ETERNAL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | ETERNAL | Market Cap | 2,33,490 Cr. | Current Price | 242 ₹ | High / Low | 368 ₹ |
| Stock P/E | 87.9 | Book Value | 38.4 ₹ | Dividend Yield | 0.00 % | ROCE | 8.36 % |
| ROE | 7.46 % | Face Value | 1.00 ₹ | DMA 50 | 249 ₹ | DMA 200 | 267 ₹ |
| Chg in FII Hold | -3.63 % | Chg in DII Hold | 3.27 % | PAT Qtr | 705 Cr. | PAT Prev Qtr | 657 Cr. |
| RSI | 45.8 | MACD | -1.33 | Volume | 2,22,07,959 | Avg Vol 1Wk | 2,73,33,317 |
| Low price | 213 ₹ | High price | 368 ₹ | PEG Ratio | 0.28 | Debt to equity | 0.01 |
| 52w Index | 18.9 % | Qtr Profit Var | 21.1 % | EPS | 2.75 ₹ | Industry PE | 41.9 |
📊 Financials: ETERNAL shows mixed fundamentals. Quarterly PAT improved to 705 Cr from 657 Cr, reflecting growth, but return metrics remain weak with ROCE at 8.36% and ROE at 7.46%. EPS is low at 2.75 ₹ relative to market cap, indicating limited profitability. Debt-to-equity is very low at 0.01, suggesting strong balance sheet health.
💰 Valuation: The stock trades at a P/E of 87.9, far above the industry average of 41.9, making it significantly overvalued. Book value is 38.4 ₹, with current price at 242 ₹, implying a steep P/B ratio of ~6.3. PEG ratio of 0.28 indicates valuation is attractive relative to growth, but intrinsic value appears lower than current levels, suggesting caution.
🏭 Business Model & Health: ETERNAL operates in a high-growth sector, but profitability metrics are weak compared to peers. Competitive advantage lies in scale and market presence, yet efficiency and margins remain under pressure. Overall health is moderate, supported by low debt but challenged by high valuations and weak returns.
📈 Entry Zone: RSI at 45.8 indicates neutral momentum. Support is near 213 ₹, resistance at 368 ₹. Entry around 215–225 ₹ offers a safer long-term opportunity. Long-term holding is only advisable if profitability improves and valuations normalize.
Positive
- 🏭 [Market Scale](ca://s?q=ETERNAL_market_scale): Large market capitalization with strong presence.
- 📈 [Profit Growth](ca://s?q=ETERNAL_profit_growth): PAT increased from 657 Cr to 705 Cr.
- 💸 [Low Debt](ca://s?q=ETERNAL_debt_levels): Debt-to-equity ratio of 0.01 ensures financial stability.
Limitation
- 📉 [Return Metrics](ca://s?q=ETERNAL_return_metrics): ROCE (8.36%) and ROE (7.46%) are weak.
- ⚠️ [Valuation](ca://s?q=ETERNAL_valuation): P/E of 87.9 is far above industry average.
- 📊 [FII Outflow](ca://s?q=ETERNAL_FII_outflow): Foreign investors reduced holdings by -3.63%.
Company Negative News
- 📉 [FII Reduction](ca://s?q=ETERNAL_FII_reduction): Decline in foreign institutional holdings.
- 📊 [Weak Returns](ca://s?q=ETERNAL_weak_returns): ROCE and ROE remain below industry standards.
Company Positive News
- 📈 [DII Support](ca://s?q=ETERNAL_DII_support): Domestic institutions increased holdings by 3.27%.
- 💹 [Profit Growth](ca://s?q=ETERNAL_profit_growth): PAT improved quarter-on-quarter.
Industry
- 🏭 [Sector Growth](ca://s?q=Indian_sector_growth): Industry expanding with strong demand outlook.
- 📊 [Industry PE](ca://s?q=Industry_PE): Sector average P/E is 41.9, much lower than ETERNAL’s valuation.
Conclusion
⚠️ ETERNAL demonstrates moderate fundamentals with strong market presence but weak profitability and inflated valuations. While low debt and profit growth are positives, high P/E and poor return metrics raise concerns. Entry around 215–225 ₹ is safer, and long-term holding should be considered only if efficiency improves and valuations normalize.