The price-to-earnings (P/E) ratio measures a company’s share price relative to its earnings per share. A high P/E ratio may suggest that a stock is overvalued, with investors paying more for each unit of earnings growth.
Conversely, a lower P/E ratio compared to market averages or industry peers is generally considered advantageous, as it indicates that investors are paying less for each rupee of earnings, potentially offering better value.
Here is a list of a few petrochemical stocks trading at a P/E lesser than the industry average:
Kothari Petrochemicals Ltd (KPL)
Kothari Petrochemicals Ltd, part of the renowned HC Kothari Group, is the largest producer of premium quality Polybutene in India, used in lube oil, plastic, paint, and rubber industries. With offices in Chennai, Manali, and Mumbai, KPL supplies to customers in 20 countries
With a market capitalization of Rs.1,000 crore, the share of KPL is currently trading at Rs.172.18 per share on Wednesday, increasing more than 5 percent from its previous closing price.
The company has a P/E ratio of 14.8, lower than the industry P/E of 18.54, signifying that the stock is trading at a lower price, and has an EPS of Rs.11.5.
Additionally, Kothari Petrochemicals Ltd reports a Return on Capital Employed (ROCE) of 41.3 percent and a Return on Equity (ROE) of 28.8 percent.
Panama Petrochem Ltd
Panama Petrochem Limited is an India-based company engaged in the manufacture of specialty petroleum products for diverse user industries, such as printing, textiles, rubber, pharmaceuticals, cosmetics, power, and other industrial oils.
With a market capitalization of Rs.2,438 crore, the share of Panama Petrochem Ltd is currently trading at Rs.402.75 per share on Wednesday, rising more than 1.5 percent from its previous closing price.
The company has a P/E ratio of 12.2, lower than the industry P/E of 18.54, signifying that the stock is trading at a lower price, and has an EPS of Rs.33.
Additionally, Panama Petrochem Ltd reports a Return on Capital Employed (ROCE) of 24.9 percent and a Return on Equity (ROE) of 19 percent.
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Goa Carbon Ltd
Goa Carbon Limited is an Indian petrochemical company and is engaged in the manufacture and sale of Calcined Petroleum Coke. It is a regular supplier to aluminum smelters, graphite electrodes, and Titanium Dioxide manufacturers.
With a market capitalization of Rs.659 crore, the share of Goa Carbon Limited is currently trading at Rs.716.7 per share on Wednesday, decreasing more than 8 percent from its previous closing price.
The company has a P/E ratio of 8.7, lower than the industry P/E of 18.54, signifying that the stock is trading at a lower price, and has an EPS of Rs.82.9.
Additionally, Goa Carbon Limited reports a Return on Capital Employed (ROCE) of 23.5 percent and a Return on Equity (ROE) of 39.4 percent.
Written by – Siddesh S Raskar
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