Vasundhara Rasayans Ltd Valuation Shifts to Fair Amid Mixed Market Performance

Valuation Metrics and Recent Grade Change

As of 1 Feb 2026, Vasundhara Rasayans Ltd’s price-to-earnings (P/E) ratio stands at 10.75, a figure that has contributed to the company’s valuation grade being downgraded from “attractive” to “fair” on 17 Dec 2025. This P/E multiple, while moderate, is significantly lower than several peers in the Pharmaceuticals & Biotechnology sector, such as Stallion India, which trades at a P/E of 45.34, and Oriental Aromatics at 98.44. However, it is higher than some very attractively valued peers like TGV Sraac, which has a P/E of 7.69, and Indo Amines at 11.64.

The price-to-book value (P/BV) ratio for Vasundhara Rasayans is 1.37, indicating a valuation slightly above the company’s net asset value but still within a reasonable range for the sector. The enterprise value to EBITDA (EV/EBITDA) ratio is 11.79, which is moderate compared to peers such as Dhunseri Ventures at 1.71 and Stallion India at 29.00. These metrics collectively suggest that while the stock is no longer considered a bargain, it remains fairly valued relative to its earnings and asset base.

Financial Performance and Returns Analysis

Vasundhara Rasayans’ return metrics over various periods reveal a mixed performance. The stock has delivered a robust 10-year return of 304.35%, outperforming the Sensex’s 230.79% over the same period. However, more recent returns have been disappointing, with a 1-year loss of 49.41% compared to a 7.18% gain in the Sensex. Year-to-date, the stock is down 9.91%, underperforming the benchmark’s 3.46% decline.

Shorter-term returns also show volatility: an 8.19% gain over the past week contrasts with an 8.32% loss over the last month. This volatility reflects the stock’s sensitivity to sectoral and company-specific developments, as well as broader market sentiment.

Profitability and Efficiency Metrics

Profitability ratios provide further insight into the company’s valuation shift. Vasundhara Rasayans reports a return on capital employed (ROCE) of 10.75% and a return on equity (ROE) of 12.74%. These figures indicate moderate efficiency in generating returns from capital and equity, though they lag behind some peers with stronger profitability profiles. The dividend yield stands at 1.31%, offering a modest income component to investors.

Enterprise value to capital employed (EV/CE) and EV to sales ratios are 1.38 and 1.44 respectively, suggesting that the market values the company’s capital and sales at a reasonable premium. However, the PEG ratio is reported as 0.00, which may indicate either a lack of earnings growth or data unavailability, signalling caution for growth-oriented investors.

Peer Comparison and Sector Context

Within the Pharmaceuticals & Biotechnology sector, Vasundhara Rasayans’ valuation is positioned in the “fair” category, contrasting with peers that range from “very attractive” to “very expensive.” For instance, TGV Sraac and Indo Amines are rated “very attractive” with P/E ratios of 7.69 and 11.64 respectively, while companies like Fairchem Organic and Titan Biotech are considered “very expensive,” trading at P/E multiples of 139.46 and 33.37.

This spectrum of valuations highlights the diversity within the sector, driven by factors such as growth prospects, profitability, and market positioning. Vasundhara Rasayans’ moderate valuation suggests that while it is not a deep value play, it may offer a more balanced risk-reward profile compared to highly priced peers.

Price Movement and Market Capitalisation

The stock closed at ₹153.25 on 1 Feb 2026, up 5.58% from the previous close of ₹145.15. The day’s trading range was ₹150.00 to ₹153.40, reflecting some intraday volatility. The 52-week high and low stand at ₹307.95 and ₹129.95 respectively, indicating a significant price correction from the peak over the past year.

Vasundhara Rasayans holds a market cap grade of 4, reflecting its micro-cap status within the sector. This smaller market capitalisation often entails higher volatility and liquidity considerations, which investors should factor into their decision-making process.

Mojo Score and Analyst Ratings

Vasundhara Rasayans currently holds a Mojo Score of 26.0, categorised as a “Strong Sell” rating, upgraded from a previous “Sell” grade on 17 Dec 2025. This downgrade in sentiment reflects concerns over valuation, earnings growth prospects, and recent price underperformance relative to the broader market.

The strong sell rating signals caution for investors, suggesting that the stock may face headwinds in the near term. However, the company’s long-term return of 304.35% over ten years indicates potential for recovery if operational and market conditions improve.

Investment Implications and Outlook

Investors analysing Vasundhara Rasayans must weigh the fair valuation against the company’s mixed financial performance and sector dynamics. The shift from attractive to fair valuation suggests that the stock’s price no longer offers a compelling margin of safety, especially given the strong sell rating and recent negative returns.

Nonetheless, the stock’s moderate P/E and P/BV ratios relative to expensive peers may appeal to value-oriented investors seeking exposure to the Pharmaceuticals & Biotechnology sector at a reasonable price. The company’s profitability metrics, while not outstanding, provide a foundation for potential improvement if operational efficiencies and growth catalysts materialise.

Given the volatility and sector competition, a cautious approach is advisable. Monitoring quarterly earnings, sector trends, and peer valuations will be critical to reassessing the stock’s attractiveness over time.

Conclusion

Vasundhara Rasayans Ltd’s valuation adjustment from attractive to fair reflects a recalibration of market expectations amid mixed financial signals and sector pressures. While the stock remains reasonably priced compared to some peers, its strong sell rating and recent underperformance warrant prudence. Investors should consider the company’s long-term track record alongside current challenges before committing capital.

As the Pharmaceuticals & Biotechnology sector continues to evolve, Vasundhara Rasayans’ ability to improve profitability and growth will be key determinants of its future valuation and price attractiveness.

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