Synopsis:
PNB Housing, Welspun Corp, Sundram Fasteners, Kansai Nerolac Paints, and CAMS, these companies have a proven track record of strong returns, solid business models, and market leadership in their sectors. With current P/E ratios below their 5-year median levels, they may offer value for patient investors.

Some fundamentally strong companies with solid financials and proven track records are now trading below their historical valuation multiples. This means investors can access quality businesses at prices lower than what the market has typically paid in the past. Such situations are rare, as strong fundamentals usually command a premium.

1. PNB Housing Finance

PNB Housing Finance Ltd is a prominent housing finance company in India, providing a variety of home loan and property financing options. They cater to both individuals and businesses, offering loans for purchasing, constructing, repairing, or upgrading residential and commercial properties.

Additionally, the company provides plot loans, NRI loans, loans against property, lease rental discounting, and funding for real estate developers, along with home loan and fixed deposit products.

The stock is currently trading at an attractive P/E multiple of 11x, below its 5-Year Median P/E of 13.5x. It has delivered an ROE and ROCE of 12.27 percent and 9.46 percent respectively.

2. Welspun Corp

Welspun Corp Limited, headquartered in Mumbai, India, is one of the largest manufacturers of large-diameter pipes globally. The company also manufactures BIS-certified Steel Billets, TMT Rebars, Ductile Iron Pipes, Stainless Steel Pipes, Tubes, and Bars. It also acquired Sintex-BAPL, a market leader in water tanks and other plastic products.

The stock is currently trading at an attractive P/E multiple of 13.6x, below its 5-Year Median P/E of 14.2x. It has delivered an ROE and ROCE of 18.59 percent and 21.24 percent respectively.

3. Sundram Fasteners

Sundram Fasteners manufactures a wide range of automotive and industrial components, including fasteners, powertrain parts, pumps, and precision assemblies. Serving global markets across India, China, the Americas, and beyond, it caters to sectors like automotive, aerospace, defense, wind energy, and infrastructure. 

The stock is currently trading at an attractive P/E multiple of 38.3x, much below its 5-Year Median P/E of 43.7x. It has delivered an ROE and ROCE of 14.93 percent and 17.14 percent respectively.

Also Read: Stock under ₹100 skyrockets 15% after receiving order from Indian Army to supply FPV drones

4. Kansai Nerolac Paints

Kansai Nerolac Paints Limited provides a wide range of decorative and industrial paints, coatings, adhesives, waterproofing solutions, and construction chemicals in India. They cater to a variety of customers, including residential, commercial, automotive, industrial, and institutional sectors. Their product lineup features everything from wall paints and wood finishes to metal enamels and specialized coatings.

The stock is currently trading at an attractive P/E multiple of 31.2x, much below its 5-Year Median P/E of 52.3x. It has delivered an ROE and ROCE of 10.41 percent and 13.03 percent respectively.

5. Computer Age Management Services

Computer Age Management Services Limited (CAMS) is a leading mutual fund transfer agency in India that offers a wide range of digital platforms like MF Central, myCAMS, GoCORP, and digiLoan to serve individual and institutional investors, banks, and NBFCs. It also provides services for insurance repositories, account aggregation, digital payments, and KYC.

The stock is currently trading at an attractive P/E multiple of 43.3x, just below its 5-Year Median P/E of 45x. It has delivered a robust ROE and ROCE of 43.94 percent and 54.75 percent respectively.

In conclusion, these stocks are trading at prices lower than their historical valuations and have solid fundamentals, reliable business models, and strong positions in the market. This could be a great chance for long-term investors, but it’s crucial to take a close look at these businesses, understand the potential risks, and make sure they fit with your investment goals before jumping in to buy.

Written by Satyajeet Mukherjee

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