ETERNAL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.9
| Stock Code | ETERNAL | Market Cap | 2,38,393 Cr. | Current Price | 247 ₹ | High / Low | 368 ₹ |
| Stock P/E | 89.8 | Book Value | 38.4 ₹ | Dividend Yield | 0.00 % | ROCE | 8.36 % |
| ROE | 7.46 % | Face Value | 1.00 ₹ | DMA 50 | 251 ₹ | DMA 200 | 270 ₹ |
| Chg in FII Hold | -3.63 % | Chg in DII Hold | 3.27 % | PAT Qtr | 705 Cr. | PAT Prev Qtr | 657 Cr. |
| RSI | 48.8 | MACD | 3.28 | Volume | 7,59,16,583 | Avg Vol 1Wk | 9,57,75,744 |
| Low price | 213 ₹ | High price | 368 ₹ | PEG Ratio | 0.28 | Debt to equity | 0.01 |
| 52w Index | 22.1 % | Qtr Profit Var | 21.1 % | EPS | 2.75 ₹ | Industry PE | 38.0 |
Financials & Valuation:
ETERNAL shows weak fundamentals. ROCE (8.36%) and ROE (7.46%) are low, reflecting poor capital efficiency. EPS of 2.75 ₹ is modest relative to market cap, and quarterly PAT (705 Cr. vs 657 Cr.) shows growth but remains insufficient to justify valuations. Debt-to-equity is very low at 0.01, ensuring balance sheet stability.
Valuation Indicators:
P/E ratio of 89.8 is far higher than the industry average (38.0), indicating extreme overvaluation. Book Value of 38.4 ₹ compared to current price of 247 ₹ shows steep premium pricing. PEG ratio of 0.28 suggests valuations are stretched relative to growth. Dividend yield is 0%, offering no income support.
Business Model & Health:
ETERNAL operates in a sector with growth potential, but profitability metrics remain weak. FII holdings declined (-3.63%), showing reduced foreign confidence, while DII holdings increased (+3.27%), reflecting domestic support.
Entry Zone & Holding Guidance:
Technically, support lies around 230–240 ₹, with resistance near 260–270 ₹. Entry should only be considered near support levels with strict stop-losses. Long-term holding is not advisable until ROE and ROCE improve significantly and dividend payouts resume.
Positive
- Very low debt-to-equity (0.01).
- DII holdings increased (+3.27%), showing domestic confidence.
- PAT growth (705 Cr. vs 657 Cr.) indicates earnings momentum.
Limitation
- Extremely high P/E (89.8) vs industry average (38.0).
- Weak ROCE (8.36%) and ROE (7.46%).
- EPS of 2.75 ₹ is low relative to valuation.
- No dividend yield.
Company Negative News
- Decline in FII holdings (-3.63%).
- Weak profitability metrics despite PAT growth.
- Overvaluation compared to peers.
Company Positive News
- Quarterly PAT improved to 705 Cr. from 657 Cr.
- DII holdings increased, reflecting domestic institutional support.
- Technical indicators (MACD positive at 3.28) show mild bullish bias.
Industry
- Industry PE (38.0) is much lower than ETERNAL’s, highlighting overvaluation.
- Sector growth potential exists, but profitability efficiency lags peers.
- Long-term sustainability depends on improving capital returns.
Conclusion
ETERNAL is fundamentally weak with poor efficiency metrics and extreme overvaluation. Entry should only be considered near 230–240 ₹ with strict stop-losses. Long-term investors should avoid until fundamentals strengthen and valuations normalize.
Would you like me to extend this into a comparative overlay against peers in the same sector, so you can see how ETERNAL stacks up in valuation, ROE/ROCE, and dividend yield?