An Empirical Study on Forecasting Share Value of Indian Pharmaceutical Companies Using Equity Valuation Models

The Indian Stock Market is considered to be Semi-Strong in nature and envisaged as the most respected Stock Market of Asian Continent. The information in this market is comprehensive and widely disseminated, thereby allowing each stock’s price to adjust rapidly in a manner which is unbiased. Market sentiments play a major role in predicting share price movements in India. Majority of the events affects economy as a whole, while some events are sector specific and affects a particular sector only. This article has made an attempt to estimate the share value of three major Pharmacy Companies of India by using Equity Valuation Models. The price of any security represents consensus between two parties, that is, the seller and the buyer. It is the price at which one person agrees to buy and another person agrees to sell. The price at which an investor is willing to buy or sell depends primarily on his expectations. If he expects that the price of a particular share is going to go up then he will buy it, vice-versa is true for sale. These simple statements are the root cause of a major challenge, that is, forecasting the share prices, because they refer to human expectations and anticipations, which leads to speculation. In this work of research the value of equity is predicted based on the data collected from a highly reliable source CRISIL. The study has attempted to compare the values of top three Pharmacy companies of 2026, Sun Pharma, Dr.Reddy Labs and Cipla. The study has extensively used different Equity Valuation models with emphasis on Dividend Discount Model. Based on the current study various recommendations are made to the investors to buy/sell or hold the respective shares.