Bajaj Healthcare (BAJAJHCARE)

FairStock Score: 36/100 — MIXED

Score breakdown: P/E: 2/3 · ROCE: 0/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• Revenue growth is strong at 31.30%, with latest quarter sales of ₹161 Cr.
• Debt/Equity of 0.49 is moderate and Piotroski F-Score of 7/9 suggests sound financial health.
• Promoter holding of 59.19% aligns management interests with minority shareholders.
• PEG of 1.02 indicates reasonable valuation if near-20% earnings growth materializes.
• Latest quarter net profit of ₹16 Cr shows positive absolute profitability.

Concerns

• Profit growth of 7.62% lags far behind sales growth of 31.30%, indicating margin compression.
• ROE of 11.17% and ROCE of 11.44% are mediocre for a pharmaceutical business.
• Dividend yield of only 0.30% means minority shareholders depend entirely on capital appreciation.
• FairStock Score of 42/100 and P/B of 2.38 leave limited margin of safety.

AI Analysis

Let me test Bajaj Healthcare the way I test any business: what is the return on capital, how durable is the moat, and does the price allow an average outcome to still work? At ₹332.70, the market cap is ₹1,041 Cr. The stated P/E is 19.90, which is not a deep value price. Book value is ₹139.91, so the stock costs 2.38 times book. I am not against paying a reasonable multiple if the business earns high returns. But here ROE is only 11.17% and ROCE 11.44%. Those are unremarkable numbers; a truly excellent pharmacy franchise should normally earn more on equity without high leverage. The balance sheet is acceptable: debt/equity of 0.49 is moderate, the Piotroski score of 7/9 supports financial health, and promoters hold 59.19%, so their interests are tied to ours. Yet the profit story is less convincing. Sales have grown 31.30%, but profits only 7.62%. That gap tells me growth is not yet translating into owner earnings. In the latest quarter, sales were ₹161 Cr and net profit ₹16 Cr; a roughly 10% margin, but quarterly numbers can be lumpy. The PEG ratio is 1.02. That looks fair only if the market's expected earnings growth, near 20%, arrives. The dividend yield of 0.30% gives no compensation while waiting. At 42/100, FairStock scores are mixed, and I agree. This is a company with momentum and a clean balance sheet, but not yet a compounding machine. I would need to see margins expand and ROE move comfortably above 15% before treating this as a wonderful business at a sensible price.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer