Valuation Metrics and Recent Changes
Syschem’s current price-to-earnings (P/E) ratio stands at 28.76, a figure that has contributed to the downgrade of its valuation grade from attractive to fair as of 3 February 2026. This P/E multiple, while not excessive in absolute terms, is notably higher than some of its direct peers within the Pharmaceuticals & Biotechnology sector. For context, the company’s price-to-book value (P/BV) is 2.49, indicating a moderate premium over its net asset value.
Other valuation multiples include an enterprise value to EBIT (EV/EBIT) ratio of 22.30 and an EV to EBITDA of 16.98, both suggesting that the market is pricing Syschem at a premium relative to its earnings before interest, taxes, depreciation, and amortisation. The EV to capital employed ratio is 2.56, and EV to sales is 0.49, which are consistent with a fair valuation stance rather than an undervalued one.
Interestingly, the PEG ratio is exceptionally low at 0.01, signalling that the company’s earnings growth expectations are very high relative to its P/E. However, this metric alone has not been sufficient to maintain an attractive valuation grade, given other factors at play.
Comparative Analysis with Peers
When compared with peers, Syschem’s valuation appears more reasonable than some but less compelling than others. For instance, Stallion India and Sanstar are classified as very expensive, with P/E ratios of 60.07 and 82.18 respectively, and EV/EBITDA multiples soaring above 38 and 81. Conversely, companies like Gulshan Polyols and TGV Sraac are deemed very attractive, with P/E ratios of 23.92 and 7.66 and EV/EBITDA multiples below 11.
Platinum Industries and Jyoti Resins fall into the expensive category, with P/E ratios of 30.45 and 16.8, respectively, while I G Petrochems is considered very attractive despite a higher P/E of 34.57, likely due to its lower EV/EBITDA of 11.15. This spectrum of valuations within the sector highlights the nuanced positioning of Syschem, which now sits in the fair valuation bracket, reflecting a balance between growth prospects and market pricing.
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
Financial Performance and Returns
Syschem’s return metrics have been robust over the medium to long term, significantly outperforming the benchmark Sensex. The stock has delivered a staggering 620.02% return over five years compared to Sensex’s 63.46%, and an extraordinary 1,018.21% over ten years versus the Sensex’s 267.00%. Even in the shorter term, Syschem has outpaced the market, with a year-to-date return of 15.94% against the Sensex’s negative 1.16% and a one-year return of 23.80% compared to the Sensex’s 10.41%.
These returns underscore the company’s capacity to generate shareholder value despite the recent moderation in valuation appeal. The stock’s current price of ₹54.20, up 2.44% on the day, remains below its 52-week high of ₹62.00 but well above the 52-week low of ₹35.33, indicating a resilient price range amid market fluctuations.
Quality and Profitability Metrics
Syschem’s return on capital employed (ROCE) is 6.37%, and return on equity (ROE) stands at 8.64%. While these figures are modest, they reflect steady operational efficiency and profitability within the Pharmaceuticals & Biotechnology sector. The absence of a dividend yield suggests that the company is reinvesting earnings to fuel growth rather than distributing cash to shareholders, a factor that may influence valuation perceptions.
The company’s market capitalisation grade is 4, indicating a mid-cap status that often entails higher volatility but also greater growth potential compared to large-cap peers.
Sector and Market Context
The Pharmaceuticals & Biotechnology sector has witnessed varied valuation trends, with some companies commanding premium multiples due to strong growth prospects or niche market positions, while others trade at discounts reflecting operational challenges or subdued growth. Syschem’s shift from an attractive to a fair valuation grade aligns with a broader market reassessment of mid-cap stocks in this space, where investors are increasingly discerning about price versus growth potential.
Given the company’s solid historical returns and reasonable profitability metrics, the fair valuation rating suggests that the market is factoring in both the opportunities and risks inherent in the current economic and sectoral environment.
Syschem (India) 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
Investment Implications
For investors, the transition of Syschem’s valuation from attractive to fair signals a need for cautious optimism. While the company’s growth trajectory and historical returns remain impressive, the current multiples suggest that much of this potential is already priced in. The P/E ratio of 28.76, though not exorbitant, is elevated relative to some peers and historical averages, implying limited margin for multiple expansion.
Investors should weigh the company’s solid fundamentals and sector positioning against the risk of valuation compression, especially in a market environment where mid-cap stocks face heightened scrutiny. The low PEG ratio indicates that earnings growth expectations remain high, but realisation of these expectations will be critical to justify current prices.
Moreover, the absence of dividend yield and moderate profitability ratios suggest that capital appreciation remains the primary driver of returns, which may not suit all investor profiles.
Conclusion
Syschem (India) Ltd’s valuation adjustment from attractive to fair reflects a nuanced market view that balances its strong historical performance and growth prospects against current pricing and sector dynamics. While the stock continues to outperform the broader market and many peers, investors should approach with measured expectations, recognising that the premium valuation demands consistent execution and growth delivery.
As the Pharmaceuticals & Biotechnology sector evolves, Syschem’s ability to sustain its competitive edge and financial performance will be pivotal in determining whether its valuation can revert to more attractive levels or remain fairly priced in the near term.
Unlock special upgrade rates for a limited period. Start Saving Now →
