PPLPHARMA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 3.4

📊 Core Financials: PPL Pharma shows moderate fundamentals with ROE at 9.74% and ROCE at 12.4%. Debt-to-equity is low at 0.12, reflecting manageable leverage. Quarterly PAT at 196 Cr. is higher than the previous quarter (113 Cr.), but profit variation (-6.54%) indicates volatility. EPS of 5.32 ₹ is modest relative to market cap, limiting earnings strength.

💹 Valuation Indicators: Current P/E of 32.2 is slightly above industry P/E of 30.6, suggesting fair-to-premium valuation. P/B ratio ~2.9 (Price 171 / Book Value 58.2) is reasonable. PEG ratio at 1.45 indicates balanced growth-adjusted valuation. Intrinsic value appears close to current price, offering limited margin of safety.

🏢 Business Model & Competitive Advantage: PPL Pharma operates in pharmaceuticals with a focus on formulations and specialty products. Competitive advantage lies in established brand presence, diversified product portfolio, and consistent demand for essential medicines. However, profitability challenges and modest return ratios limit overall resilience.

📈 Entry Zone Recommendation: Current price (171 ₹) is below DMA 50 (186 ₹) and DMA 200 (198 ₹), showing technical weakness. RSI at 22.7 indicates oversold conditions, while MACD negative (-6.50) suggests bearish momentum. Entry zone: 165–175 ₹ for accumulation. Long-term holding is favorable only if profitability stabilizes and growth visibility improves.

Positive

• ✅ Low debt-to-equity ratio (0.12)
• ✅ PAT improved compared to previous quarter (113 Cr. → 196 Cr.)
• ✅ DII holdings increased (+0.64%)
• ✅ RSI oversold, offering potential entry opportunity

Limitation

• ⚠️ Modest ROE (9.74%) and ROCE (12.4%)
• ⚠️ EPS low (5.32 ₹) relative to valuation
• ⚠️ P/E slightly above industry average (32.2 vs 30.6)
• ⚠️ Dividend yield very low (0.08%)

Company Negative News

• 📉 Profit variation negative (-6.54%) despite higher PAT
• 📉 FII holdings decreased (-0.59%)
• 📉 Technical weakness with MACD negative (-6.50)

Company Positive News

• 📢 PAT improved quarter-on-quarter (113 Cr. → 196 Cr.)
• 📢 DII holdings increased (+0.64%)
• 📢 Strong trading volumes indicate investor interest

Industry

• 🌐 Industry P/E at 30.6, showing balanced sector valuations
• 🌐 Pharmaceuticals sector supported by consistent demand for essential medicines
• 🌐 Long-term growth driven by healthcare spending and global demand

Conclusion

🔎 PPL Pharma demonstrates moderate fundamentals with low debt and improving PAT, but weak return ratios and modest EPS limit attractiveness. Valuation is slightly above industry average, with technical weakness offering entry opportunities. Entry around 165–175 ₹ provides margin of safety, making it suitable for cautious long-term holding if profitability stabilizes.

Would you like me to extend this into a peer benchmarking overlay comparing PPL Pharma with pharma peers like Lupin, Torrent Pharma, and Divi’s Labs to highlight sector rotation opportunities?