ASTRAZEN - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.7
| Stock Code | ASTRAZEN | Market Cap | 21,586 Cr. | Current Price | 8,623 ₹ | High / Low | 10,691 ₹ |
| Stock P/E | 104 | Book Value | 320 ₹ | Dividend Yield | 0.37 % | ROCE | 33.4 % |
| ROE | 23.6 % | Face Value | 2.00 ₹ | DMA 50 | 8,455 ₹ | DMA 200 | 8,555 ₹ |
| Chg in FII Hold | 0.07 % | Chg in DII Hold | 0.24 % | PAT Qtr | 31.6 Cr. | PAT Prev Qtr | 58.1 Cr. |
| RSI | 55.4 | MACD | 59.0 | Volume | 1,798 | Avg Vol 1Wk | 5,016 |
| Low price | 7,552 ₹ | High price | 10,691 ₹ | PEG Ratio | 2.40 | Debt to equity | 0.04 |
| 52w Index | 34.1 % | Qtr Profit Var | -42.3 % | EPS | 80.4 ₹ | Industry PE | 30.5 |
📊 Financial Overview: Astrazen demonstrates strong return metrics with ROCE at 33.4% and ROE at 23.6%, supported by a very low debt-to-equity ratio of 0.04. However, quarterly profit fell sharply (-42.3%), raising concerns about earnings stability. Cash flows are supported by low leverage, but margins are under pressure.
💹 Valuation Indicators: The stock trades at a steep P/E of 104 compared to the industry average of 30.5, suggesting significant overvaluation. With a book value of ₹320, the P/B ratio is ~26.9, which is excessive. PEG ratio of 2.40 indicates growth does not justify the premium valuation. Intrinsic value appears lower than the current market price.
🏢 Business Model & Competitive Advantage: Astrazen operates in the pharmaceutical sector, leveraging R&D strength, intellectual property, and established market presence. Its competitive advantage lies in innovation and brand recognition, but earnings volatility weakens overall health.
📈 Entry Zone & Long-Term Guidance: Current price ₹8,623 is above intrinsic comfort levels. A better entry zone would be closer to ₹7,500–₹7,800, aligning with technical support. Long-term holding is advisable only if earnings stabilize and valuation moderates.
Positive
- ✅ Strong ROCE (33.4%) and ROE (23.6%) show efficient capital use.
- ✅ Very low debt-to-equity (0.04) ensures financial resilience.
- ✅ Established brand and R&D-driven business model.
Limitation
- ⚠️ Extremely high P/E (104) compared to industry average (30.5).
- ⚠️ Weak dividend yield (0.37%) offers limited investor income.
- ⚠️ PEG ratio (2.40) signals overvaluation relative to growth.
Company Negative News
- 📉 Quarterly profit dropped from ₹58.1 Cr. to ₹31.6 Cr. (-42.3%).
- 📉 Earnings volatility raises sustainability concerns.
Company Positive News
- 📈 FII holding increased by 0.07% and DII holding by 0.24%.
- 📈 RSI at 55.4 shows neutral momentum, avoiding overbought signals.
Industry
- 🏭 Pharma industry P/E at 30.5, much lower than Astrazen’s valuation.
- 🏭 Sector growth driven by innovation, patents, and rising healthcare demand.
Conclusion
🔎 Astrazen is fundamentally strong in returns and debt management but significantly overvalued compared to peers. Entry should be considered only near ₹7,500–₹7,800. Long-term holding depends on earnings recovery and valuation correction.
If you’d like, I can also prepare a peer comparison with other pharma companies or a intrinsic value analysis to refine the entry strategy.