A PEG ratio under 0.5 suggests a stock may be undervalued relative to its earnings growth. It compares the price/earnings (P/E) ratio to expected growth, and a low value implies investors are paying less for future growth. For small-cap stocks, this could signal high potential returns, though with higher risk. It’s useful for identifying growth at a reasonable price.
Listed below are five small-cap stocks that have a Price/Earnings to Growth (PEG) ratio of less than 0.5:
1. Man Infraconstruction Limited
With a market capitalization of Rs. 5,723.17 crore, the shares of Man Infraconstruction Limited closed at Rs. 152.50 per equity share, down nearly 0.46 percent from its previous day’s close price of Rs. 153.20.
The company’s ROCE and ROE should be 28.1 percent and 22.8 percent, respectively. The company has a PEG ratio of 0.44. Man Infraconstruction Limited is an Indian construction company involved in building ports, roads, residential, and commercial projects. The company, known for timely project delivery and quality work, plays a key role in infrastructure development across India, especially in urban and coastal areas.
2. JK Paper Limited
With a market capitalization of Rs. 5,234.53 crore, the shares of JK Paper Limited closed at Rs. 309 per equity share, down nearly 1.81 percent from its previous day’s close price of Rs. 314.70.
The company’s ROCE and ROE should be 20.3 percent and 23.4 percent, respectively. The company has a PEG ratio of 0.42. JK Paper Limited is a leading Indian paper manufacturer, producing writing, printing, and packaging paper. It emphasizes sustainability, innovation, and quality, serving domestic and international markets with advanced manufacturing facilities and eco-friendly practices.
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3. Goodluck India Limited
With a market capitalization of Rs. 2,350.46 crore, the shares of Goodluck India Limited closed at Rs. 717.95 per equity share, down nearly 0.58 percent from its previous day’s close price of Rs. 722.15. The company’s ROCE and ROE should be 17.4 percent and 15.2 percent, respectively. The company has a PEG ratio of 0.45.
Goodluck India Limited is a diversified engineering company specializing in steel structures, pipes, and precision tubing. It serves the automotive, infrastructure, and aerospace sectors, offering high-quality products both in India and global markets.
4. Maharashtra Seamless Limited
With a market capitalization of Rs. 8,704.77 crore, the shares of Maharashtra Seamless Limited closed at Rs. 649.65 per equity share, down nearly 0.87 percent from its previous day’s close price of Rs. 655.35. The company’s ROCE and ROE should be 22.9 percent and 18.1 percent, respectively. The company has a PEG ratio of 0.44.
Maharashtra Seamless Limited is a leading manufacturer of seamless and ERW steel pipes in India. It caters to sectors like oil & gas, power, and infrastructure, known for its advanced technology and strong export presence.
5. EID Parry (India) Limited
With a market capitalization of Rs. 14,689.82 crore, the shares of EID Parry (India) Limited closed at Rs. 826.30 per equity share, up nearly 1.04 percent from its previous day’s close price of Rs. 817.80. The company’s ROCE and ROE should be 20.3 percent and 13.5 percent, respectively. The company has a PEG ratio of 0.43.
E.I.D. Parry (India) Limited was established in 1788 and is a leading Indian company specializing in sugar production, ethanol manufacturing, and nutraceuticals. The company is part of the Murugappa Group and operates multiple sugar mills across South India.
Written By – Nikhil Naik
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