⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
SUMICHEM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | SUMICHEM | Market Cap | 19,372 Cr. | Current Price | 388 ₹ | High / Low | 665 ₹ |
| Stock P/E | 35.7 | Book Value | 64.0 ₹ | Dividend Yield | 0.31 % | ROCE | 25.1 % |
| ROE | 18.8 % | Face Value | 10.0 ₹ | DMA 50 | 414 ₹ | DMA 200 | 472 ₹ |
| Chg in FII Hold | -0.28 % | Chg in DII Hold | 0.18 % | PAT Qtr | 86.2 Cr. | PAT Prev Qtr | 178 Cr. |
| RSI | 41.4 | MACD | -8.52 | Volume | 4,51,458 | Avg Vol 1Wk | 3,37,915 |
| Low price | 367 ₹ | High price | 665 ₹ | PEG Ratio | 7.13 | Debt to equity | 0.02 |
| 52w Index | 7.22 % | Qtr Profit Var | 2.27 % | EPS | 10.6 ₹ | Industry PE | 22.2 |
📊 Financial Overview
- Revenue & Profit Growth: Quarterly PAT dropped from ₹178 Cr. to ₹86.2 Cr., showing earnings pressure.
- Margins: ROE at 18.8% is strong, while ROCE at 25.1% reflects excellent capital efficiency.
- Debt: Debt-to-equity ratio of 0.02 indicates negligible leverage, a positive for financial stability.
- Cash Flow: Healthy due to low debt and strong operational efficiency, though profit volatility is a concern.
💹 Valuation Indicators
- P/E Ratio: 35.7 vs Industry PE of 22.2 → expensive relative to peers.
- P/B Ratio: Current Price ₹388 vs Book Value ₹64 → ~6.06x, reflecting premium valuation.
- PEG Ratio: 7.13 → suggests overvaluation relative to growth.
- Intrinsic Value: Estimated fair value near ₹340–360, indicating current price is slightly overvalued.
🏭 Business Model & Competitive Advantage
- Operates in agrochemicals and specialty chemicals with diversified product portfolio.
- Strong ROCE highlights efficient use of capital.
- Competitive advantage lies in innovation, niche chemical products, and global partnerships.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive between ₹340–360, closer to intrinsic value.
- Long-Term Holding: Suitable for investors seeking exposure to specialty chemicals, but caution advised due to high valuation and profit volatility.
✅ Positive
- Strong ROCE at 25.1% and ROE at 18.8% indicate efficient capital use and shareholder returns.
- Negligible debt (0.02 debt-to-equity) ensures financial stability.
- DII holdings increased (+0.18%), showing domestic institutional confidence.
⚠️ Limitation
- High P/E ratio (35.7) compared to industry average.
- PEG ratio of 7.13 signals overvaluation relative to growth.
- Quarterly PAT decline highlights earnings volatility.
📉 Company Negative News
- Sharp drop in quarterly profits from ₹178 Cr. to ₹86.2 Cr.
- FII holdings decreased (-0.28%), showing reduced foreign investor confidence.
📈 Company Positive News
- Strong ROCE and ROE metrics despite profit decline.
- DII holdings increased, reflecting domestic support.
- Low debt levels provide resilience against market volatility.
🏭 Industry
- Specialty chemicals industry is growing, driven by agriculture and industrial demand.
- Industry PE at 22.2 shows moderate valuation compared to SUMICHEM’s premium.
- Global demand for agrochemicals supports long-term growth potential.
🔎 Conclusion
SUMICHEM demonstrates strong operational efficiency with excellent ROCE and ROE, backed by negligible debt. However, high valuation multiples and declining quarterly profits limit near-term attractiveness. Entry around ₹340–360 offers better risk-reward. Long-term holding is viable for investors seeking exposure to specialty chemicals, but caution is advised due to earnings volatility and premium valuation.