Tata Group was founded in the year 1868 by Jamsetji Tata. One of India’s largest conglomerates, this company is owned by Tata Sons. The second biggest business house in India with the highest number of companies listed on the stock exchange.
This group boasts of several industry-leading companies like TCS, Tata Motors, Tata Steel, Tata Consumers, etc. This company has been run and managed by leaders and visionaries. To name a few, this company boasts leaders like Jamsetji Tata, JRD Tata, and Ratan Tata. Moreover, it is one of the most socially conscious and responsible groups in the Indian business ecosystem.
The PEG ratio, which stands for Price/Earnings-to-Growth, compares a company’s Price-to-Earnings (P/E) ratio to its expected rate of growth. When the PEG ratio is below 1.0, it suggests that investors may be paying less per unit of earnings growth, making the stock potentially undervalued
Listed below are such Tata Group stocks that have a PEG ratio of less than 1:
Benares Hotels Ltd
With a market capitalization of Rs. 1,176 crores, the shares of Benares Hotels started Wednesday’s trading session on a higher note at Rs. 9,100, gaining around 1 percent compared to its previous close of Rs. 8,924.70. And are currently trading at Rs. 8,985 apiece.
Looking at the company’s financial statements, the revenue increased by 6 percent from Rs. 33.61 crores during the December quarter to Rs. 35.58 crores in the March quarter. On the other hand, the net profits increased by 3 percent from Rs. 11.30 crores to Rs. 11.59 crores during the same timeframe.
Due to increasing operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 23.43 percent during FY 22-23 to 27.10 percent in FY 23-24, and, the return on capital employed (RoCE) zoomed from 28.92 percent to 34.04 percent during the same timeframe. Additionally, the net profit margin increased from 25.05 percent during FY22-23 to 29.89 percent during FY23-24.
Furthermore, the share is considered to be undervalued as the PE ratio stands at 32.6 times compared to the industry average of 43.3 times and the PEG ratio stands at 0.97 times, which means the market has underestimated its value with its projected earning potential.
Benares Hotels Ltd was established in 1971. The Company operates its hotels, i.e. Taj Ganges and Taj Nadesar Palace in Varanasi and The Gateway Hotel, Gondia in Maharashtra. It became a subsidiary of The Indian Hotels Company Limited in 2011.
Tata Communications Ltd
With a market capitalization of Rs. 51,219 crores, the shares of Tata Communications started Wednesday’s trading session on a higher note at Rs. 1,829.65 compared to its previous close of Rs. 1,820.90. During the trading session, the shares hit a low of Rs. 1,794.60, losing around 1 percent and are currently trading at Rs. 1,802 apiece.
Coming onto the company’s financial statements, the revenue increased marginally by 1 percent from Rs. 5,633.26 crores during the December quarter to Rs. 5,691.7 crores in the March quarter. In addition, the net profits magnified by 684 percent from Rs. 40.28 crores to Rs. 315.68 crores during the same period.
Due to increasing expenditure on a YoY basis, the profitability metrics of the company declined with the return on equity (RoE) decreasing from 6.75 percent during FY 22-23 to 6.45 percent in FY 23-24, and, the return on capital employed (RoCE) showed a downward movement from 12.24 percent to 10 percent during the same timeframe. Furthermore, the net profit margin decreased from 9.20 percent during FY 22-23 to 7.99 percent during FY 23-24.
Furthermore, the share is considered to be undervalued as the PE ratio stands at 47.3 times compared to the industry average of 50.1 times and the PEG ratio stands at 0.65 times, which means the market has underestimated its value with its projected earning potential.
TCL owns and operates the world’s only wholly-owned fibre optic sub-sea network ring around the globe and is the world’s largest wholesale voice provider. It offers international and national voice and data transmission services, selling and leasing of bandwidth on undersea cable systems.
Tata Motors Ltd
With a market capitalization of Rs. 3,46,345 crores, the shares of Tata Motors started Wednesday’s trading session on a flatter note at Rs. 952 compared to its previous close of Rs. 951.30. During the trading session, the shares hit a low of Rs. 942.55, losing around 1 percent and are currently trading at Rs. 947 apiece.
Looking at the company’s financial statements, the revenue increased by around 9 percent from Rs. 1,09,799 crores during the December quarter to Rs. 1,19,213 crores in the March quarter. In addition, the net profits magnified by 152 percent from Rs. 6,952.17 crores to Rs. 17,528 crores during the same timeframe.
Due to increasing operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 5.32 percent during FY 22-23 to 36.97 percent in FY 23-24, and, the return on capital employed (RoCE) zoomed from 6.45 percent to 19.39 percent during the same timeframe. Additionally, the net profit margin increased from 0.68 percent during FY22-23 to 7.10 percent during FY23-24.
Furthermore, the share is considered to be undervalued as the PE ratio stands at 10.8 times compared to the industry average of 29.5 times and the PEG ratio stands at 0.12 times, which means the market has underestimated its value with its projected earning potential.
Tata Motors is a major Indian automotive manufacturer that produces a diverse range of passenger and commercial vehicles for the domestic and global markets through its various subsidiaries and joint ventures.
Written By Vaibhav Patil
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