Is Mangalore Refinery and Petrochemicals Limited (NSE:MRPL) Undervalued?
Mangalore Refinery and Petrochemicals Limited (NSEI:MRPL), an energy company based in India, saw significant share price volatility over the past couple of months on the NSEI, rising to the highs of ₹136.1 and falling to the lows of ₹120.6. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Mangalore Refinery and Petrochemicals’s current trading price of ₹128.95 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Mangalore Refinery and Petrochemicals’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Mangalore Refinery and Petrochemicals
What is Mangalore Refinery and Petrochemicals worth?
Good news, investors! Mangalore Refinery and Petrochemicals is still a bargain right now. According to my valuation, the intrinsic value for the stock is ₹280.96, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because Mangalore Refinery and Petrochemicals’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Mangalore Refinery and Petrochemicals generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Though in the case of Mangalore Refinery and Petrochemicals, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? Although Mangalore Refinery and Petrochemicals is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to Mangalore Refinery and Petrochemicals, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on Mangalore Refinery and Petrochemicals for a while, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Mangalore Refinery and Petrochemicals. You can find everything you need to know about Mangalore Refinery and Petrochemicals in the latest infographic research report. If you are no longer interested in Mangalore Refinery and Petrochemicals, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
