TORNTPHARM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | TORNTPHARM | Market Cap | 1,41,643 Cr. | Current Price | 4,185 ₹ | High / Low | 4,483 ₹ |
| Stock P/E | 63.4 | Book Value | 250 ₹ | Dividend Yield | 0.76 % | ROCE | 27.8 % |
| ROE | 26.2 % | Face Value | 5.00 ₹ | DMA 50 | 4,162 ₹ | DMA 200 | 3,871 ₹ |
| Chg in FII Hold | 0.05 % | Chg in DII Hold | -0.09 % | PAT Qtr | 584 Cr. | PAT Prev Qtr | 606 Cr. |
| RSI | 50.8 | MACD | -4.12 | Volume | 2,99,928 | Avg Vol 1Wk | 3,06,517 |
| Low price | 3,101 ₹ | High price | 4,483 ₹ | PEG Ratio | 2.61 | Debt to equity | 0.25 |
| 52w Index | 78.4 % | Qtr Profit Var | 20.4 % | EPS | 65.0 ₹ | Industry PE | 30.1 |
📊 TORNTPHARM demonstrates strong fundamentals with ROCE at 27.8% and ROE at 26.2%, reflecting excellent operational efficiency. EPS of 65.0 ₹ supports profitability, and dividend yield of 0.76% adds investor appeal. Debt-to-equity ratio of 0.25 indicates manageable leverage. However, valuation is stretched with P/E at 63.4 compared to industry average of 30.1, and PEG ratio of 2.61 suggests growth is priced at a premium. Quarterly PAT declined slightly (584 Cr. vs 606 Cr.), showing earnings pressure. Technical indicators (RSI 50.8, MACD -4.12) suggest neutral-to-weak momentum, though price remains above 200 DMA (3,871 ₹), confirming long-term strength.
💡 Entry Price Zone: Attractive accumulation between 4,150 ₹ – 4,200 ₹ near 50 DMA support. Buying above 4,300 ₹ carries valuation risk.
📈 Long-Term Holding Guidance: TORNTPHARM is fundamentally strong and suitable for long-term holding (3–5 years). Investors should monitor valuation multiples and earnings growth. Holding is justified if profitability sustains and pharma sector demand continues to expand.
Positive
- Strong ROCE (27.8%) and ROE (26.2%).
- EPS of 65.0 ₹ supports profitability.
- Dividend yield of 0.76% provides steady returns.
- Debt-to-equity ratio of 0.25 ensures financial stability.
- Stock trading above 200 DMA (3,871 ₹), confirming long-term strength.
Limitation
- High P/E (63.4) compared to industry average (30.1).
- PEG ratio of 2.61 indicates premium valuation relative to growth.
- Quarterly PAT declined (584 Cr. vs 606 Cr.).
- MACD negative (-4.12) shows weak short-term momentum.
- DII holdings decreased (-0.09%), showing domestic caution.
Company Negative News
- Marginal decline in quarterly profits.
- Valuation concerns with premium multiples.
- Weak short-term momentum indicators.
Company Positive News
- Strong fundamentals with high ROCE and ROE.
- EPS growth supports long-term confidence.
- Stock trading near 52-week high (4,483 ₹), reflecting investor optimism.
- FII holdings increased slightly (+0.05%).
Industry
- Industry PE at 30.1, much lower than TORNTPHARM’s 63.4, showing sector peers trade at cheaper valuations.
- Pharma sector benefits from defensive demand and global healthcare expansion.
Conclusion
✅ TORNTPHARM is fundamentally strong but technically mixed. Best suited for disciplined long-term investors who accumulate near 4,150–4,200 ₹. Exit opportunities may arise near 4,350–4,400 ₹ if momentum sustains. Conservative investors should manage risk carefully given stretched valuations and weak short-term indicators.
Would you like me to extend this into a pharma sector overlay HTML comparing TORNTPHARM with Sun Pharma, Dr. Reddy’s, and Cipla for peer benchmarking?