SUMICHEM - Fundamental Analysis

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

Fundamental Rating: 3.6

📊 Core Financials Analysis

Profitability

Quarterly PAT: ₹99.6 Cr vs ₹87.0 Cr — decent growth, though Qtr Profit Var shows a decline (−9.23%), possibly due to seasonality or margin pressure.

ROE: 18.5% and ROCE: 24.7% — strong indicators of capital efficiency and operational strength.

EPS: ₹10.1 — modest relative to current price, suggesting valuation stretch.

Debt & Liquidity

Debt-to-equity: 0.02 — virtually debt-free, a major strength.

Dividend Yield: 0.20% — low, indicating reinvestment focus.

📉 Valuation Indicators

Metric Value Insight

P/E Ratio 61.2 Highly overvalued vs industry PE of 36.5

P/B Ratio ~10.4 Expensive on asset basis

PEG Ratio 10.8 Extremely high — growth not justifying valuation

Intrinsic Value Likely < ₹605 Price exceeds fair value based on earnings and growth

🧠 Business Model & Competitive Advantage

SUMICHEM (Sumitomo Chemical India) operates in agrochemicals, specialty chemicals, and public health solutions.

Strengths

Strong parentage (Sumitomo Japan)

Diversified product portfolio

High ROCE and low debt — operationally sound

Weaknesses

Valuation excess

Low dividend yield

Limited institutional activity (flat FII/DII change)

📌 Entry Zone Recommendation

RSI: 67.4 — approaching overbought zone.

MACD strongly positive — bullish momentum, but may be peaking.

Support Range: ₹520–₹550 is a better entry zone for long-term investors.

Avoid fresh entry above ₹610 unless earnings accelerate.

🕰️ Long-Term Holding Guidance

Hold if already invested, especially from lower levels.

Wait for valuation cool-off before adding more.

Long-term potential is solid due to sector tailwinds and strong fundamentals.

Monitor quarterly earnings and margin trends for sustained growth.

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