TORNTPHARM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | TORNTPHARM | Market Cap | 1,52,041 Cr. | Current Price | 4,494 ₹ | High / Low | 4,556 ₹ |
| Stock P/E | 68.1 | Book Value | 250 ₹ | Dividend Yield | 0.71 % | ROCE | 27.8 % |
| ROE | 26.2 % | Face Value | 5.00 ₹ | DMA 50 | 4,270 ₹ | DMA 200 | 3,944 ₹ |
| Chg in FII Hold | 0.05 % | Chg in DII Hold | -0.09 % | PAT Qtr | 584 Cr. | PAT Prev Qtr | 606 Cr. |
| RSI | 61.9 | MACD | 69.4 | Volume | 2,13,107 | Avg Vol 1Wk | 2,91,975 |
| Low price | 3,102 ₹ | High price | 4,556 ₹ | PEG Ratio | 2.80 | Debt to equity | 0.25 |
| 52w Index | 95.7 % | Qtr Profit Var | 20.4 % | EPS | 65.0 ₹ | Industry PE | 30.5 |
📊 Core Financials
Revenue Growth: PAT slightly declined (₹584 Cr vs ₹606 Cr), showing stable but slowing growth.
Profit Margins: Strong margins supported by pharma operations.
Debt Ratios: Debt-to-equity 0.25, manageable leverage.
Cash Flows: Consistent positive operating cash flows from pharma sales.
Return Metrics: ROCE 27.8%, ROE 26.2% — excellent efficiency and shareholder returns.
💹 Valuation Indicators
P/E Ratio: 68.1, significantly above industry average (30.5), indicating premium valuation.
P/B Ratio: ~18.0 (Price ₹4494 / Book Value ₹250), expensive.
PEG Ratio: 2.80, stretched relative to growth.
Intrinsic Value: Fair value closer to ₹3800–4000, current price overvalued.
Dividend Yield: 0.71%, modest.
🏢 Business Model & Competitive Advantage
Operates in pharmaceuticals, generics, and specialty medicines.
Strong presence in cardiovascular, CNS, and oncology segments.
Competitive edge: diversified portfolio, strong R&D, and global reach.
Challenges: high valuations, regulatory risks, and competition from peers.
📈 Entry Zone & Long-Term Guidance
Entry Zone: ₹3800–4000 (value zone near intrinsic).
Long-Term Holding: Suitable for investors seeking exposure to pharma growth, but only at lower valuations.
✅ Positive
Strong ROCE (27.8%) and ROE (26.2%).
Debt-to-equity low at 0.25.
PAT stable despite slight decline.
FII holdings increased (+0.05%).
⚠️ Limitation
Valuation stretched (P/E 68.1 vs industry 30.5).
Dividend yield modest (0.71%).
DII holdings decreased (-0.09%).
🚨 Company Negative News
PAT declined slightly (₹584 Cr vs ₹606 Cr).
RSI at 61.9 indicates near overbought zone.
Valuation multiples far above peers.
🌟 Company Positive News
Strong institutional support from FIIs.
Technical indicators supportive (MACD +69.4, trading above DMA 50 & 200).
Strong 52-week performance (+95.7%).
🏭 Industry
Pharma industry driven by global demand for generics, specialty drugs, and R&D innovation.
Industry PE ~30.5, TORNTPHARM trades at steep premium.
Growth drivers: healthcare demand, exports, and new drug launches.
📌 Conclusion
TORNTPHARM is a fundamentally strong pharma stock with excellent returns, low debt, and strong industry positioning. However, valuations are stretched, making it risky at current levels. Entry advisable only near ₹3800–4000. Long-term holding suitable for investors seeking exposure to pharma growth and global healthcare demand, provided they enter at value levels.
Would you like me to compare TORNTPHARM directly with Sun Pharma and Dr. Reddy’s to highlight relative strengths and valuations?