KSB - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.2
| Stock Code | KSB | Market Cap | 14,289 Cr. | Current Price | 820 ₹ | High / Low | 1,028 ₹ |
| Stock P/E | 53.1 | Book Value | 92.7 ₹ | Dividend Yield | 0.54 % | ROCE | 25.2 % |
| ROE | 18.8 % | Face Value | 2.00 ₹ | DMA 50 | 856 ₹ | DMA 200 | 805 ₹ |
| Chg in FII Hold | 0.14 % | Chg in DII Hold | -0.31 % | PAT Qtr | 37.3 Cr. | PAT Prev Qtr | 94.0 Cr. |
| RSI | 33.4 | MACD | -18.1 | Volume | 72,743 | Avg Vol 1Wk | 1,43,970 |
| Low price | 667 ₹ | High price | 1,028 ₹ | PEG Ratio | 3.15 | Debt to equity | 0.00 |
| 52w Index | 42.5 % | Qtr Profit Var | -23.9 % | EPS | 14.5 ₹ | Industry PE | 40.0 |
📊 Financials: KSB shows solid fundamentals with ROCE at 25.2% and ROE at 18.8%, reflecting efficient capital use. Debt-to-equity ratio of 0.00 indicates zero leverage, ensuring financial stability. EPS stands at ₹14.5, though PAT dropped from ₹94 Cr. to ₹37.3 Cr., highlighting earnings volatility. Dividend yield at 0.54% provides modest shareholder returns.
💹 Valuation: Current P/E of 53.1 is higher than the industry average of 40.0, suggesting premium valuation. P/B ratio (~8.8, 820/92.7) reflects significant premium pricing relative to book value. PEG ratio of 3.15 indicates overvaluation relative to growth prospects. Intrinsic value analysis suggests the stock is richly valued, with limited margin of safety.
🏢 Business Model & Health: KSB operates in pumps and industrial engineering, with strong competitive advantage in water management, energy, and infrastructure solutions. Zero debt, consistent profitability, and strong ROCE support long-term sustainability. Institutional participation is mixed, with FII holdings increasing (+0.14%) but DII holdings declining (-0.31%).
📈 Entry Zone: Technical indicators (RSI 33.4, MACD -18.1, DMA 50 at ₹856, DMA 200 at ₹805) suggest oversold conditions. Accumulation near ₹780–₹820 could be favorable. Long-term investors may hold, though valuations are stretched compared to industry peers.
Positive
- ✅ Strong ROCE (25.2%) and ROE (18.8%) highlight efficient capital use.
- ✅ Debt-free balance sheet ensures financial stability.
- ✅ Dividend yield (0.54%) provides modest shareholder returns.
- ✅ FII holdings increased (+0.14%), showing foreign investor confidence.
Limitation
- ⚠️ PAT dropped sharply from ₹94 Cr. to ₹37.3 Cr., raising concerns about earnings consistency.
- ⚠️ High P/E (53.1) compared to industry average (40.0) suggests overvaluation.
- ⚠️ P/B ratio (~8.8) reflects significant premium pricing.
- ⚠️ PEG ratio (3.15) indicates growth is overpriced.
Company Negative News
- 📉 Quarterly profit variation (-23.9%) highlights earnings pressure.
- 📉 Decline in DII holdings (-0.31%) reflects reduced domestic institutional confidence.
Company Positive News
- 📈 Debt-free status ensures strong financial health.
- 📈 FII holding increased (+0.14%), reflecting foreign institutional support.
Industry
- 🌐 Industry P/E at 40.0 indicates moderate sector valuations.
- 🌐 Pump and industrial engineering sector benefits from infrastructure and water management demand.
Conclusion
🔎 KSB is fundamentally strong with efficient capital returns, zero debt, and modest dividends. However, valuations are stretched with high P/E and PEG ratios, and earnings volatility is a concern. Entry near ₹780–₹820 offers a balanced risk-reward opportunity. Long-term holding is justified, though investors should monitor profit trends and institutional sentiment closely.