A popular metric among investors is the PE ratio. It remains one of the most popular valuation metrics as it provides an indication of whether a stock at its current market price is expensive or cheap. A high PE ratio means that a stock is expensive and its price may fall in the future. A low PE ratio means that a stock is cheap and its price may rise in the future.
Here are 3 multibagger stocks with a Price to Earnings (PE) ratio lesser than the industry PE:
Adani Power Limited
Adani Power is the largest private thermal power producer in India. The company along with its subsidiaries sells the power generated from these projects under a combination of long-term Power Purchase Agreements, Short term PPA and on a merchant basis.
The company has a Trailing Twelve Months (TTM) PE of 10.41 while the sectoral PE stands at 14.12. In addition to that, the Adani group company reported a revenue of Rs 7,043 Crore and a net profit of Rs 695 crore in Q2FY23.
The shares of Adani Power Limited declined by more than 1 percent on Wednesday morning to trade at Rs 276 levels. In a longer time frame, the stock has delivered a multibagger return of 159 percent in the year 2022.
Great Eastern Shipping Company Limited
The shares started the day by trading marginally lower at Rs 657 levels. The multibagger stock logged a return of 112 percent in a year’s time frame.
The Great Eastern Shipping Company Limited is India’s largest private-sector shipping company which mainly transports liquid, gas, and solid bulk products. It also provides offshore oilfield services with the principal activity of owning and/or operating offshore supply vessels and mobile offshore drilling rigs.
In Q2FY23, the company saw an increase in its revenue which stood at Rs 1,447 Crore, and reported a net profit of Rs 768 Crore. The company remains undervalued as the TTM PE of the stock is at 5.8 while the sectoral PE stands at 9.80.
Karur Vysya Bank Limited
The shares of the bank traded at Rs 47 apiece a year ago. On Wednesday the shares traded at Rs 108 a piece logging a multibagger return of 130 percent in a year.
Karur Vysya Bank is a Scheduled Commercial Bank that has completed more than 100 years of operation and is one of the leading banks in India. It provides services such as personal, corporate, and agricultural banking and services to NRIs and MSMEs.
The bank is undervalued as compared to the sector as its TTM PE stands at 9.97 while the sector PE stands at 26.45. The Net Interest Income of the bank was Rs 821 crore and the net profit was Rs 250 crore in Q2FY23.
Written by Anoushka Roy
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