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TORNTPHARM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | TORNTPHARM | Market Cap | 1,35,316 Cr. | Current Price | 3,997 ₹ | High / Low | 4,125 ₹ |
| Stock P/E | 63.4 | Book Value | 250 ₹ | Dividend Yield | 0.80 % | ROCE | 27.8 % |
| ROE | 26.2 % | Face Value | 5.00 ₹ | DMA 50 | 3,871 ₹ | DMA 200 | 3,605 ₹ |
| Chg in FII Hold | 0.21 % | Chg in DII Hold | -0.12 % | PAT Qtr | 606 Cr. | PAT Prev Qtr | 551 Cr. |
| RSI | 55.8 | MACD | 34.1 | Volume | 1,29,205 | Avg Vol 1Wk | 3,09,844 |
| Low price | 2,886 ₹ | High price | 4,125 ₹ | PEG Ratio | 2.61 | Debt to equity | 0.25 |
| 52w Index | 89.7 % | Qtr Profit Var | 31.8 % | EPS | 62.3 ₹ | Industry PE | 29.0 |
📊 Core Financials
- Revenue Growth: Quarterly PAT improved from 551 Cr. to 606 Cr., showing strong growth momentum.
- Profit Margins: EPS at 62.3 ₹ reflects robust profitability.
- Debt Ratios: Debt-to-equity at 0.25, indicating moderate leverage and manageable risk.
- Cash Flows: Likely positive given consistent earnings and dividend payouts.
- Return Metrics: ROCE at 27.8% and ROE at 26.2% highlight excellent capital efficiency.
💹 Valuation Indicators
- P/E Ratio: 63.4, significantly higher than industry average (29.0), suggesting premium valuation.
- P/B Ratio: ~16.0 (Current Price / Book Value), expensive relative to book value.
- PEG Ratio: 2.61, indicates valuation is stretched compared to growth prospects.
- Intrinsic Value: Current price (3,997 ₹) trades above DMA 50 (3,871 ₹) and DMA 200 (3,605 ₹), reflecting bullish sentiment but limited margin of safety.
🏢 Business Model & Competitive Advantage
- TORNTPHARM operates in pharmaceuticals, with strong presence in chronic therapies and branded generics.
- Competitive advantage lies in diversified product portfolio, strong R&D, and established domestic and international markets.
- Efficient capital use and consistent profitability strengthen long-term resilience.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive near 3,700–3,800 ₹, closer to DMA 50, offering better risk-reward balance.
- Long-Term Holding: Suitable for investors seeking exposure to pharma growth. Strong fundamentals support holding, though valuation premium should be monitored.
Positive
- Quarterly PAT growth of 31.8% indicates strong operational performance.
- High ROCE (27.8%) and ROE (26.2%) reflect excellent capital efficiency.
- FII holdings increased (+0.21%), showing foreign investor confidence.
Limitation
- High P/E ratio compared to industry average.
- P/B ratio expensive at ~16.0.
- PEG ratio at 2.61 suggests valuation is stretched relative to growth.
Company Negative News
- DII holdings decreased (-0.12%), showing reduced domestic institutional support.
- Premium valuation may limit near-term upside.
Company Positive News
- Quarterly PAT improved from 551 Cr. to 606 Cr.
- Technical indicators show MACD positive and RSI stable at 55.8.
Industry
- Pharma industry trades at P/E of 29.0, much lower than TORNTPHARM’s valuation.
- Sector benefits from rising healthcare demand, chronic therapies, and global generic opportunities.
Conclusion
- TORNTPHARM is fundamentally strong with robust profitability, efficient capital use, and diversified business model.
- Valuation is stretched compared to industry, limiting near-term upside.
- Best suited for long-term investors seeking pharma exposure, with entry near 3,700–3,800 ₹ offering better value.
I can also prepare a peer comparison HTML table (Torrent Pharma vs Sun Pharma, Cipla, Dr. Reddy’s) to highlight relative valuation and efficiency metrics if you’d like.