Understanding the Current Rating
The Buy rating assigned to Fredun Pharmaceuticals Ltd indicates a positive outlook based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. This recommendation suggests that the stock is expected to deliver favourable returns relative to its peers and the broader market, making it an attractive option for investors seeking growth within the Pharmaceuticals & Biotechnology sector.
Quality Assessment
As of 23 January 2026, Fredun Pharmaceuticals holds an average quality grade. This reflects a stable operational foundation with consistent earnings growth and profitability. The company has demonstrated healthy long-term growth, with net sales increasing at an annual rate of 39.73% and operating profit expanding by 55.03%. Such figures underscore the firm’s ability to sustain and enhance its core business activities over time.
Valuation Perspective
The valuation grade for Fredun Pharmaceuticals is currently attractive. The stock trades at a discount compared to its peers’ average historical valuations, supported by a return on capital employed (ROCE) of 20.2%. Additionally, the enterprise value to capital employed ratio stands at a modest 3, signalling efficient use of capital relative to market value. The company’s price-to-earnings-growth (PEG) ratio of 0.7 further indicates that the stock is reasonably priced given its earnings growth potential, making it appealing for value-conscious investors.
Financial Trend and Performance
The financial grade is very positive, reflecting robust profitability and growth trends. The latest data shows that Fredun Pharmaceuticals has delivered net profit growth of 127.87%, with positive results declared for six consecutive quarters, including the most recent quarter ending September 2025. Operating profit to interest coverage is strong at 2.89 times, and profit before tax excluding other income reached ₹13.01 crores, growing at 71.64%. Net sales for the quarter stood at ₹145.30 crores, up 35.35%. These figures highlight the company’s improving earnings quality and operational efficiency.
Technical Analysis
From a technical standpoint, the stock is mildly bullish. As of 23 January 2026, Fredun Pharmaceuticals has delivered a remarkable 113.41% return over the past year, significantly outperforming the BSE500 index’s 7.24% return in the same period. Shorter-term performance shows some volatility, with a 12.01% decline over the past month and a 5.78% drop over three months, but a strong 66.12% gain over six months. The stock’s upward momentum and relative strength suggest continued investor interest and potential for further gains.
Market Capitalisation and Sector Context
Fredun Pharmaceuticals is classified as a microcap within the Pharmaceuticals & Biotechnology sector. Despite its smaller market capitalisation, the company’s growth trajectory and financial health position it favourably among peers. The sector itself remains a focus for investors due to ongoing innovation and demand for healthcare products, which supports the stock’s positive outlook.
Summary of Key Metrics as of 23 January 2026
- Mojo Score: 70.0 (Buy grade)
- Market Cap: Microcap
- Net Sales Growth (Annual): 39.73%
- Operating Profit Growth (Annual): 55.03%
- Net Profit Growth (Annual): 127.87%
- ROCE: 20.2%
- Enterprise Value to Capital Employed: 3
- PEG Ratio: 0.7
- 1-Year Stock Return: +113.41%
- Market Benchmark (BSE500) 1-Year Return: +7.24%
Transformation in full progress! This Micro Cap from Auto Ancillary just achieved sustainable profitability after tough times. Be early to witness this powerful comeback story!
- - Sustainable profitability reached
- - Post-turnaround strength
- - Comeback story unfolding
Implications for Investors
For investors, the Buy rating on Fredun Pharmaceuticals Ltd suggests a favourable risk-reward profile. The company’s strong financial trend and attractive valuation imply potential for continued earnings growth and capital appreciation. While the quality grade is average, the consistent quarterly performance and positive technical signals provide confidence in the stock’s momentum.
Investors should consider the stock’s microcap status, which can entail higher volatility and liquidity considerations. However, the company’s market-beating returns over the past year and solid fundamentals make it a compelling candidate for portfolios seeking exposure to the Pharmaceuticals & Biotechnology sector’s growth potential.
Conclusion
Fredun Pharmaceuticals Ltd’s current Buy rating by MarketsMOJO, last updated on 29 July 2025, is supported by a combination of attractive valuation, strong financial trends, and positive technical indicators as of 23 January 2026. This comprehensive assessment provides investors with a clear rationale for considering the stock as part of a diversified investment strategy focused on growth and value within the healthcare space.
Unlock special upgrade rates for a limited period. Start Saving Now →
