Synopsis:
Suzlon Energy, Colgate-Palmolive, PI Industries, NALCO, and Berger Paints. These companies have a proven track record of strong returns, solid business models, and market leadership in their sectors. With current P/E ratios below or near their 10-year median levels, they may offer value for patient investors.
Some fundamentally strong companies with solid financials and proven track records are now trading below their historical valuation multiples. This means investors can access quality businesses at prices lower than what the market has typically paid in the past. Such situations are rare, as strong fundamentals usually command a premium.
1. Suzlon Energy
Suzlon Energy Limited is a significant wind energy company focused on the sales and manufacture of wind turbine generators and components in India as well as global markets. Additionally, it carries out operations, maintenance, and project execution for wind projects. With a market capitalisation of Rs. 76,068 crores, fell to Rs. 55.15, hitting low of up to 2.63 percent from its previous closing price of Rs. 56.64.
2. Colgate-Palmolive (India)
Colgate-Palmolive (India) Ltd manufactures and trades in personal and oral care products in India. The company offers toothpaste, toothpowder, toothbrushes, mouthwash, rinses, hand washes, and shower gels under the Colgate brand name. It also offers and exports soaps, cosmetics, and toilet preparations.With a market capitalisation of Rs. 60,244 crores, fell to Rs. 2,211, hitting low of up to 2.78 percent from its previous closing price of Rs. 2,274.20.
The stock is currently trading at an attractive P/E multiple of 44.8x, below its 10-Year Median P/E of 45.3x. It has delivered an ROE and ROCE of 81.19 percent and 105.34 percent respectively.
3. Berger Paints India
Berger Paints stands out as a top paint manufacturer in India, providing decorative, industrial, and protective coatings. With a solid distribution network, increasing housing demand, and a trend towards premium products, the company is steadily gaining market share in the paint industry. With a market capitalisation of Rs. 60,317 crores, fell to Rs. 513.35, hitting low of up to 3.36 percent from its previous closing price of Rs. 531.20.
The stock is currently trading at an attractive P/E multiple of 52.95x, much below its 10-Year Median P/E of 62x. It has delivered an ROE and ROCE of 20.26 percent and 24.90 percent respectively.
4. P I Industries
PI Industries Limited is an Indian company that manufactures and distributes agricultural chemicals and crop solutions in India and internationally. It offers products like insecticides, fungicides, herbicides, biologicals, plant nutrients, and specialty chemicals, along with R&D and custom manufacturing services.
The company serves farmers, distributors, and retailers and exports its products worldwide, catering to both the agrochemical and pharma sectors. With a market capitalisation of Rs. 52,949 crores, fell to Rs. 3,478.10, hitting low of up to 2.66 percent from its previous closing price of Rs. 3,573.20.
The stock is currently trading at an attractive P/E multiple of 33.94x, below its 10-Year Median P/E of 38.6x. It has delivered an ROE and ROCE of 17.61 percent and 22.86 percent respectively.
5. National Aluminium Company (NALCO)
National Aluminium Company Limited is a company based in India that specialises in the production and sale of alumina and aluminium. It operates mainly through two segments: the Chemical segment, which includes calcined alumina and alumina hydrate, and the Aluminium segment.
With a market capitalisation of Rs. 36,811 crores, fell to Rs. 198.68, hitting low of up to 3.37 percent from its previous closing price of Rs. 205.61.The stock is currently trading at an attractive P/E multiple of 6.69x, below its 10-Year Median P/E of 16.5x. It has delivered an ROE and ROCE of 32.72 percent and 43.96 percent respectively.
In conclusion, these stocks are trading at prices lower than their historical valuations and have solid fundamentals, reliable business models, and strong positions in the market. This could be a great chance for long-term investors, but it’s crucial to take a close look at these businesses, understand the potential risks, and make sure they fit with your investment goals before jumping in to buy.
Written by Satyajeet Mukherjee
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