PEL - Investment Analysis

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

Investment Rating: 3.2

📊 Fundamental & Valuation Analysis

Metric Value Interpretation

Market Cap ₹29,398 Cr Mid-cap NBFC

P/E Ratio 56.5 Overvalued vs industry PE of 25.2

PEG Ratio -1.50 Negative PEG suggests unsustainable or volatile earnings growth

ROE 1.63%

1

Very weak return on equity

ROCE 6.78%

1

Below average capital efficiency

Dividend Yield 0.85%

2

Low but consistent payout

Debt to Equity 2.42 High leverage — financial risk present

📈 Price Trends & Technicals

Indicator Value Signal

Current Price ₹1,295 Near resistance zone

52W High/Low ₹1,352 / ₹848 Trading near 52W high — limited upside

DMA 50 / 200 ₹1,189 / ₹1,077 Trading above both — bullish

RSI 63.0 Approaching overbought zone

MACD 41.1 Bullish momentum

Volume Below average Weak participation

🎯 Ideal Entry Price Zone

Given the high valuation and weak fundamentals, ideal entry would be ₹1,050–₹1,150, closer to the 200 DMA and support zone. This offers better risk-reward for long-term investors.

🧭 Holding or Exit Strategy

If you already hold Piramal Enterprises Ltd (PEL)

Holding Period: Short to medium term (1–2 years) unless ROE/ROCE improve significantly.

Exit Strategy

Partial exit near ₹1,350–₹1,400 (resistance zone)

Full exit if ROE remains <5% and debt stays elevated

Re-enter only if PEG turns positive and earnings stabilize

✅ Long-Term Investment Verdict

Pros

Diversified NBFC with pharma legacy

Recent profit growth and bullish price breakout

Debt-funded expansion could yield returns if managed well

Cons

Weak ROE/ROCE and negative PEG ratio

High debt-to-equity ratio (2.42) — financial risk

Overvalued on P/E basis

Dividend yield too low to offset risk

Conclusion: PEL is a speculative long-term candidate with potential upside if earnings stabilize and debt reduces. Not ideal for conservative investors seeking consistent compounding.

Would you like a safer alternative in the NBFC space like Bajaj Finance or Cholamandalam?

1

www.screener.in

2

trendlyne.com

Edit in a page