Wockhardt (WOCKPHARMA)

FairStock Score: 26/100 — RISKY

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

Key Financials

Strengths

• Promoter holding of 49.09% aligns management with minority shareholders.
• Piotroski F-Score of 7/9 suggests recent improvement in financial health and profitability metrics.
• Moderate leverage with debt/equity at 0.54, not a highly distressed balance sheet.
• Latest quarter shows net profit of ₹61 Cr on ₹888 Cr sales, indicating a base-level earnings recovery.
• Profit growth of 384.30% from a low base shows operational turnaround momentum.

Concerns

• Extreme valuation: P/E 203.65, P/B 5.38, PEG 9.16, and Graham Number ₹66.33 vs price ₹1,441.10 leave no margin of safety.
• Weak capital efficiency: ROE 0.51% and ROCE 3.75% are far below acceptable thresholds.
• Free cash flow is deeply negative at ₹-802 Cr, and EV/EBITDA of 285.70 shows little earnings support for enterprise value.
• Top-line stagnation: 5-year revenue CAGR only 2.15%, while latest quarter sales ₹888 Cr is modest.

AI Analysis

Let's start with what I can measure. Wockhardt's return on equity is 0.51%, and its return on capital employed is 3.75%. A business earning a fraction of its capital is not a wonderful enterprise; it is a savings plan with bad math. The 384.30% profit growth looks impressive, but it springs from a tiny base—the trailing P/E of 203.65 and PEG of 9.16 tell you the market has already priced in many years of perfection. Meanwhile, the 5-year revenue CAGR is only 2.15%; latest quarter sales are ₹888 Cr and net profit ₹61 Cr, so underlying margin is thin. Graham would say the price of ₹1,441.10 is nowhere near a margin of safety. The Graham Number is ₹66.33; against the market price, the margin of safety is negative 1,953%. That is not a cushion—it is a cliff. The balance sheet is not broken: debt/equity 0.54 and Piotroski F-Score 7/9 show some improvement. But free cash flow is negative ₹802 Cr, and EV/EBITDA of 285.70 suggests operating earnings are nowhere close to justifying the enterprise value. Altman Z-Score of 2.75 sits in the caution zone. A 49.09% promoter stake is good, but promoter commitment can't replace economic returns. I do not chase a 203 P/E on 0.51% ROE. If Wockhardt can convert its profit recovery into durable cash flow and compound sales at a meaningfully higher rate, I'll pay attention. Until then, this looks like hope trading at a high price, not value investing.

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