EMCURE - Investment Analysis: Buy Signal or Bull Trap?
Last Updated Time : 20 Dec 25, 07:05 am
Back to Investment ListInvestment Rating: 3.2
| Stock Code | EMCURE | Market Cap | 26,224 Cr. | Current Price | 1,383 ₹ | High / Low | 1,525 ₹ |
| Stock P/E | 60.6 | Book Value | 170 ₹ | Dividend Yield | 0.22 % | ROCE | 13.5 % |
| ROE | 11.6 % | Face Value | 10.0 ₹ | DMA 50 | 1,383 ₹ | DMA 200 | 1,332 ₹ |
| Chg in FII Hold | 0.43 % | Chg in DII Hold | 1.52 % | PAT Qtr | 118 Cr. | PAT Prev Qtr | 125 Cr. |
| RSI | 49.2 | MACD | 5.76 | Volume | 35,654 | Avg Vol 1Wk | 81,584 |
| Low price | 889 ₹ | High price | 1,525 ₹ | PEG Ratio | -4.47 | Debt to equity | 0.50 |
| 52w Index | 77.8 % | Qtr Profit Var | 35.3 % | EPS | 22.7 ₹ | Industry PE | 30.6 |
📊 Analysis: EMCURE shows moderate fundamentals with ROE at 11.6% and ROCE at 13.5%, which are below ideal compounding thresholds. Debt-to-equity at 0.50 indicates moderate leverage. EPS at 22.7 ₹ is decent, but valuation is stretched with P/E at 60.6 compared to industry average of 30.6. PEG ratio at -4.47 highlights weak growth-adjusted valuation. Dividend yield at 0.22% is minimal. Technicals show RSI at 49.2 (neutral), MACD positive (5.76), and price near both 50 DMA (1,383 ₹) and 200 DMA (1,332 ₹), suggesting consolidation. Quarterly PAT dipped slightly (125 Cr. to 118 Cr.), though YoY profit variance (+35.3%) indicates growth momentum. Overall, fundamentals are steady but valuations remain expensive.
💡 Entry Zone: Ideal entry would be in the 1,200–1,300 ₹ range, closer to valuation comfort and DMA support. Current price (1,383 ₹) is slightly above fair entry zone, making patience advisable for better risk-reward.
📈 Exit Strategy: If already holding, maintain positions for medium-term (18–24 months) given moderate ROE/ROCE and sector potential. Consider partial profit booking near 1,480–1,520 ₹ resistance if valuations stretch further. Long-term holding is not favorable unless profitability improves and valuation premium moderates.
Positive
- 📌 EPS at 22.7 ₹ reflects consistent profitability
- 📌 Quarterly profit variance (+35.3%) highlights growth momentum
- 📌 DII holding increased (+1.52%)
- 📌 MACD positive (5.76) indicates short-term bullish sentiment
Limitation
- ⚠️ Valuation premium: P/E 60.6 vs industry 30.6
- ⚠️ Weak ROE (11.6%) and ROCE (13.5%) below compounding thresholds
- ⚠️ PEG ratio (-4.47) highlights poor growth-adjusted valuation
- ⚠️ Dividend yield at 0.22% offers negligible returns
Company Negative News
- ❌ Quarterly PAT declined from 125 Cr. to 118 Cr.
- ❌ FII holding decreased (-0.43%)
Company Positive News
- ✅ DII holding increased (+1.52%)
- ✅ YoY profit variance (+35.3%) shows growth momentum
Industry
- 🏦 Industry PE at 30.6, sector moderately valued
- 🏦 Pharma sector remains resilient with global demand tailwinds
Conclusion
🔎 EMCURE is moderately attractive for medium-term investment but lacks strong long-term compounding potential due to stretched valuations and modest ROE/ROCE. Entry near 1,200–1,300 ₹ offers margin of safety. Existing holders can maintain positions for 18–24 months, targeting exits near 1,480–1,520 ₹ unless profitability improves significantly. Long-term holding is not recommended without stronger fundamentals and valuation moderation.
Would you like me to extend this into a peer benchmarking overlay comparing EMCURE against pharma peers like Divi’s Labs, Dr. Reddy’s, and Cipla to highlight relative valuation comfort zones?
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