Valuation Metrics and Recent Changes
As of 19 Feb 2026, Medico Remedies Ltd’s P/E ratio stands at 33.43, a figure that, while still elevated relative to some peers, has moderated enough to warrant a reclassification from expensive to fair valuation. The company’s price-to-book value ratio is 5.80, indicating a premium over book value but consistent with sector norms for mid-sized pharmaceutical firms. Other valuation multiples such as EV to EBIT (29.54) and EV to EBITDA (24.08) also suggest a premium, though these have shown signs of stabilisation compared to previous periods.
The PEG ratio, a measure that adjusts the P/E ratio for earnings growth, is currently at 1.08, signalling that the stock’s price is reasonably aligned with its growth prospects. This is a significant improvement from prior levels that contributed to the expensive rating. The company’s return on capital employed (ROCE) and return on equity (ROE) remain robust at 15.85% and 17.35% respectively, underscoring operational efficiency and shareholder value creation despite recent market headwinds.
Comparative Peer Analysis
When benchmarked against key competitors within the Pharmaceuticals & Biotechnology sector, Medico Remedies’ valuation appears more balanced. For instance, Bliss GVS Pharma, rated as fair, trades at a P/E of 21.99 and EV to EBITDA of 16.23, both lower than Medico Remedies but reflective of differing growth trajectories and market capitalisation. Conversely, companies such as Shukra Pharma and NGL Fine Chem remain very expensive, with P/E ratios exceeding 40 and EV to EBITDA multiples near or above 50, indicating heightened investor expectations or speculative premiums.
Interestingly, Kwality Pharma, classified as expensive, has a P/E of 26.15 and EV to EBITDA of 14.91, suggesting that Medico Remedies’ recent valuation shift places it in a more competitive position relative to these peers. Meanwhile, firms like TTK Healthcare, deemed attractive, trade at significantly lower multiples (P/E 19.07) but may differ in scale and growth potential.
Handpicked from 50, scrutinized by experts – Our recent selection, this Mid Cap from Bank - Public, is already delivering results. Don't miss next month's pick!
- - Expert-scrutinized selection
- - Already delivering results
- - Monthly focused approach
Price Performance and Market Context
Medico Remedies’ current market price is ₹46.73, down 2.30% on the day, with a 52-week high of ₹68.85 and a low of ₹35.00. The stock’s recent price action reflects broader sector volatility and investor caution. Year-to-date, the stock has declined by 7.58%, underperforming the Sensex’s modest 1.74% loss over the same period. Over the past year, the stock has suffered a significant 28.68% decline, contrasting sharply with the Sensex’s 10.22% gain, highlighting sector-specific challenges or company-specific concerns.
Longer-term returns paint a more nuanced picture. Over five years, Medico Remedies has delivered an impressive 853.67% return, vastly outperforming the Sensex’s 63.15% gain. However, the three-year return remains negative at -27.44%, indicating recent headwinds that have tempered investor enthusiasm. This divergence suggests that while the company has demonstrated strong growth historically, recent valuation adjustments and market dynamics have impacted sentiment.
Quality and Financial Health Indicators
Despite valuation pressures, Medico Remedies maintains solid financial health. The company’s ROCE of 15.85% and ROE of 17.35% are indicative of efficient capital utilisation and profitability. These metrics compare favourably within the sector, where operational efficiency is critical given the competitive and regulatory environment. The absence of a dividend yield reflects the company’s reinvestment strategy, prioritising growth and innovation over immediate shareholder payouts.
Enterprise value multiples such as EV to capital employed (5.14) and EV to sales (2.09) further support the notion that the stock is fairly valued relative to its asset base and revenue generation capacity. These ratios suggest that investors are paying a reasonable premium for the company’s earnings and growth potential, aligning with the recent downgrade from expensive to fair valuation.
Implications for Investors
The shift in valuation grade from expensive to fair signals a recalibration of market expectations. For investors, this presents a nuanced opportunity: while the stock is no longer considered overpriced, it is not yet classified as undervalued or attractive. The current P/E of 33.43, though lower than prior levels, still implies a premium relative to some peers, necessitating careful consideration of growth prospects and risk factors.
Investors should weigh Medico Remedies’ strong historical returns and solid financial metrics against recent price underperformance and sector volatility. The company’s operational efficiency and growth trajectory remain positive, but the stock’s relative underperformance versus the Sensex over the past year and three years suggests caution. A hold rating appears justified given the balance of valuation, quality, and market conditions.
Medico Remedies Ltd or something better? Our SwitchER feature analyzes this micro-cap Pharmaceuticals & Biotechnology stock and recommends superior alternatives based on fundamentals, momentum, and value!
- - SwitchER analysis complete
- - Superior alternatives found
- - Multi-parameter evaluation
Outlook and Market Positioning
Looking ahead, Medico Remedies’ valuation adjustment may attract investors seeking exposure to the Pharmaceuticals & Biotechnology sector at a more reasonable price point. The company’s mojo score of 58.0 and a mojo grade downgraded from Buy to Hold as of 30 Dec 2025 reflect this tempered optimism. Market participants will be closely monitoring upcoming earnings reports, regulatory developments, and sector trends to gauge whether the stock can regain momentum.
Given the competitive landscape, with peers ranging from very expensive to attractive valuations, Medico Remedies must continue to demonstrate consistent earnings growth and operational excellence to justify any upward re-rating. Its current market capitalisation grade of 4 indicates a mid-cap status, which often entails higher volatility but also greater growth potential compared to large-cap pharmaceutical giants.
Investors should also consider the broader market environment, including macroeconomic factors and sector-specific catalysts such as drug approvals, patent expiries, and R&D breakthroughs, which could influence valuation dynamics in the near term.
Conclusion
Medico Remedies Ltd’s transition from an expensive to a fair valuation grade marks a significant development in its market narrative. While the stock’s P/E and P/BV ratios remain elevated relative to some peers, the moderation in multiples and solid financial metrics support a more balanced view. The company’s strong historical returns and operational efficiency provide a foundation for potential recovery, but recent price underperformance and sector challenges counsel prudence.
For investors, the current valuation presents a cautious opportunity to hold the stock while monitoring key performance indicators and market signals. The downgrade to a Hold rating aligns with this stance, reflecting a need for further clarity before committing to a more bullish position.
Limited Period Only. Start at Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Get 71% Off →
