⚠ 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.
WELCORP - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | WELCORP | Market Cap | 19,439 Cr. | Current Price | 737 ₹ | High / Low | 995 ₹ |
| Stock P/E | 25.7 | Book Value | 180 ₹ | Dividend Yield | 0.68 % | ROCE | 18.2 % |
| ROE | 13.5 % | Face Value | 5.00 ₹ | DMA 50 | 790 ₹ | DMA 200 | 823 ₹ |
| Chg in FII Hold | -0.34 % | Chg in DII Hold | -0.34 % | PAT Qtr | 161 Cr. | PAT Prev Qtr | 231 Cr. |
| RSI | 42.0 | MACD | -18.5 | Volume | 2,71,801 | Avg Vol 1Wk | 6,79,031 |
| Low price | 664 ₹ | High price | 995 ₹ | PEG Ratio | 10.2 | Debt to equity | 0.21 |
| 52w Index | 21.9 % | Qtr Profit Var | 3.28 % | EPS | 47.4 ₹ | Industry PE | 18.7 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT declined from 231 Cr. to 161 Cr., showing short-term earnings pressure despite EPS of 47.4 ₹.
- Margins & Returns: ROCE at 18.2% and ROE at 13.5% indicate decent efficiency and profitability.
- Debt Ratios: Debt-to-equity at 0.21 reflects manageable leverage.
- Cash Flows: Dividend yield of 0.68% provides modest shareholder returns, supported by stable cash generation.
💹 Valuation Indicators
- P/E Ratio: 25.7 vs industry average of 18.7 → trades at a premium.
- P/B Ratio: Current Price / Book Value ≈ 4.1 → above intrinsic value.
- PEG Ratio: 10.2 → signals overvaluation relative to growth.
- Intrinsic Value: Current price (737 ₹) appears stretched compared to fundamentals.
🏢 Business Model & Competitive Advantage
- Operates in steel pipes and infrastructure solutions with strong domestic and export presence.
- Moderate efficiency ratios provide stability but not industry-leading performance.
- Low debt enhances resilience, though earnings volatility limits competitive strength.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between 700 ₹ – 720 ₹, near support levels.
- Long-Term Holding: Suitable for investors seeking exposure to infrastructure growth, but staggered buying recommended due to valuation risks.
✅ Positive
- ROCE (18.2%) and ROE (13.5%) show decent efficiency.
- Dividend yield of 0.68% provides shareholder value.
- EPS of 47.4 ₹ supports valuation strength.
⚠️ Limitation
- Quarterly PAT decline from 231 Cr. to 161 Cr. shows earnings pressure.
- High PEG ratio (10.2) signals overvaluation relative to growth.
- Premium valuation compared to industry peers.
📉 Company Negative News
- Stock trading below both 50 DMA (790 ₹) and 200 DMA (823 ₹), indicating weak momentum.
- RSI at 42.0 and negative MACD (-18.5) suggest bearish technical outlook.
- Decline in both FII (-0.34%) and DII (-0.34%) holdings shows reduced institutional confidence.
📈 Company Positive News
- EPS of 47.4 ₹ highlights earnings strength despite quarterly decline.
- Dividend yield provides modest but consistent returns.
🏭 Industry
- Industry P/E at 18.7 indicates sector trades at lower multiples.
- Steel and infrastructure sector benefits from government spending and export demand.
- WELCORP trades at a premium, reflecting brand strength but limited efficiency.
🔎 Conclusion
WELCORP demonstrates decent fundamentals with moderate efficiency and manageable debt, but trades at a premium compared to industry peers. Entry is advisable near 700 ₹ – 720 ₹ for long-term investors, with staggered accumulation to mitigate valuation risks. Overall, the company remains strategically positioned in the steel and infrastructure sector, though earnings volatility and technical weakness warrant caution.
I can also highlight support and resistance levels with RSI/MACD signals to refine entry timing for WELCORP if you’d like.