SUNPHARMA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.1

📊 Core Financials Overview

Profitability

ROE of 17.8% and ROCE of 16.8% reflect strong capital efficiency.

EPS of ₹20.0 supports robust earnings, though the P/E of 79.4 is more than double the industry average (33.4), indicating a premium valuation.

PAT dropped from ₹2,000 Cr to ₹936 Cr QoQ, but the 294% YoY profit variation suggests strong recovery momentum.

Balance Sheet Health

Debt-to-equity ratio of 0.46 is moderate and manageable for a global pharma company.

Book Value of ₹101 vs Current Price ₹1,649 → P/B ratio ~16.3, reflecting aggressive pricing.

Dividend Yield of 0.97% adds modest income appeal.

Cash Flow & Stability

PEG ratio of 1.08 suggests fair valuation relative to growth.

RSI at 59.5 and MACD negative indicate neutral-to-weak technical momentum, with potential for consolidation.

📉 Valuation Metrics

Metric Value Insight

P/E Ratio 79.4 Overvalued vs industry PE of 33.4

P/B Ratio ~16.3 Premium pricing

PEG Ratio 1.08 Fairly valued

Intrinsic Value ~₹1,450–₹1,500 Slightly below current price

Sun Pharma is moderately overvalued, but its fundamentals justify the premium.

💊 Business Model & Competitive Edge

Sector: Sun Pharmaceutical Industries Ltd is India’s largest pharma company and the fifth-largest specialty generic pharmaceutical firm globally.

Strengths

Diversified revenue streams: 30% from US formulations, 30% from India, 17% from emerging markets

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Strong presence in chronic therapies like cardiology, neurology, and gastroenterology

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Strategic acquisitions and R&D investments to expand specialty business

Challenges

High valuation multiples

Recent decline in FII holding (−0.70%) may reflect cautious sentiment

Sun Pharma’s scale, innovation, and global footprint give it a durable competitive edge in both branded and generic segments

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📌 Entry Zone Recommendation

Suggested Entry Range: ₹1,500–₹1,580

Below 200 DMA (₹1,677) and closer to intrinsic value

RSI and MACD suggest waiting for technical confirmation before entry

🧭 Long-Term Holding Guidance

Hold if Already Invested: Strong fundamentals and global leadership support long-term compounding.

Accumulate on Dips: Especially near ₹1,500 for better margin of safety.

Watchlist Triggers

EPS consistency and margin expansion

New specialty launches and regulatory approvals

Institutional accumulation

You can explore deeper insights on Invest Yadnya’s stock analysis or Ticker’s financial dashboard for more detailed breakdowns.

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