Emcure Pharma (EMCURE)

FairStock Score: 70/100 — STEADY

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

Key Financials

Strengths

• Promoter holding of 77.87% aligns owner and minority interests
• Healthy balance sheet: debt-to-equity 0.35, Piotroski F-score 8/9, Altman Z-score 4.39
• Strong returns on capital: ROE 19.57% and ROCE 20.72%
• Positive free cash flow of ₹756 Cr with latest quarterly net profit of ₹231 Cr on sales of ₹2,363 Cr
• Momentum visible: sales growth 17.20% and profit growth 43.19%

Concerns

• Valuation is expensive: P/E 30.51, P/B 6.86, and EV/EBITDA 51.68
• No margin of safety versus Graham Number ₹500.66, with margin of safety at negative 190.72%
• Dividend yield is negligible at 0.21%
• Five-year revenue CAGR of only 9.42% makes the latest high growth rate unproven

AI Analysis

Emcure is a well-run pharmaceutical business with an impressive balance sheet, but the price today demands very high expectations for the future. Let's start with quality: ROE of 19.57%, ROCE of 20.72%, debt-to-equity of only 0.35, and free cash flow of ₹756 Cr show that operations are generating real money. The latest quarter sales of ₹2,363 Cr and net profit of ₹231 Cr indicate momentum, and profit growth of 43.19% on sales growth of 17.20% suggests operating leverage. Promoter holding at 77.87% aligns owner and minority interests. Piotroski F-score of 8/9 and Altman Z-score of 4.39 reinforce financial health. But a good business is not automatically a good investment. The price of ₹1,610.05 sets a P/E of 30.51 and P/B of 6.86; EV/EBITDA at 51.68 is far too rich for my taste. Graham's discipline would compare this to a Graham Number of ₹500.66, giving a margin of safety of negative 190.72%. Even with the DCF figure of ₹2,133.97, I would need a wide buffer, not a thin 32% cushion from an optimistic calculation. The five-year revenue CAGR of 9.42% reminds me that the recent 17% growth is an improvement, not a decade-long certainty. Dividend yield of 0.21% means the shareholder receives almost nothing while waiting. I can appreciate the earnings acceleration and PEG of 0.50, but PEG assumes the 43% profit growth is sustainable. I would let the company prove that. If the market gives a better price, closer to book value or below the DCF with a proper discount, I would be interested. Until then, quality is not enough; price is the deal.

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