A company with a ‘fundamentally strong’ nature depicts a specific set of characteristics, some of which include strong and consistent financial performance, low leverage, and many more.
Coming onto a well-known metric for the capital markets, viz, the price-to-earnings (P/E) ratio is the proportion of a company’s share price to its earnings on a per-share basis. A very high P/E ratio, in the general course of business, could mean that investors expect high growth rates or that the company’s stock is overvalued.
Listed below are two such fundamentally strong stocks with zero debt that exhibit a P/E that is less than its industry average.
Gillette India Limited
With a market capitalization of Rs 21,152.69 crores, the stocks of Gillette India Limited, engaged in manufacturing and selling of packaged goods in the ‘grooming’ and ‘oral care’ segment, closed at Rs 6,491.50 on Thursday, a flat movement as compared to the previous closing levels of Rs 6,484.65 apiece.
The company portrayed a ‘nil’ debt-to-equity ratio that was reported during FY22-23. The company’s stock exhibits a price-to-earnings (P/E) ratio of 54.04 and the same is lower than the industry average number of 59.10.
During the recent financial quarters, the company’s prime indicators of business, including operating revenues as well as after-tax profits, showed movements in opposing directions. The former, on one end, decreased marginally from Rs 668 crores during Q2FY24 to Rs 639 crores during Q3FY24, and the latter, on the other end, rose from Rs 93 crores to Rs 104 crores.
Mazagon Dock Shipbuilders Limited
With a market capitalization of Rs 42,103.80 crores, the stocks of Mazagon Dock Shipbuilders Limited, a prominent shipyard in India, closed at Rs 2,087.55 on Thursday, gaining approximately 1.40 percent as compared to the previous closing levels of Rs 2,058.25 apiece.
The company portrayed a ‘nil’ debt-to-equity ratio that was reported during FY22-23. The company’s stock exhibits a price-to-earnings (P/E) ratio of 25.94 and the same is lower than the industry average number of 26.90.
During the recent financial quarters, the company’s prime indicators of business, including operating revenues as well as after-tax profits, showed positive movements with the former increasing from Rs 1,828 crores during Q2FY24 to Rs 2,362 crores during Q3FY24 and the latter, keeping the timeframe the same, rose from Rs 313 crores to Rs 592 crores.
Written by Amit Madnani
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