Why is Astrazeneca Pharma India Ltd falling/rising?

Short-Term Price Movement and Market Context

The stock’s decline on 26 December was marked by an intraday low of ₹8,820.35, representing a 3.74% drop from previous levels. The weighted average price indicates that a larger volume of shares traded closer to this low, suggesting selling pressure during the session. Despite this, the stock remains comfortably above its 200-day moving average, a key technical support level, though it is currently trading below its 5-day, 20-day, 50-day, and 100-day moving averages. This pattern often reflects short-term profit-taking or consolidation after recent gains.

Investor participation has increased, with delivery volumes on 24 December rising by 42.01% compared to the five-day average, indicating heightened trading activity. However, the stock underperformed its sector by 2.32% on the day, signalling relative weakness against peers in the pharmaceuticals segment.

Strong Historical Returns Outperforming Benchmarks

Despite the recent dip, Astrazeneca Pharma India Ltd has delivered exceptional returns over multiple time horizons. The stock has appreciated by 39.89% over the past year, significantly outpacing the Sensex’s 8.37% gain and the broader BSE500’s 5.76% return. Over three years, the stock’s rise of 169.26% dwarfs the Sensex’s 40.41% increase, underscoring the company’s sustained growth trajectory. Even on a five-year basis, the stock’s 106.14% gain surpasses the Sensex’s 81.04% appreciation.

This market-beating performance reflects investor confidence in the company’s fundamentals and growth prospects, despite short-term volatility.

Robust Financial Health and Operational Efficiency

Astrazeneca Pharma India Ltd’s financial metrics reinforce its strong position. The company boasts a high return on equity (ROE) of 21.62%, indicating efficient utilisation of shareholder capital. Its debt-to-equity ratio remains at zero on average, highlighting a conservative capital structure with minimal leverage risk.

Operational cash flow for the year stands at a healthy ₹65.36 crores, while the dividend per share has reached a peak of ₹32.00, signalling consistent shareholder returns. Profit after tax (PAT) for the latest six months totals ₹114.26 crores, reflecting a robust growth rate of 35.70%. These figures demonstrate the company’s ability to generate strong earnings and cash flows, supporting its valuation.

Shareholding and Market Liquidity

The majority of Astrazeneca Pharma India Ltd’s shares are held by promoters, which often suggests stable ownership and alignment with long-term company interests. Liquidity remains adequate, with the stock’s trading volume supporting transactions up to ₹0.07 crores without significant price impact, making it accessible for active traders and institutional investors alike.

Conclusion: Temporary Setback Amid Strong Fundamentals

The recent decline in Astrazeneca Pharma India Ltd’s share price on 26 December appears to be a short-term correction rather than a reflection of deteriorating fundamentals. The stock’s underperformance relative to the sector and its movement below shorter-term moving averages suggest profit-taking or market consolidation after a period of strong gains.

However, the company’s impressive long-term returns, high management efficiency, zero debt, and consistent profitability provide a solid foundation for future growth. Investors should weigh the current dip against these positive factors and consider the stock’s overall resilience and market-beating performance when making investment decisions.

Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →