P/E (Price to Earnings) ratio defines the ratio of a company’s current share price to its earnings per share (EPS), which is frequently employed to define the value of a stock.
The Chemical stocks mentioned below have lower-than-average P/E ratios, indicating that their stock prices are undervalued in relation to its earnings.This is considered as a positive investment indicator by value investors. This method assists investors in making informed decisions before investing in equity markets. .
Listed below are three chemical stocks having a P/E ratio less than Industry Average
India Gelatine & Chemicals Ltd
India Gelatine & Chemicals Ltd is a company which produces chemical products. Such as Photographic gelatine, pharmaceutical gelatine, and ossein and dicalcium phosphate. The company is categorized as a Micro-cap with a market capitalisation of Rs 266 crores. On Friday, the stock closed at Rs 375.15 a share, up 5 percent from the previous close price.
In the last six months the stock has gained 85 percent and in the last year the stock has gained a multibagger return of 191 percent.
The company’s P/E ratio is 10.58, which is lower than the industry P/E of 17.41, indicating that the company’s share is trading at a lower price, and it has an EPS of 33.68.
The net profit margin of the firm has improved from 3.51 percent to 11.64 percent, while the operating margin has increased from 4.71 percent to 15.94 percent.
Company’s revenue grew by 29 percent year on year to 205 crore in FY 22-23 from the previous year, while net profit jumped by 360 percent to Rs 23 crore.
Jayant Agro-Organics Ltd
The Company primarily manufactures and trades castor oil and its derivatives, such as oleo chemicals. Jayant Agro-Organics Ltd shares closed at Rs 217.70 a share on Friday, a 3.37 percent increase from the previous close price.
Stock has risen 17 percent in the previous six months and 22 percent year to date.
The company’s P/E ratio is 15.62, which is lower than the industry P/E of 17.41, indicating that the company share is trading at a lower price, and it has an EPS of 13.49.
The return on equity for the firm is 9.72 percent, while the return on capital employed is 14.25 percent.
The company’s revenue fell from Rs 944 crore in Q1FY23 to Rs 555 crore in Q1FY24.Furthermore, its net profit fell from Rs 20 crore in Q1FY23 to Rs 11 crore in Q1FY24.
Vishnu Chemicals Ltd
Vishnu compounds Ltd produces chrome compounds such as sodium dichromate, potassium dichromate, and yellow sodium sulphate. Vishnu Chemicals Ltd shares closed at Rs 352.50 a share on Friday, down 0.89 percent from the previous close price.
The stock has risen 25 percent in the previous six months and 12 percent in the last year.
The firm’s P/E ratio is 15.79, which is lower than the industry P/E of 17.41, suggesting that the company’s share is trading at a lower price, and it has an EPS of 22.86.
The company’s net profit margin has increased from 7.61 percent to 9.81 percent and operating margin has increased from 12.94 percent to 15.73 percent.
Revenue climbed by 30 percent year on year to 1,390 crore in FY 22-23 from the previous year, while net profit increased by 68 percent to Rs 136 crore.
Written by Omkar Chitnis
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