HSCL - Fundamental Analysis

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

Fundamental Rating: 4.1

🧾 Core Financial Analysis

📈 Profitability & Growth

PAT Qtr: ₹179 Cr vs ₹155 Cr — ↑46.3% QoQ growth, strong earnings acceleration.

EPS: ₹12.4 — decent, but valuation is stretched relative to earnings.

ROE (16.4%) & ROCE (22.0%) — solid return metrics, indicating efficient capital deployment.

💰 Cash Flow & Debt

Debt-to-Equity: 0.08 — low leverage, balance sheet is healthy.

Dividend Yield: 0.12% — minimal, not a key attraction for income investors.

📊 Valuation Metrics

Metric Value Insight

P/E Ratio 39.2 Slightly above industry PE of 37.6 — mild overvaluation

P/B Ratio ~6.45 High relative to book value — premium pricing

PEG Ratio 0.35 Very attractive — strong growth at a reasonable price

Intrinsic Value Estimated ~₹420–₹460 Based on earnings and sector benchmarks

🏗️ Business Model & Competitive Advantage

Sector: Engineering and infrastructure — Hindustan Salts & Chemicals Ltd (HSCL) operates in industrial materials and EPC services.

Growth Drivers: Government infrastructure push, urban development, and industrial expansion.

Competitive Edge: Strong execution capabilities, diversified order book, and presence in strategic sectors.

Risks: Cyclical demand, project delays, and margin pressures in EPC contracts.

📉 Technical & Sentiment Indicators

RSI: 45.1 — approaching oversold territory, potential for rebound.

MACD: 4.23 — positive momentum building.

DMA 50 & 200: Price hovering near both — neutral trend, watch for breakout.

Volume: Stable — no major accumulation or distribution signals.

💡 Investment Guidance

📌 Entry Zone (If Undervalued)

₹440–₹470 — ideal accumulation zone near intrinsic value.

Consider staggered buying if price dips below ₹460 with improving technicals.

📈 Long-Term Holding View

Moderate buy for growth-oriented investors.

Strong earnings growth and low PEG ratio make it attractive.

Hold with a 2–3 year horizon, especially if infrastructure tailwinds persist.

Target potential upside toward ₹600–₹650 if growth sustains.

Would you like a breakdown of its order book or a comparison with peers like Engineers India or NBCC?

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