ZYDUSLIFE - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.3
| Stock Code | ZYDUSLIFE | Market Cap | 89,746 Cr. | Current Price | 892 ₹ | High / Low | 1,059 ₹ |
| Stock P/E | 19.1 | Book Value | 215 ₹ | Dividend Yield | 1.23 % | ROCE | 30.6 % |
| ROE | 31.1 % | Face Value | 1.00 ₹ | DMA 50 | 910 ₹ | DMA 200 | 928 ₹ |
| Chg in FII Hold | -0.11 % | Chg in DII Hold | 0.12 % | PAT Qtr | 343 Cr. | PAT Prev Qtr | 1,157 Cr. |
| RSI | 43.3 | MACD | 4.65 | Volume | 10,00,761 | Avg Vol 1Wk | 11,02,968 |
| Low price | 836 ₹ | High price | 1,059 ₹ | PEG Ratio | 0.26 | Debt to equity | 0.35 |
| 52w Index | 25.2 % | Qtr Profit Var | -27.2 % | EPS | 46.2 ₹ | Industry PE | 30.1 |
📊 Financials: ZYDUSLIFE demonstrates strong fundamentals with ROCE at 30.6% and ROE at 31.1%, reflecting excellent capital efficiency. Debt-to-equity ratio is moderate at 0.35, manageable within industry norms. EPS of ₹46.2 supports profitability, though quarterly PAT declined (₹1,157 Cr → ₹343 Cr, -27.2%), highlighting earnings volatility. Cash flows remain stable given consistent profitability.
💹 Valuation: Current P/E of 19.1 is below industry average (30.1), suggesting undervaluation. PEG ratio of 0.26 indicates attractive growth potential at reasonable valuations. P/B ratio (~4.1) is fair relative to book value. Dividend yield of 1.23% adds moderate income support for investors.
🏢 Business Model & Advantage: ZYDUSLIFE operates in pharmaceuticals, benefiting from strong demand cycles, diversified product portfolio, and R&D capabilities. Competitive advantage lies in efficiency, scale, and sector resilience, though profit volatility remains a concern.
📈 Entry Zone: Attractive accumulation near ₹860–₹900 (close to support levels and undervaluation zone). Current price (₹892) is near fair entry, with resistance at ₹1,050–₹1,060.
⏳ Long-Term Holding: Strong candidate for 3–5 year horizon given superior fundamentals, undervaluation, and sector resilience. Partial profit booking advised near ₹1,050–₹1,060 resistance zones.
Positive
- High ROCE (30.6%) and ROE (31.1%)
- EPS of ₹46.2 supports profitability
- Dividend yield of 1.23%
- Valuation attractive (P/E 19.1 vs industry 30.1)
- DII holdings increased (+0.12%)
Limitation
- Quarterly PAT decline (-27.2%)
- Moderate debt-to-equity ratio (0.35)
- FII holdings decreased (-0.11%)
Company Negative News
- Profit volatility with sharp quarterly decline
- Reduced foreign investor confidence (FII -0.11%)
Company Positive News
- Strong efficiency metrics (ROCE and ROE above 30%)
- Domestic institutional inflows (+0.12%)
Industry
- Pharmaceutical sector trading at PE ~30.1
- ZYDUSLIFE trades at a discount, offering valuation advantage
Conclusion
ZYDUSLIFE is fundamentally strong with excellent efficiency, undervaluation relative to peers, and moderate dividend yield. Entry is ideal near ₹860–₹900, with profit booking advised near ₹1,050–₹1,060. Long-term investors can hold for 3–5 years, benefiting from sector resilience and strong fundamentals despite short-term profit volatility.