SUMICHEM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | SUMICHEM | Market Cap | 20,922 Cr. | Current Price | 419 ₹ | High / Low | 665 ₹ |
| Stock P/E | 38.6 | Book Value | 64.0 ₹ | Dividend Yield | 0.29 % | ROCE | 25.1 % |
| ROE | 18.8 % | Face Value | 10.0 ₹ | DMA 50 | 417 ₹ | DMA 200 | 458 ₹ |
| Chg in FII Hold | 0.04 % | Chg in DII Hold | 0.33 % | PAT Qtr | 86.2 Cr. | PAT Prev Qtr | 178 Cr. |
| RSI | 49.5 | MACD | 9.84 | Volume | 2,35,425 | Avg Vol 1Wk | 1,59,452 |
| Low price | 363 ₹ | High price | 665 ₹ | PEG Ratio | 7.70 | Debt to equity | 0.02 |
| 52w Index | 18.7 % | Qtr Profit Var | 2.27 % | EPS | 10.6 ₹ | Industry PE | 25.0 |
📊 SUMICHEM (Sumitomo Chemical India Ltd.) presents strong operational efficiency with ROCE of 25.1% and ROE of 18.8%, supported by a very low debt-to-equity ratio (0.02). However, valuations appear stretched with a high P/E of 38.6 compared to the industry average of 25.0, and an elevated PEG ratio of 7.70, signaling overvaluation relative to growth. Sequential PAT decline (₹178 Cr → ₹86.2 Cr) raises concerns about earnings stability. Despite this, institutional inflows (FII +0.04%, DII +0.33%) and technical support near 50 DMA (₹417) provide resilience.
💰 Ideal Entry Price Zone: ₹400 – ₹420 (aligned with 50 DMA support and valuation comfort).
📈 Exit / Holding Strategy: Hold for 2–4 years; consider partial profit booking near ₹460–₹480 resistance unless earnings growth accelerates.
✅ Positive
- Strong ROCE (25.1%) and ROE (18.8%) indicate efficient capital usage.
- Low debt-to-equity ratio (0.02) ensures financial stability.
- Stock trading near 50 DMA (₹417) and close to 200 DMA (₹458).
- Institutional support with FII (+0.04%) and DII (+0.33%) increases.
⚠️ Limitation
- High P/E (38.6) compared to industry average (25.0).
- Elevated PEG ratio (7.70) signals overvaluation relative to growth.
- Dividend yield of 0.29% is negligible.
- Sequential PAT decline (₹178 Cr → ₹86.2 Cr) raises caution.
📉 Company Negative News
- Profitability under pressure with sequential decline in quarterly earnings.
- Valuation stretched compared to peers.
📈 Company Positive News
- Strong ROCE and ROE metrics highlight operational efficiency.
- Institutional investors increasing stake, signaling confidence.
- Technical indicators (RSI 49.5, MACD 9.84) show balanced momentum.
🏭 Industry
- Chemicals sector trading at PE 25.0, offering moderate valuation levels.
- Industry supported by demand in agriculture and specialty chemicals.
🔎 Conclusion
SUMICHEM is a moderate candidate for long-term investment. Entry near ₹400–₹420 offers better valuation comfort. Hold for 2–4 years with profit booking near ₹460–₹480 resistance. While operational efficiency is strong, stretched valuations and declining profits limit upside unless earnings growth improves.