Hikal (HIKAL)
TurnaroundFairStock Score: 29/100 — RISKY
Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹217.99 |
| Market Cap | ₹2,687.83 Cr |
| P/E Ratio | 97 |
| ROCE | 9.85% |
| ROE | -1.08% |
| Dividend Yield | 0.46% |
| Profit Growth | 68.3% |
| Debt/Equity | — |
| Sales Growth | 37.3% |
| Promoter Holding | 68.85% |
| 52-Week Range | ₹146.25 — ₹282.7 |
| Sector | Pharmaceuticals & Biotechnology |
| Book Value | ₹97.4 |
Strengths
- High promoter holding of 68.85% aligns management with minority shareholders
- Sales growth of 10.41% shows topline momentum
- Piotroski F-Score of 7/9 suggests some fundamental improvements
- ROCE of 9.85% indicates positive operational capital efficiency
Concerns
- Latest quarter recorded a net loss of ₹6 Cr despite ₹494 Cr sales
- ROE is negative at -1.08%, so shareholder equity is not earning a return
- P/E of 97 and PEG of 2.00 leave no margin of safety
- FairStock Score of 26/100 flags overall riskiness
AI Analysis
At ₹187, Hikal asks me to pay ₹2,425 Cr for a business whose latest quarter lost ₹6 Cr on sales of ₹494 Cr. That immediately fails my first test: a decent return on equity. ROE is -1.08%; the company is destroying book value, not compounding it. Book value is ₹98.44, so the market price of ₹187 is 1.9 times tangible book for a subpar earner. Graham would call that speculation, not investment. The bulls will point to 86.63% profit growth and a 10.41% sales rise. I am not impressed. Growth from a depressed base is easy; the latest quarterly net loss tells me the earnings recovery is not yet real. The Piotroski F-score of 7/9 is mildly encouraging, suggesting some balance-sheet and operating improvements, but I do not buy a stock because seven of nine indicators flashed positive last year. What do I like? Promoter holding of 68.85% aligns owners with management. ROCE of 9.85% is above zero, though far from a wonderful business. A 0.71% dividend yield is minimal. The valuation is the killer. A P/E of 97 combined with a PEG of 2.00 says the market is already pricing flawless execution. With negative ROE and quarterly losses, I need a large margin of safety, not a high multiple. FairStock Score of 26/100 labels this risky, and I agree. If Hikal can string together several profitable quarters and push ROE solidly above its cost of capital, it could become interesting. At today's price, the risk-reward is poor. I will wait on the sidelines until earnings, not hope, justify the price.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer