The ‘price/earnings to growth’ ratio (PEG ratio) is a stock’s price-to-earnings (P/E) ratio divided by the growth rate of a company’s earnings for a specified period.
The PEG ratio is used to determine a stock’s value while also factoring in the company’s expected earnings growth and is generally thought to provide a much more complete picture than the standard P/E ratio. A PEG ratio lower than ‘1’ is a favorable scenario suggesting that a company is relatively undervalued.
Listed below are three stocks under the ‘Chemical’ sector with a PEG ratio of less than 1 that one should add to their watchlist:
Fine Organic Industries Limited
With a market capitalization of Rs 12,993.39 crores, the stocks of Fine Organic Industries Limited closed at Rs 4,237.90 on Thursday, slipping approximately 0.40 percent as compared to the previous closing levels of Rs 4,251.90 apiece. The PEG ratio of the company stands at 0.64.
During the recent financial quarters, the company’s prime business indicators, viz, operating revenues as well as after-tax profits, showed an increase in numbers with the former jumping from Rs 540 crores during Q2FY24 to Rs 488 crores during Q3FY24 and the latter, keeping the timeframe the same, rose from Rs 103 crores to Rs 94 crores.
Archean Chemical Industries Limited
With a market capitalization of Rs 8,489.09 crores, the stocks of Archean Chemical Industries Limited closed at Rs 687.95 on Thursday, slipping approximately 2 percent as compared to the previous closing levels of Rs 701.75 apiece. The PEG ratio of the company stands at 0.46.
During the recent financial quarters, the company’s prime business indicators, viz, operating revenues as well as after-tax profits, showed an increase in numbers with the former jumping from Rs 290 crores during Q2FY24 to Rs 413 crores during Q3FY24 and the latter, keeping the timeframe the same, rose from Rs 66 crores to Rs 102 crores.
Vishnu Chemicals Limited
With a market capitalization of Rs 1,870.80 crores, the stocks of Vishnu Chemicals Limited closed at Rs 285.50 on Thursday, slipping approximately 1 percent as compared to the previous closing levels of Rs 288.35 apiece. The PEG ratio of the company stands at 0.31.
During the recent financial quarters, the company’s prime business indicators, viz, operating revenues as well as after-tax profits, showed a marginal dip in numbers with the former reducing from Rs 308 crores during Q2FY24 to Rs 304 crores during Q3FY24 and the latter, keeping the timeframe the same, slipping from Rs 24 crores to Rs 21 crores.
Written by Amit Madnani
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