BASF - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.6

Let’s analyze BASF India’s financial health, valuation, strategic positioning, and long-term outlook in detail

📊 Core Financials & Efficiency

EPS: ₹111 — solid earnings base.

ROE (13.4%) & ROCE (17.5%): Respectable returns, particularly in the chemicals sector; reflects decent operational efficiency.

Debt-to-Equity: 0.05 — extremely low leverage, indicating robust balance sheet strength and low financial risk.

PAT Decline: From ₹104 Cr to ₹20.8 Cr — an 87.1% drop, suggests severe margin pressure or a one-off cost impact.

Dividend Yield: 0.40% — minimal payout, reinvestment likely prioritized.

💰 Valuation Metrics

P/E Ratio: 47.8 — significantly above the industry average (34.4), indicating an aggressive valuation for moderate growth.

P/B Ratio: ~6.01 (₹5,052 ÷ ₹840) — premium pricing relative to assets.

PEG Ratio: Not available — the absence raises difficulty in judging growth-adjusted valuation, but the sharp drop in profit likely distorts it.

Intrinsic Value: With current earnings dip and high P/E, it’s likely overpriced unless future earnings rebound.

🧠 Business Model & Competitive Edge

Sector: Specialty & performance chemicals — typically cyclical, but with niche industrial applications.

Moat & Strengths

Strong global brand and IP access from parent group.

Product breadth across agrochemicals, coatings, and personal care segments.

Concerns

Substantial quarterly profit drop undermines near-term confidence.

Rising competition and input cost volatility may erode margins.

🧮 Technical Indicators

RSI: 50.1 — neutral territory, no clear overbought/oversold signal.

MACD: -4.71 — mild bearishness.

Volume: Slightly above weekly average — suggests mixed investor sentiment or consolidation.

🎯 Suggested Entry Zone

₹4,300 – ₹4,700: If price corrects further, this band aligns with past support and offers a better margin of safety.

Best entered post-profit rebound or strong volume-led confirmation.

📈 Long-Term Holding Strategy

Invest only with a 3–5 year horizon if confident in business turnaround.

Key triggers to watch

Normalization in earnings.

Raw material cost stabilization.

Sectoral tailwinds (e.g., manufacturing push, demand recovery).

If you'd like to compare it with other chemical players like Deepak Nitrite or PI Industries, I can whip up a benchmarking grid. Just say the word.

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