BASF - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 How I’m Thinking About This

You’re asking for a full-spectrum fundamental analysis of BASF India Ltd, a specialty chemicals giant. I’m weighing its financial strength, valuation metrics, business model, and technical signals to determine its long-term investment potential and ideal entry point.

📊 Core Financials Breakdown

Profitability & Growth

EPS: ₹98.4 — solid earnings base

PAT Qtr: ₹147 Cr vs ₹32.9 Cr — strong rebound, but YoY trend is volatile

ROE: 13.7%, ROCE: 18.0% — healthy capital efficiency

Qtr Profit Var: -30.1% — recent dip signals cyclical pressure

Balance Sheet Strength

Debt-to-equity: 0.04 — virtually debt-free

Dividend Yield: 0.43% — modest, but consistent

Book Value: ₹845 — price-to-book ratio ~5.5, indicating premium valuation

💰 Valuation Indicators

Metric Value Interpretation

P/E Ratio 48.9 Overvalued vs industry PE of 33.9

P/B Ratio ~5.5 High premium to book value

PEG Ratio -7.32 Negative due to earnings contraction

Intrinsic Value ~₹4,200–₹4,400 Slightly overvalued at current price

Valuation is stretched, especially with a negative PEG ratio and recent profit volatility.

🏭 Business Model & Competitive Edge

Industry: Specialty chemicals — cyclical but high-margin niches

Moat: Strong global parentage (BASF SE), diversified product portfolio across agriculture, automotive, and industrial chemicals

Challenges: High input cost sensitivity, margin compression

Momentum: 5-year return of ~354.8%

1

, but recent performance has lagged

📉 Technical & Entry Zone

Current Price: ₹4,650

DMA 50/200: Trading below both — mild bearish trend

MACD: -20.1 — bearish momentum

RSI: 48.5 — neutral zone

📌 Suggested Entry Zone: ₹4,200–₹4,400

This range offers a better margin of safety and aligns with technical support levels.

🕰️ Long-Term Holding Guidance

Hold if already invested, but monitor quarterly earnings closely

Buy on dips near ₹4,300 if bullish on specialty chemicals and long-term India consumption story

2026 Target Price: ₹4,848–₹4,903 based on technical projections

1

⭐ Fundamental Rating

3.6

Strong brand and balance sheet, but valuation and earnings volatility temper enthusiasm. Let me know if you’d like a peer comparison with Atul Ltd or Tata Chemicals.

1

stockpricearchive.com

Edit in a page