ASTRAZEN - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.7
| Stock Code | ASTRAZEN | Market Cap | 21,556 Cr. | Current Price | 8,609 ₹ | High / Low | 10,691 ₹ |
| Stock P/E | 93.2 | Book Value | 320 ₹ | Dividend Yield | 0.37 % | ROCE | 33.4 % |
| ROE | 23.6 % | Face Value | 2.00 ₹ | DMA 50 | 8,691 ₹ | DMA 200 | 8,637 ₹ |
| Chg in FII Hold | -0.03 % | Chg in DII Hold | 0.29 % | PAT Qtr | 58.1 Cr. | PAT Prev Qtr | 56.1 Cr. |
| RSI | 55.8 | MACD | -29.9 | Volume | 6,028 | Avg Vol 1Wk | 4,846 |
| Low price | 6,502 ₹ | High price | 10,691 ₹ | PEG Ratio | 2.16 | Debt to equity | 0.04 |
| 52w Index | 50.3 % | Qtr Profit Var | 51.3 % | EPS | 79.7 ₹ | Industry PE | 29.1 |
📊 Analysis: ASTRAZEN demonstrates strong profitability metrics with ROCE at 33.4% and ROE at 23.6%, reflecting efficient capital usage. Debt-to-equity is very low (0.04), ensuring financial stability. However, the stock trades at a steep P/E of 93.2 compared to the industry average of 29.1, indicating significant overvaluation. The PEG ratio of 2.16 further suggests growth is priced expensively. Dividend yield is modest at 0.37%, limiting income potential. Technical indicators (RSI 55.8, MACD negative) show neutral to slightly bearish momentum.
💰 Entry Price Zone: Ideal entry would be in the ₹6,800 – ₹7,200 range, closer to its 52-week low of ₹6,502, where valuations align better with fundamentals.
⏳ Exit Strategy / Holding Period: For existing holders, a long-term horizon (3–5 years) is reasonable given strong ROE/ROCE. Consider partial profit booking near ₹10,500–₹10,700 (52-week high zone) unless earnings growth accelerates to justify high valuations.
✅ Positive
- High ROCE (33.4%) and ROE (23.6%) indicate strong efficiency.
- Low debt-to-equity (0.04) ensures financial resilience.
- Quarterly profit growth (PAT up from 56.1 Cr. to 58.1 Cr.).
- EPS of ₹79.7 supports long-term earnings visibility.
- DII holdings increased (+0.29%), showing domestic confidence.
⚠️ Limitation
- Very high P/E (93.2) compared to industry average (29.1).
- PEG ratio of 2.16 signals expensive growth.
- Dividend yield of 0.37% is unattractive for income investors.
- FII holdings slightly reduced (-0.03%), showing cautious sentiment.
📉 Company Negative News
- No major negative news reported, but valuation concerns persist.
📈 Company Positive News
- Quarterly profit variation of 51.3% YoY indicates strong momentum.
- Stable earnings growth with consistent PAT improvement.
🏭 Industry
- Pharma sector trades at an average P/E of 29.1, much lower than ASTRAZEN’s valuation.
- Industry outlook remains positive with steady demand and innovation-driven growth.
🔎 Conclusion
ASTRAZEN is fundamentally strong but significantly overvalued at current levels. Long-term investors may hold with a 3–5 year horizon, while new investors should wait for a correction towards ₹6,800–₹7,200 before entering. Profit booking near highs is advisable unless earnings growth accelerates substantially.