⚠ 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.
SUNPHARMA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | SUNPHARMA | Market Cap | 4,26,796 Cr. | Current Price | 1,780 ₹ | High / Low | 1,851 ₹ |
| Stock P/E | 97.8 | Book Value | 99.2 ₹ | Dividend Yield | 0.90 % | ROCE | 16.8 % |
| ROE | 17.8 % | Face Value | 1.00 ₹ | DMA 50 | 1,743 ₹ | DMA 200 | 1,712 ₹ |
| Chg in FII Hold | -0.43 % | Chg in DII Hold | 0.60 % | PAT Qtr | 872 Cr. | PAT Prev Qtr | 564 Cr. |
| RSI | 54.4 | MACD | 23.9 | Volume | 25,18,812 | Avg Vol 1Wk | 24,88,787 |
| Low price | 1,547 ₹ | High price | 1,851 ₹ | PEG Ratio | 1.34 | Debt to equity | 0.56 |
| 52w Index | 76.6 % | Qtr Profit Var | -24.6 % | EPS | 16.7 ₹ | Industry PE | 27.6 |
📊 Financial Overview
- Revenue & Profit Growth: Quarterly PAT rose from ₹564 Cr. to ₹872 Cr., but YoY profit variation shows -24.6%, indicating volatility.
- Margins: ROE at 17.8% and ROCE at 16.8% reflect strong profitability and efficient capital use.
- Debt: Debt-to-equity ratio of 0.56 is moderate, manageable for a large pharma company.
- Cash Flow: Stable due to diversified product portfolio and strong global presence.
💹 Valuation Indicators
- P/E Ratio: 97.8 vs Industry PE of 27.6 → significantly overvalued compared to peers.
- P/B Ratio: Current Price ₹1,780 vs Book Value ₹99.2 → ~17.9x, very high premium.
- PEG Ratio: 1.34 → indicates moderate valuation relative to growth.
- Intrinsic Value: Estimated fair value near ₹1,500–1,550, suggesting current price is overvalued.
🏭 Business Model & Competitive Advantage
- India’s largest pharmaceutical company with strong global footprint.
- Competitive advantage in specialty generics, branded formulations, and dermatology.
- Strong R&D pipeline and acquisitions enhance long-term growth prospects.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive between ₹1,500–1,550, closer to intrinsic value.
- Long-Term Holding: Suitable for 5+ year horizon; strong fundamentals but current valuation is stretched.
✅ Positive
- Strong ROE (17.8%) and ROCE (16.8%) highlight profitability.
- Quarterly PAT growth from ₹564 Cr. to ₹872 Cr. shows operational strength.
- DII holdings increased (+0.60%), reflecting domestic institutional confidence.
⚠️ Limitation
- Extremely high P/E ratio (97.8) compared to industry average.
- P/B ratio of ~17.9x indicates heavy premium valuation.
- Profit variation (-24.6%) highlights earnings volatility.
📉 Company Negative News
- FII holdings decreased (-0.43%), showing reduced foreign investor interest.
- High valuation multiples may limit near-term upside.
📈 Company Positive News
- Strong quarterly earnings improvement.
- DII holdings increased, showing domestic confidence.
- Robust global presence and diversified product portfolio.
🏭 Industry
- Pharma industry is defensive, driven by healthcare demand and global exports.
- Industry PE at 27.6 shows moderate valuation compared to Sun Pharma’s premium.
- Global demand for generics and specialty drugs supports long-term growth.
🔎 Conclusion
Sun Pharma remains a fundamentally strong pharmaceutical leader with robust profitability, global presence, and diversified product offerings. However, current valuations are stretched with P/E and P/B multiples far above industry averages. Entry around ₹1,500–1,550 offers better risk-reward. Long-term investors can hold for 5+ years, but near-term upside may be limited due to overvaluation.