The P/E ratio or Price-to-Earnings ratio compares the current share price to the earnings per share (EPS) of a company, which is a widely used metric for determining the value of a stock.
A company with a lower P/E ratio outperforms its competitors with a higher P/E ratio, which means that investors are paying less money for every dollar of earnings generated by a company. This method helps investors make informed decisions before investing in any company.
Following are the three Electric Vehicle (EV) stocks that are currently trading at a lower P/E ratio than the industry average.
Amara Raja Energy & Mobility Limited
With a market cap of Rs. 20,615 crore, the share price of this mid-cap EV stock moved up by 1.8 percent on BSE to hit an intraday high at Rs. 1,134 in the trading session of Friday, compared to its previous closing price of Rs. 1,134.
The stock has a P/E ratio of 24.6, compared to the industry’s P/E ratio of 34, indicating that the stock is trading at a lower price or in other words, the stock is undervalued.
In terms of financials, the company’s revenue from operations grew by nearly 9.25 percent from Rs. 2,637 crore in Q3 FY22-23 to Rs. 2,881 crore in Q3 FY23-24, accompanied by an increase in the net profit of 7.6 percent, from Rs. 223 crore in Q3 FY22-23 to Rs. 240 crore in Q3 FY23-24.
In the last six months, the stock has delivered positive returns of about 81.4 percent and nearly 90.02 percent in the last one year. So far in 2024, it has given positive returns of around 36.5 percent.
As of March 2024, FIIs hold 24.46 percent of the shares, whereas DIIs hold 15.36 percent of the shares in the company, aggregating to 39.82 percent of the institutional holdings.
Amara Raja Energy & Mobility Limited, a flagship company of the Amara Raja Group, is the technology leader and one of the largest manufacturers of lead-acid batteries for both industrial and automotive applications in the Indian storage battery industry.
The company offers Li-ion cells, battery packs and charging solutions for Light EVs and the telecom industry, and is among the first companies in India to invest in Li-ion technologies with a state-of-the-art Gigafactory in the works.
Mahindra & Mahindra Limited
With a market cap of Rs. 2.72 lakh crore, the share price of the company moved up by 1.2 percent on the BSE to hit an intraday high at Rs. 2,210 in the trading session of Friday.
The P/E ratio of Mahindra & Mahindra is 24.1, which is lower than the industry’s P/E ratio of 52.8, indicating that the stock is trading at a lower price or in other words, the stock is undervalued.
On a year-on-year basis, the company’s revenue from operations grew by nearly 15.3 percent from Rs. 30,621 crore in Q3 FY22-23 to Rs. 35,299 crore in Q3 FY23-24, accompanied by an increase in the net profit of 0.56 percent, from Rs. 2,994 crore in Q3 FY22-23 to Rs. 2,977 crore in Q3 FY23-24.
In the last six months, the stock has delivered positive returns of about 49.06 percent and nearly 77.2 percent in the last one year. So far in 2024, it has given positive returns of around 28.5 percent.
As of March 2024, FIIs hold 41.75 percent of the shares, whereas DIIs hold 26.13 percent of the shares in the company, aggregating to 67.88 percent of the institutional holdings.
Formerly known as Mahindra & Mohammed, Mahindra & Mahindra Limited is an Indian automobile manufacturing company and a part of Mahindra Group. The company operates on a global scale and manufactures SUVs, MPVs, pick-ups, LCVs & HCVs, EVs, buses, trucks and two-wheelers.
Ashok Leyland Limited
With a market cap of Rs. 59,387.2 crore, the share price of the stock moved up by nearly 1.9 percent on BSE to hit an intraday high at Rs. 205.1 in the trading session of Friday, compared to its previous closing price of Rs. 201.35.
The P/E ratio of Ashok Leyland stands at 24 which is less than the industry’s P/E ratio of 32.3.
In terms of financials, the company’s revenue from operations grew by nearly 6.6 percent from Rs. 10,400 crore in Q3 FY22-23 to Rs. 11,093 crore in Q3 FY23-24, accompanied by an increase in the net profit of 75.5 percent, from Rs. 351 crore in Q3 FY22-23 to Rs. 609 crore in Q3 FY23-24.
As of March 2024, FIIs hold 21.45 percent of the shares, whereas DIIs hold 12.23 percent of the shares in the company, aggregating to 33.68 percent of the institutional holdings.
In the last six months, the stock has delivered positive returns of about 20.2 percent and nearly 40.7 percent in the last one year. So far in 2024, it has given positive returns of around 8.8 percent.
Founded in 1948, Ashok Leyland Limited stand as the flagship company of the Hinduja Group and is India’s second-largest commercial vehicle manufacturer as well as the fourth-largest manufacturer of buses globally.
Optare Group, a UK-based subsidiary of the company renamed Switch Mobility Limited in 2020, is an electrical vehicle company.
As part of Ashok Leyland’s plan, Switch Mobility will be positioned as its global arm focused on green mobility and electric vehicles, with an emphasis on creating new EV platforms and growing the EV industry.
Written by Shivani Singh
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