PPLPHARMA - Fundamental Analysis: Financial Health & Valuation

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

Fundamental Rating: 3.4

📊 Core Financials Analysis

Profitability

ROE: 9.74% and ROCE: 12.4% — moderate, below top-tier pharma benchmarks.

EPS: ₹5.42 — relatively low, limiting valuation justification.

PAT Qtr: ₹113 Cr vs ₹277 Cr — significant drop, though YoY variation shows a 32.7% gain, indicating volatility.

Balance Sheet & Cash Flow

Debt-to-equity: 0.17 — low leverage, a positive for financial health.

Dividend Yield: 0.07% — negligible, not attractive for income investors.

Analysts have consistently downgraded EPS and revenue expectations over the past year

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, suggesting cautious outlook on cash flow strength.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 37.6 Slightly overvalued vs industry PE of 33.4

P/B Ratio ~3.61 Acceptable given asset-light model

PEG Ratio 1.69 Fair to slightly expensive relative to growth

Intrinsic Value ₹185–₹195 (est.) Current price slightly above fair value

🧠 Business Model & Competitive Edge

Company Profile: Piramal Pharma Ltd operates in three verticals — CDMO (contract development and manufacturing), complex generics, and consumer healthcare.

Strengths

Global CDMO footprint with diversified therapeutic focus.

Strategic partnerships and long-term contracts.

Challenges

Weak profitability and high valuation multiples.

Analysts have revised down future sales and earnings outlooks, with no clear recovery in sight

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Limited dividend and low return metrics reduce investor appeal.

📈 Technical & Sentiment Overview

RSI: 59.0 — approaching overbought zone.

MACD: 2.31 — mildly bullish momentum.

DMA 50 & 200: Price hovering near both — trend indecisive.

Volume: Below weekly average — waning interest.

FII/DII Holding: Both declined — institutional sentiment cautious.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹185–₹195 — near intrinsic value and technical support.

Holding Strategy

Suitable for medium-risk investors betting on CDMO sector growth.

Monitor margin expansion, global order wins, and EPS recovery.

Analyst consensus price target: ₹267 — ~30% upside from current levels

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PPL Pharma is a strategic play on outsourced drug manufacturing, but current fundamentals suggest patience. If you're bullish on CDMO and can tolerate volatility, it may be worth accumulating gradually. Want to explore its peers like Syngene or Divi’s Labs next?

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www.marketscreener.com

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trendlyne.com

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