Transformers stocks in India are primarily represented by companies engaged in the manufacturing of power transformers, which are crucial for electricity transmission and distribution.
In India, the transformer stocks sector is viewed as a promising investment opportunity, with a positive outlook driven by favourable market conditions and government support for renewable energy initiatives.
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 Transformer stock with a PEG less than 1:
Shilchar Technologies Ltd
With a market capitalization of Rs. 4,576 crores, the shares of Shilchar Technologies started Wednesday’s trading session on a flatter note at Rs. 6,052 compared to its previous close of Rs. 6,050.05. During the trading session, the shares hit a low of Rs. 5,966.70, losing around 1 percent and are currently trading at Rs. 5,990 apiece.
Looking at the company’s financial performance, the revenue increased by around 2 percent from Rs. 105 crores during the March quarter to Rs. 107 crores in the June quarter. On the other hand, the net profits decreased by 4 percent from Rs. 25 crores to Rs. 24 crores during the same period.
In terms of key financial metrics, the company reported a return on equity of 43.84 percent and a return on capital employed of 58.01 percent for the period spanning FY23-24. Additionally, the net profit margin stood at 23.15 percent during the same timeframe.
Furthermore, the stock might be deemed undervalued, given its PE ratio of 46.3 times, in contrast to the industry average of 54.9 times and the PEG ratio stands at 0.72 times, which means the market has underestimated its value with its projected earning potential.
Indo Tech Transformers Ltd
With a market capitalization of Rs. 1,981 crores, the shares of Indo Tech Transformers started Wednesday’s trading session on a higher note at Rs. 1,950 compared to its previous close of Rs. 1,822.90. During the trading session, the shares hit a low of Rs. 1,801.05, losing around 3 percent and are currently trading at Rs. 1,830 apiece.
Coming onto the company’s financial statements, the revenue decreased by around 53 percent from Rs. 174.71 crores during the March quarter to Rs. 82.15 crores in the June quarter. On the other hand, the net profits declined by 77 percent from Rs. 25.57 crores to Rs. 5.91 crores during the same timeframe.
In terms of key financial metrics, the company reported a return on equity of 21.57 percent and a return on capital employed of 27.30 percent for the period spanning FY23-24. Additionally, the net profit margin stood at 9.30 percent during the same timeframe.
Furthermore, the stock might be deemed undervalued, given its PE ratio of 40.6 times, in contrast to the industry average of 54.9 times and the PEG ratio stands at 0.81 times, which means the market has underestimated its value with its projected earning potential.
Schneider Electric Infrastructure Ltd
With a market capitalization of Rs. 18,946 crores, the shares of Schneider Electric Infrastructure started Wednesday’s trading session on a flatter note at Rs. 799. During the trading session, the shares hit a low of Rs. 788, losing around 1 percent and are currently trading at Rs. 794 apiece.
Looking at the company’s financial performance, the revenue increased by 26 percent from Rs. 471.75 crores during the March quarter to Rs. 592.91 crores in the June quarter. In addition, the net profits magnified by 1,378 percent from Rs. 3.28 crores to Rs. 48.48 crores during the same period.
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 58.08 percent and a return on capital employed (RoCE) of 33.80 percent for the period spanning FY23-24. Additionally, during the same period, the net profit margin stood at 7.79 percent.
The PEG ratio of the company stands at 0.73 times, which means the market has underestimated its value with its projected earning potential.
Written By Vaibhav Patil
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