declined by 0.39%, showing reduced domestic institutional confidence.
- MACD at -67.8 indicates bearish technical signals.
📈 Company Positive News
- Strong EPS of ₹196 reflects robust earnings capacity.
- FII holdings increased, showing foreign investor confidence.
- Stock trading near DMA 200 indicates technical support.
🏭 Industry
- Pharmaceutical sector benefits from global demand and healthcare expansion.
- Industry PE at 27.6 is slightly lower than company’s valuation, highlighting premium pricing for ALKEM.
🔎 Conclusion
ALKEM demonstrates strong fundamentals with healthy efficiency, low debt, and consistent earnings power. However, valuations are stretched and short-term profit decline raises caution. Best strategy: accumulate near ₹4,800–₹5,100 and hold for long-term gains, leveraging industry growth and the company’s competitive strength.