ASTRAZEN - Investment Analysis

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

Investment Rating: 3.8

📊 Fundamental Analysis

AstraZeneca Pharma India (ASTRAZEN) is a high-quality pharma company with strong profitability but expensive valuations

ROE (23.6%) & ROCE (33.4%): Solid returns, though not as high as peers like Abbott India.

Debt-to-Equity (0.05): Virtually debt-free, which is excellent.

Dividend Yield (0.36%): Low yield, indicating reinvestment focus rather than income generation.

PEG Ratio (2.94): High, suggesting the stock is priced well above its earnings growth rate.

EPS (₹46.3): Decent, but not enough to justify the current P/E.

📈 Technical & Valuation Insights

Current Price: ₹8,894

52-Week Range: ₹6,220 – ₹10,691

DMA 50 / DMA 200: ₹8,995 / ₹8,043 — trading near 50 DMA, slightly above 200 DMA.

RSI (44.9): Neutral zone, not overbought.

MACD (-20.8): Negative, indicating short-term weakness.

Stock P/E (127) vs Industry P/E (32): Extremely overvalued.

🟢 Ideal Entry Price Zone

Given the high valuation and technical indicators

₹7,800 – ₹8,200: Ideal entry zone based on support near 200 DMA and historical buying interest.

₹7,500: Strong support zone if broader market corrects.

Avoid entering at current levels unless there's a breakout with volume above ₹9,200.

🧭 Long-Term Outlook

Growth Drivers

Oncology and respiratory portfolios.

Strong pipeline with multiple Phase III trials.

Strategic shift toward R&D and global capability centers

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Risks

Manufacturing exit from India may impact margins

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PEG ratio nearing 3.0 — signals overvaluation.

Dividend yield too low for income-focused investors.

🛑 Exit Strategy (If Already Holding)

If you're already invested

Holding Period: 3–5 years max unless PEG improves and EPS accelerates.

Exit Triggers

PEG > 3.2 with stagnant EPS.

ROE drops below 20%.

Price exceeds ₹10,500 without earnings support — consider partial profit booking.

Trailing Stop-Loss: ₹8,200 to protect downside.

🧠 Final Verdict

AstraZeneca Pharma India is a premium pharma play with strong fundamentals but stretched valuations. It’s not an ideal fresh buy at current levels. Wait for a dip into the ₹7,800–₹8,200 zone. If holding, monitor earnings growth and PEG ratio closely. Consider trimming if valuation continues to outpace fundamentals.

Would you like a side-by-side comparison with Abbott India or Dr. Reddy’s to see which offers better long-term value?

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timesofindia.indiatimes.com

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