Valuation Metrics and Recent Grade Change
As of 19 Feb 2026, Prism Medico’s price-to-earnings (P/E) ratio stands at 19.00, while its price-to-book value (P/BV) is 0.77. These figures have contributed to a downgrade in the company’s overall Mojo Grade from Hold to Sell on 17 Nov 2025, with a current Mojo Score of 41.0. The valuation grade has shifted from very attractive to fair, signalling that the stock’s price no longer offers the same level of bargain compared to its historical valuation and sector peers.
The enterprise value to EBITDA (EV/EBITDA) ratio is 11.52, which is moderate but less compelling when juxtaposed with some peers in the healthcare and NBFC sectors. The PEG ratio, a measure of valuation relative to earnings growth, is exceptionally low at 0.04, suggesting that the market may be pricing in limited growth prospects or reflecting concerns about the company’s fundamentals.
Comparative Analysis with Industry Peers
When compared to its healthcare sector peers, Prism Medico’s valuation appears more conservative. For instance, Suraksha Diagnostics trades at a P/E of 43.61 with an “Attractive” valuation grade, while GPT Healthcare is rated “Very Attractive” with a P/E of 25.96. Other companies such as Gujarat Kidney and Lotus Eye Hospital command significantly higher valuations, with P/E ratios of 98.36 and 417.52 respectively, albeit with varying growth and profitability profiles.
Prism Medico’s P/E ratio is substantially lower than these peers, which could indicate undervaluation or reflect underlying operational challenges. Its EV/EBITDA ratio is also below many competitors, suggesting a more modest enterprise valuation relative to earnings before interest, taxes, depreciation and amortisation.
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Financial Performance and Profitability Concerns
Despite the reasonable valuation multiples, Prism Medico’s profitability metrics raise caution. The company’s latest return on capital employed (ROCE) is negative at -0.53%, indicating inefficiencies in generating returns from its capital base. Return on equity (ROE) is modest at 4.04%, which is low compared to industry standards and suggests limited shareholder value creation.
These figures may partly explain the market’s tempered enthusiasm, as reflected in the downgrade to a Sell rating. Investors typically favour companies with robust profitability and efficient capital utilisation, which Prism Medico currently lacks.
Stock Price Movement and Market Context
Prism Medico’s stock price closed at ₹19.11 on 19 Feb 2026, up 9.95% on the day, with a previous close of ₹17.38. The 52-week high and low stand at ₹24.80 and ₹11.62 respectively, indicating a wide trading range over the past year. The stock’s recent upward momentum contrasts with its longer-term performance, which has been disappointing relative to the broader market.
Over the past year, Prism Medico has delivered a 24.9% return, outperforming the Sensex’s 10.22% gain. However, over three and five years, the stock has declined by 44.61% and 38.26% respectively, while the Sensex surged 37.26% and 63.15% over the same periods. This divergence highlights the stock’s volatility and challenges in sustaining growth.
Valuation Shifts Reflect Changing Investor Sentiment
The transition from a very attractive to a fair valuation grade suggests that investors are reassessing Prism Medico’s risk-reward profile. While the stock’s P/E and P/BV ratios remain below many peers, the lack of strong profitability and capital efficiency weighs heavily on sentiment.
Moreover, the company’s PEG ratio of 0.04, while low, may reflect market scepticism about future earnings growth rather than an outright bargain. This contrasts with some peers who command higher multiples justified by stronger growth trajectories or superior financial health.
Outlook and Investor Considerations
For investors, the key question is whether Prism Medico can improve its operational performance to justify a re-rating. The current valuation suggests limited upside unless profitability and return metrics improve substantially. The downgrade to a Sell rating by MarketsMOJO reinforces the need for caution.
Investors should also consider the company’s position within the NBFC sector, which faces regulatory and credit challenges that could impact earnings visibility. Comparisons with healthcare peers further highlight the relative valuation discount, but also underline the importance of fundamental improvements.
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Conclusion: Valuation Fair but Fundamentals Lag
In summary, Prism Medico & Pharmacy Ltd’s valuation has shifted to a fair level, reflecting a more cautious market stance amid subdued profitability and capital efficiency. While the stock trades at relatively modest multiples compared to peers, the downgrade to a Sell rating and negative ROCE highlight underlying challenges.
Investors should weigh the company’s recent price gains against its longer-term underperformance and fundamental weaknesses. Unless operational improvements materialise, the stock’s price attractiveness may remain limited despite its current valuation.
Careful monitoring of financial results and sector developments will be essential for those considering exposure to Prism Medico within the NBFC space.
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