The PEG ratio, which stands for Price/Earnings to Growth ratio, is a financial measure determined by dividing a stock’s Price-to-Earnings (P/E) ratio by the anticipated rate of the company’s earnings growth within a specified period.
If the PEG ratio is low, it might mean the stock is a good value. In competitive industries such as FMCG, IT, and pharma, utilising the PEG ratio can be a valuable tool for identifying undervalued stocks. Here are 2 FMCG stocks which have PEG ratios of less than 1.5.
Galaxy Surfactants Ltd:
Galaxy Surfactants Ltd is a prominent manufacturer of performance surfactants and specialty care products, boasting an impressive portfolio of over 205 product grades. They manufacture consumer-centric home and personal care items. They are the preferred suppliers for top multinational corporations as well as regional and local FMCG brands.
On 27th October shares of Galaxy Surfactants Ltd closed at Rs. 2,595 per share and it has delivered -9.10 percent returns in the last 1 year. The company has market capitalization of Rs. 9,126.94 crores and has return on equity (ROE) of 22.04 percent and return on capital employed (ROCE) of 24.16 percent.
Varun Beverages Ltd:
Having established a partnership with PepsiCo in the 1990s, Varun Beverages Ltd holds a pivotal position in the beverage industry and ranks among the largest PepsiCo franchisees globally. The company is actively engaged in the manufacturing and distribution of an extensive array of carbonated soft drinks, non-carbonated beverages, and packaged water, all marketed under the trademarks owned by PepsiCo.
On 27th October shares of Varun beverages Ltd closed at Rs. 918.35 per share and it has delivered 76 percent returns in the last 1 year. The company has market capitalization of 1,13,437 crores and has return on equity (ROE) of 33.77 percent and return on capital employed (ROCE) of 27.47 percent.
Written by: Vinit Israni
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