ASTERDM - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.3
| Stock Code | ASTERDM | Market Cap | 27,968 Cr. | Current Price | 540 ₹ | High / Low | 732 ₹ |
| Stock P/E | 84.8 | Book Value | 85.6 ₹ | Dividend Yield | 0.93 % | ROCE | 139 % |
| ROE | 200 % | Face Value | 10.0 ₹ | DMA 50 | 599 ₹ | DMA 200 | 593 ₹ |
| Chg in FII Hold | -0.26 % | Chg in DII Hold | -0.20 % | PAT Qtr | 58.9 Cr. | PAT Prev Qtr | 105 Cr. |
| RSI | 35.4 | MACD | -18.1 | Volume | 18,24,818 | Avg Vol 1Wk | 11,08,850 |
| Low price | 386 ₹ | High price | 732 ₹ | PEG Ratio | 0.28 | Debt to equity | 0.28 |
| 52w Index | 44.3 % | Qtr Profit Var | -11.7 % | EPS | 5.86 ₹ | Industry PE | 43.3 |
📊 Analysis: ASTERDM presents a mixed investment case. ROE at 200% and ROCE at 139% appear unusually high, likely due to accounting adjustments or low equity base, and may not be sustainable. Debt-to-equity at 0.28 is moderate, ensuring manageable leverage. EPS of ₹5.86 is modest, and dividend yield of 0.93% provides limited income support. The P/E of 84.8 is significantly higher than the industry average of 43.3, suggesting stretched valuations. The PEG ratio of 0.28 indicates undervaluation relative to growth, but quarterly PAT declined (₹58.9 Cr vs ₹105 Cr), raising concerns about earnings consistency. Technicals are weak: RSI at 35.4 (oversold zone), MACD negative (-18.1), and price below DMA 50 and DMA 200, signaling bearish undertone. Despite strong sectoral demand, fundamentals suggest caution.
💡 Entry Price Zone: Ideal accumulation range is between ₹480 – ₹510, closer to support levels, offering better valuation comfort.
⏳ Exit / Holding Strategy: If already holding, maintain a medium-term horizon (2–3 years) but monitor earnings recovery closely. Exit or partial profit booking should be considered near ₹700–₹720 resistance levels if profitability does not improve significantly.
Positive ✅
- Extraordinarily high ROE (200%) and ROCE (139%), though sustainability is questionable.
- PEG ratio of 0.28 indicates undervaluation relative to growth.
- Debt-to-equity ratio of 0.28 is moderate and manageable.
- Strong sectoral demand in healthcare services.
Limitation ⚠️
- Extremely high P/E (84.8) compared to industry average (43.3).
- EPS of ₹5.86 is modest relative to price.
- Dividend yield of 0.93% is limited.
- Quarterly PAT declined (-11.7%), raising concerns about earnings stability.
- Weak technicals: RSI oversold, MACD negative, price below DMA levels.
- FII (-0.26%) and DII (-0.20%) holdings decreased, showing reduced institutional confidence.
Company Negative News 📉
- Recent quarterly profit decline highlights operational weakness.
Company Positive News 📈
- Strong long-term demand in healthcare sector supports growth potential.
- PEG ratio suggests undervaluation relative to growth despite high P/E.
Industry 🌐
- Industry P/E at 43.3 indicates moderate valuation levels.
- Healthcare sector benefits from rising demand and structural growth opportunities.
Conclusion 📝
ASTERDM is a moderately attractive stock with strong sectoral tailwinds but faces challenges with stretched valuations, declining profits, and questionable sustainability of ROE/ROCE figures. Investors should accumulate cautiously near ₹480–₹510 for better risk-reward. Existing holders should maintain a 2–3 year horizon, with partial profit booking near ₹700–₹720 resistance levels unless profitability metrics improve significantly.