The 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.
According to World Steel Association forecasts, the steel sector will grow at a pace of roughly 6.7 percent in 2023. According to the Indian Steel Association (ISA), steel consumption in India is predicted to rise by 7.5 percent this fiscal year, backed by increased demand from the domestic construction, railway, and capital goods sectors.
Listed below are three steel stocks having a P/E ratio less than the Industry Average
Godawari Power & Ispat Ltd
Godawari Power & Ispat Ltd is a small-cap stock with a market capitalization of Rs 8,029 crore. The company’s shares were trading at Rs 590.95 apiece, down 1.85 percent on Friday. The stock has delivered a 66 percent return over the previous six months and a 97 percent return over the last year.
The company’s P/E ratio is 10.89, which is lower than the industry P/E of 17.0, indicating that the company’s share is trading at a lower price, and it has an EPS of 54.45. The net profit margin of the firm stands at an operating margin of 19.35 percent and a net profit margin of 13.71 percent.
Godawari Power & Ispat is primarily engaged in the mining of iron ore and the manufacturing of iron ore pellets, sponge iron, steel billets, wire rods, H.B. wire, and ferroalloys, as well as the generation of electricity.
Sarda Energy and Minerals Ltd
Sarda Energy and Minerals Ltd is a small-cap stock with a market capitalization of Rs 7,207 crore. The company’s shares were trading at Rs 203.75 apiece, down 0.97 percent on Friday.
The company’s P/E ratio is 12.25, which is lower than the industry P/E of 17.50, indicating that the company’s share is trading at a lower price, and it has an EPS of 17.12.
The net profit margin of the firm stands at an operating margin of 22.10 percent and a net profit margin of 14.36 percent.
In the last six months, the stock has delivered an 11 percent return and in the last year, the stock has delivered a return of 13 percent.
Sarda Energy and Minerals Ltd is engaged in the production of steel, ferroalloys, and power.
Kirloskar Ferrous Industries Ltd
Kirloskar Ferrous Industries Ltd is a small-cap stock with a market capitalization of Rs 6,624 crore. The company’s shares were trading at Rs 477.50 apiece, down 0.60 percent on Friday.
The company’s P/E ratio is 17.07, which is lower than the industry P/E of 17.50, indicating that the company’s share is trading at a lower price, and it has an EPS of 28.01.
The company’s net profit margin is 8.45 percent, with an operating margin of 13.41 percent and a net profit margin of 8.45 percent. The stock returned 13 percent in the previous six months and 81 percent in the previous year.
Kirloskar Ferrous Industries produces pig iron and ferrous castings such as cylinder blocks, cylinder heads, gearbox parts, and various automotive components.
Written by Omkar Chitnis
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