The price-to-earnings (P/E) ratio measures a company’s share price relative to its earnings per share (EPS). Often, the P/E ratio helps assess a company’s stock’s relative value. It’s handy for comparing a company’s valuation with its historical performance, other firms in its industry, or the overall market. Here are the 4 large-cap stocks currently trading below their 5-year median/average PE ratio to add to your watchlist.
Listed below are a few large-cap, fundamentally good companies that are trading below their 5-year median PE, which are worth looking at. Here are the following companies.
Tata Consultancy Services
TCS has a market cap of Rs 11,16,415 crores; the stock is trading at around Rs 3,085 and has an ROCE and ROE of 64.6% and 52.4%, respectively. The stock PE stands at around 22.2, whereas its 5-year median PE stands at 31.
Tata Consultancy Services is the flagship company and a part of the Tata group. It is an IT services, consulting and business solutions organisation that has been partnering with many of the world’s largest businesses in their transformation journeys for over 50 years. TCS offers a consulting-led, cognitively powered, integrated portfolio of business, technology and engineering services and solutions.
Life Insurance Corporation of India
With a market capitalisation of Rs 5,78,927 crore, the shares are trading at Rs 915, moving closer to its 52-week high of Rs 1,007.80. The average stock PE for 5 years is around 13.8, whereas it’s trading around a PE of 11.3.
LIC is the largest insurance provider company in India. It has a market share of above 60% in new business premium. The company offers participating insurance products and non-participating products like unit-linked insurance products, savings insurance products, term insurance products, health insurance, and annuity & pension products.
Dixon Technologies (India) Ltd
With a market cap of Rs 94,987 Crore , Dixon Technologies shares are trading at a price of Rs 15,697 . Its 5-year average PE is around 127.3, but the stock is currently at 73.4 PE . The ROCE and ROE are 40% and 32.8%, respectively.
Dixon Technologies (India) Limited, incorporated in 1993 , is an Electronic Manufacturing Services (EMS) company with operations in the electronic products vertical, such as consumer electronics, lighting, home appliances, closed-circuit television cameras (CCTVs), and mobile phones. It also undertakes reverse logistics operations. Besides, it manufactures security surveillance equipment, wearables & audibles, and AC-PCBs. Recently, it has entered a JV with Imagine Marketing Private Limited for designing and manufacturing wireless audio solutions in India
ABB India Ltd
With a market cap of Rs 1,07,644 Crore, ABB India shares are trading at Rs 5,080. The 5-year average PE is 101.4, which is almost half of its current PE of 61 . The shares have given a return of 370% over the last 5 years.
ABB India Limited is an integrated power equipment manufacturer supplying the complete range of engineering, products, solutions and services in areas of automation and power technology. The company is a subsidiary of ABB Ltd, a global leader in electrification and automation with operations in 100+ countries. It gains advantages from its parent company, including access to ABB’s centralised R&D facilities and more.
Written by Leon Mendonca
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