Gujarat Gas and 4 other fundamentally strong small cap stocks trading below their 5 yr avg. P/E

Synopsis: Gujarat Gas, Alembic Pharmaceuticals, and three other companies have a proven track record of strong returns and a solid business model. With current P/E ratios below their 5-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.

Gujarat Gas

Gujarat​‍​‌‍​‍‌​‍​‌‍​‍‌ Gas Limited is India’s largest city gas distributor that extends the use of natural gas to 44 districts through its extensive pipeline network and more than 834 CNG stations. Backed with a strong industrial presence, several national awards, and a history of service spanning many years, the company is essentially turning the clean energy transition in India into a ​‍​‌‍​‍‌​‍​‌‍​‍‌reality.

With a market capitalisation of Rs 27,184 crore, the stock is currently trading at an attractive P/E multiple of 23.7x, below its 5-Year Median P/E of 27.6x. It has delivered an ROE and ROCE of 14.2 percent and 19.5 percent respectively.

Astrazeneca Pharma India

AstraZeneca​‍​‌‍​‍‌​‍​‌‍​‍‌ is a worldwide pharmaceutical company that operates on a scientific basis and is mainly concerned with the development of innovative drugs for cancer, chronic diseases, and rare diseases. For more than 45 years, the company has been very successful in India and its objectives are to enhance patient access, promote the next-generation therapies, maintain good business practices, and still, be able to give health and societal benefits in the long ​‍​‌‍​‍‌​‍​‌‍​‍‌run.

With a market capitalisation of Rs 22,649 crore, the stock is currently trading at an attractive P/E multiple of 98x, below its 5-Year Median P/E of 106x. It has delivered an ROE and ROCE of 23.6 percent and 33.4 percent respectively.

Hatsun Agro Product

Hatsun​‍​‌‍​‍‌​‍​‌‍​‍‌ Agro Product is among the major dairies in India that manufactures and sells fresh milk, a wide variety of ice-creams, curd, ghee, paneer, and other milk-based products etc. Set up in 1970 and located in Chennai, it sells through famous brands like Arun Icecreams, Arokya, Hatsun, Ibaco and Milky ​‍​‌‍​‍‌​‍​‌‍​‍‌Moo.

With a market capitalisation of Rs 21,808 crore, the stock is currently trading at an attractive P/E multiple of 60.4x, below its 5-Year Median P/E of 92x. It has delivered an ROE and ROCE of 17 percent and 13.1 percent respectively.

Alembic Pharmaceuticals

Alembic​‍​‌‍​‍‌​‍​‌‍​‍‌ Pharmaceuticals is an Indian pharma company that has stood the test of time and is still very popular and highly regarded after more than 110 years of its existence. It is engaged in the manufacture and sale of generics, formulations, and APIs not only in India but also in the international markets. With its commitment to research, quality, and innovation, Alembic is determined to be the provider of affordable and trustworthy healthcare all over the ​‍​‌‍​‍‌​‍​‌‍​‍‌globe.

With a market capitalisation of Rs 16,866 crore, the stock is currently trading at an attractive P/E multiple of 26.1x, below its 5-Year Median P/E of 29.7x. It has delivered an ROE and ROCE of 11.4 percent and 13 percent respectively.

Grindwell Norton

Grindwell​‍​‌‍​‍‌​‍​‌‍​‍‌ Norton has been one of the top industrial manufacturing companies in India for over a decade. They are mainly recognized for the production of abrasives, ceramics, performance plastics, and more. Established in 1941, the company, which is now a part of the international Saint-Gobain Group, is a source of advanced material, high tech and the latest innovtion for the industries it ​‍​‌‍​‍‌​‍​‌‍​‍‌serves.

With a market capitalisation of Rs 17,543 crore, the stock is currently trading at an attractive P/E multiple of 45.8x, below its 5-Year Median P/E of 62.1x. It has delivered an ROE and ROCE of 16 percent and 20.9 percent respectively.

Written by Satyajeet Mukherjee

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