Here are some recommendations based on multiple parameters we checked . Our list of 10 undervalued stocks for long term investment.
P/E Ratio – The stocks with less than 20x P/E multiple which are fairly undervalued.
Debt/equity Ratio – The Stocks with a Debt/equity ratio of less than 1.
5Y Avg. EBITDA Margin – The stocks with more than 20% of Average EBITDA Margin for the past 5 years.
5Y Avg. RoE – The stocks with more than 15% of Average Return on Equity for the past 5 years.
- NMDC Ltd – NMDC is the largest iron ore manufacturer in India accounting for 18% of the total domestic production. The average annual production of the company stood at 17 million MT for the past 5 years. Despite its high capex requirement, the company is paying healthy dividends through high free cash balance.
- Coal India Ltd – CIL is at the forefront of the nation’s coal production where it alone produces around 83% of country’s entire coal output. The company made a Capex of around Rs.13,000crs in the FY21 and a substantial amount spent on its Diversification projects.
- Gujarat State Petronet Ltd – Gujarat State Petronet Ltd (GSPL) is India’s second largest Natural Gas Infrastructure and Transmission Company. Presently, the company transports over 35 MMSCMD of natural gas to around 133 customers including Refineries, Steel Plants, Fertilizer Plants, Petrochemical Plants, Power Plants, Glass industries, Textiles, Chemical, City Gas Distribution (CGD) Companies and other industries.
- Jubilant Pharmova Ltd – Jubilant Pharmova is engaged in specialty pharmaceuticals, CDMO, generics, drug discovery and proprietary novel drug businesses. Formulations produces 24% of revenues where Radiopharma and allergy therapy with 38% and CDMI & API with 33% for FY21.
- Alembic Pharmaceuticals Ltd – Alembic Pharma operates in international generics (54% of sales), domestic branded (28% of sales) and API (18% of sales). Exports contribute 69% of sales (US~74%), domestic contributes 31% of sales (Chronic~69% & Acute~31%. It has filed 212 ANDA and has 146 approvals with 94 product launches.
- KRBL – With a 120 year heritage, KRBL is the largest integrated rice miller of the country, is one of the major producers of rice products (both basmati and non-basmati rice). KRBL has paddy milling capacity up to 195 MT/per hour which is the highest in the world.
- Sun TV Network Ltd – Sun TV, in its key market of TamilNadu, it has improved its prime-time fiction market share from 37% to 42% in the last three quarters, and it remains well below those earlier levels. The company envisages to take it to 50% in the medium term.
- Hindustan Aeronautics Ltd – The company manufactures aircrafts under license such as the MiG-21, MiG-27, Jaguar, etc. and helicopters such as the Cheetah and Chetak. Further, the company has recently secured its largest ever contract of 83 LCA Tejas Mk1A aircraft with MoD for Rs.36,486crs which further demonstrates its strong position in the defense avionics sector.
- Rites Ltd. – The company is a leading multi-disciplinary engineering & consultancy organization providing customized, competitive, diversified, and comprehensive, concept-to-commissioning services and integrated solutions. During the year, REMC successfully commissioned the pilot project of a 2 MW solar ground-mounted plant on vacant Railway land along the railway tracks at Diwana near Panipat.
- VST Industries Ltd – The company is the third-largest player in the Indian Cigarette Market with over 90 years of operations with a market share of 9% in the legal cigarette market and 5% in the overall cigarette market in terms of value.