AKUMS - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.2

📊 Fundamental Analysis Summary

Akums Drugs & Pharmaceuticals (AKUMS) presents a compelling case for long-term investment, especially for growth-focused investors. The company combines strong profitability, minimal debt, and an attractive PEG ratio, indicating undervaluation relative to its earnings growth. Despite recent price correction, fundamentals remain robust.

Metric Value Interpretation

P/E Ratio 26.6 Reasonably valued vs. industry PE of 34.0

PEG Ratio 0.54 Undervalued relative to growth — strong long-term signal

ROE / ROCE 17.2% / 16.2% Solid capital efficiency — supports sustainable returns

Dividend Yield 0.00% No dividends — reinvestment-focused growth strategy

Debt-to-Equity 0.03 Virtually debt-free — low financial risk

EPS ₹21.5 Strong earnings base — supports valuation

PAT Growth (QoQ) +458% Exceptional — signals earnings breakout

Book Value ₹194 Price-to-book ~2.8× — reasonable for pharma sector

RSI / MACD 46.4 / -6.93 RSI neutral; MACD negative — short-term weakness, long-term opportunity

FII/DII Change -1.53% / +1.46% FII selling — sentiment risk; DII accumulation — positive

52W Price Range ₹405 – ₹1,176 Currently near lower end — attractive accumulation zone

📉 Ideal Entry Price Zone

Given the strong fundamentals and technical support

Entry Zone: ₹510 – ₹540

Near 50-DMA and close to recent support levels.

Accumulate gradually, especially if RSI remains below 50 and MACD flattens.

🧭 Exit Strategy & Holding Period

Holding Period

3–5 years to benefit from compounding earnings and sector tailwinds.

Exit Strategy

Consider partial exit if price exceeds ₹700–₹750 without corresponding improvement in EPS or ROCE.

Reassess if PEG rises above 1.2 or PAT growth stagnates.

Key Metrics to Monitor

PAT consistently above ₹140–₹150 Cr per quarter

ROCE improving to 18%+

PEG ratio staying below 1.0

🧠 Final Thoughts

Akums is a fundamentally strong mid-cap pharma stock with excellent growth potential and low valuation risk. It’s well-suited for long-term investors seeking quality at a reasonable price.

Would you like a side-by-side comparison with peers like Eris Lifesciences or Caplin Point to explore similar high-growth pharma opportunities?

Edit in a page