Companies that are recently trading at a market price lower than their real values include Gujarat Narmada Valley Fertilizers & Chemicals and Kiri Industries. Investors can benefit from buying these companies while they are discounted, because they gain when the market prices move towards the stocks’ true values. Below is a list of stocks I’ve compiled that are deemed undervalued based on the latest financial data.
Gujarat Narmada Valley Fertilizers & Chemicals Limited (BSE:500670)
Gujarat Narmada Valley Fertilizers & Chemicals Limited manufactures and markets fertilizers and chemicals in India. Formed in 1976, and currently headed by CEO Rajiv Gupta, the company employs 3,075 people and with the company’s market cap sitting at INR ₹73.50B, it falls under the large-cap category.
500670’s shares are currently floating at around -21% beneath its actual level of INR598.81, at the market price of ₹472.90, according to my discounted cash flow model. The divergence signals an opportunity to buy 500670 shares at a low price. Also, 500670’s PE ratio is trading at 9.25x against its its Chemicals peer level of, 22.07x implying that relative to its comparable company group, 500670’s shares can be purchased for a lower price. 500670 also has a healthy balance sheet, as short-term assets amply cover upcoming and long-term liabilities. Finally, its debt relative to equity is 8.80%, which has been dropping for the past few years showing its ability to pay down its debt. Dig deeper into Gujarat Narmada Valley Fertilizers & Chemicals here.
Kiri Industries Limited (BSE:532967)
Kiri Industries Limited manufactures and sells dyes, dyes intermediates, and basic chemicals in India. The company was established in 1998 and with the company’s market cap sitting at INR ₹13.27B, it falls under the large-cap stocks category.
532967’s stock is now hovering at around -26% lower than its actual level of INR575.3, at a price of ₹423.40, according to my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. In terms of relative valuation, 532967’s PE ratio is trading at around 4.07x compared to its Chemicals peer level of, 22.07x suggesting that relative to its competitors, you can buy 532967’s shares at a cheaper price. 532967 is also in good financial health, with current assets covering liabilities in the near term and over the long run. Finally, its debt relative to equity is 13.52%, which has been falling over time, signalling its capacity to pay down its debt. Continue research on Kiri Industries here.
Kakatiya Cement Sugar and Industries Limited (NSEI:KAKATCEM)
Kakatiya Cement Sugar and Industries Limited manufactures and sells ordinary Portland cement in India. Founded in 1979, and headed by CEO Pothana Veeraiah, the company employs 435 people and with the company’s market cap sitting at INR ₹2.12B, it falls under the mid-cap group.
KAKATCEM’s shares are now floating at around -38% under its true value of INR443.43, at a price of ₹272.75, based on its expected future cash flows. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. Also, KAKATCEM’s PE ratio stands at 10.3x relative to its Basic Materials peer level of, 26.39x indicating that relative to other stocks in the industry, you can buy KAKATCEM’s shares at a cheaper price. KAKATCEM also has a healthy balance sheet, with current assets covering liabilities in the near term and over the long run.
More detail on Kakatiya Cement Sugar and Industries here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.
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.