SUNPHARMA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | SUNPHARMA | Market Cap | 4,33,872 Cr. | Current Price | 1,808 ₹ | High / Low | 1,851 ₹ |
| Stock P/E | 99.4 | Book Value | 99.2 ₹ | Dividend Yield | 0.88 % | ROCE | 16.8 % |
| ROE | 17.8 % | Face Value | 1.00 ₹ | DMA 50 | 1,724 ₹ | DMA 200 | 1,713 ₹ |
| Chg in FII Hold | -0.18 % | Chg in DII Hold | 0.28 % | PAT Qtr | 872 Cr. | PAT Prev Qtr | 564 Cr. |
| RSI | 63.0 | MACD | 2.98 | Volume | 49,60,661 | Avg Vol 1Wk | 1,49,37,644 |
| Low price | 1,547 ₹ | High price | 1,851 ₹ | PEG Ratio | 1.36 | Debt to equity | 0.56 |
| 52w Index | 85.9 % | Qtr Profit Var | -24.6 % | EPS | 16.7 ₹ | Industry PE | 30.1 |
📊 SUNPHARMA (Sun Pharmaceutical Industries Ltd.) shows strong return metrics with ROE of 17.8% and ROCE of 16.8%, supported by manageable debt-to-equity (0.56). However, valuations are stretched with a P/E of 99.4 compared to the industry average of 30.1, and PEG ratio of 1.36 indicates moderate overvaluation relative to growth. Sequential profit decline (-24.6%) raises concerns about earnings stability. Despite this, the company’s scale, global presence, and leadership in generics provide competitive strength.
💰 Ideal Entry Price Zone: ₹1,550 – ₹1,600 (aligned with valuation comfort and 200 DMA support).
📈 Exit / Holding Strategy: Hold for 3–5 years; consider partial profit booking near ₹1,850–₹1,900 resistance if valuations remain stretched without earnings support.
✅ Positive
- Strong ROE (17.8%) and ROCE (16.8%) highlight efficient capital use.
- Quarterly PAT improved YoY (₹872 Cr vs ₹564 Cr).
- Debt-to-equity ratio of 0.56 is manageable.
- Dividend yield of 0.88% adds stability.
- Stock trading above 50 DMA and 200 DMA reflects technical strength.
⚠️ Limitation
- High P/E (99.4) compared to industry average (30.1).
- PEG ratio of 1.36 indicates overvaluation relative to growth.
- Sequential profit decline (-24.6%) raises caution.
- FII holdings decreased (-0.18%), showing reduced foreign confidence.
📉 Company Negative News
- Sequential decline in quarterly profits despite revenue scale.
- Valuations remain stretched, limiting upside potential.
📈 Company Positive News
- Strong YoY profit growth demonstrates resilience.
- DII holdings increased (+0.28%), showing domestic institutional support.
- Global leadership in generics and specialty pharma strengthens competitive edge.
🏭 Industry
- Pharma industry trades at PE 30.1, offering moderate valuations.
- Sector supported by demand for generics, specialty drugs, and global healthcare expansion.
🔎 Conclusion
SUNPHARMA remains a strong long-term player with robust fundamentals and industry leadership. Entry near ₹1,550–₹1,600 offers valuation comfort. Long-term investors can hold for 3–5 years, but should monitor earnings growth and consider profit booking near ₹1,850–₹1,900 if valuations remain stretched.