BASF - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.2
| Stock Code | BASF | Market Cap | 15,764 Cr. | Current Price | 3,642 ₹ | High / Low | 5,424 ₹ |
| Stock P/E | 40.8 | Book Value | 881 ₹ | Dividend Yield | 0.55 % | ROCE | 18.0 % |
| ROE | 13.7 % | Face Value | 10.0 ₹ | DMA 50 | 3,580 ₹ | DMA 200 | 4,028 ₹ |
| Chg in FII Hold | 1.21 % | Chg in DII Hold | -0.13 % | PAT Qtr | 105 Cr. | PAT Prev Qtr | 101 Cr. |
| RSI | 55.0 | MACD | 53.7 | Volume | 21,811 | Avg Vol 1Wk | 15,838 |
| Low price | 2,907 ₹ | High price | 5,424 ₹ | PEG Ratio | -6.11 | Debt to equity | 0.04 |
| 52w Index | 29.2 % | Qtr Profit Var | 0.12 % | EPS | 92.5 ₹ | Industry PE | 28.9 |
📊 Financials: BASF maintains moderate fundamentals with ROCE at 18.0% and ROE at 13.7%. EPS stands at ₹92.5, supported by stable quarterly PAT (₹105 Cr. vs ₹101 Cr.). Debt-to-equity ratio is very low at 0.04, reflecting strong balance sheet health. However, profit growth remains flat (+0.12%), limiting cash flow expansion.
💹 Valuation: The stock trades at a P/E of 40.8 compared to the industry average of 28.9, indicating stretched valuations. The PEG ratio of -6.11 highlights weak earnings growth relative to valuation. Book value is ₹881, giving a P/B ratio of ~4.1, which is moderately expensive. Dividend yield at 0.55% provides minor shareholder return.
🏢 Business Model & Competitive Advantage: BASF operates in the chemical sector, benefiting from diversified product lines and cyclical demand. Its competitive advantage lies in efficient capital use and low leverage. However, weak earnings growth and stretched valuations reduce attractiveness.
🎯 Entry Zone: A favorable entry zone lies near ₹3,500–₹3,600 (close to 50 DMA support). Current price of ₹3,642 is within this zone, offering a balanced risk-reward setup.
📈 Long-Term Holding Guidance: Suitable for long-term investors only if earnings growth improves. Partial allocation is recommended, with profit booking near resistance (~₹5,200–₹5,400).
Positive
- Strong ROCE (18.0%) and ROE (13.7%)
- Low debt-to-equity ratio (0.04)
- Stable quarterly PAT (₹105 Cr.)
- EPS at ₹92.5 supports earnings visibility
Limitation
- High P/E (40.8) vs industry average (28.9)
- Negative PEG ratio (-6.11) indicates weak growth
- Flat profit growth (+0.12%)
- Dividend yield remains modest at 0.55%
Company Negative News
- Valuation stretched compared to peers
- DII holdings declined (-0.13%), showing reduced domestic support
Company Positive News
- FII holdings increased (+1.21%), showing foreign investor confidence
- Stable quarterly earnings despite industry cyclicality
Industry
- Chemical sector trades at industry P/E of 28.9
- Sector outlook remains cyclical but stable
Conclusion
⚖️ BASF is fundamentally stable with strong efficiency and low leverage, but valuations are stretched and earnings growth is weak. Entry near ₹3,500–₹3,600 offers a reasonable risk-reward balance. Long-term holding requires improvement in profitability; otherwise, cautious partial exposure with profit booking near ₹5,200–₹5,400 is recommended.