Value Hunt: 3 Nifty 50 Companies Trading at the ‘Lowest’ P/E Ratio!

  • Stock Market Analysis
  • Editors Pick

The Indian markets are in a correction mode, all thanks to a massive turmoil in the global markets. As equities are taking a plunge amid the ongoing sell-off, long-term investors are on the lookout for some value buys. As many stalwart investors say, investing in a falling market is the best time to reap benefits in a rising market.

One of the most-used valuation metrics is the price-to-earnings ratio or P/E ratio which tells what investors need to pay for every INR 1 of earnings by the company. The lower this ratio, the better the valuations. On this note, let us have a look at three Nifty 50 companies that are trading at the lowest P/E ratio among all constituents in the index.

Tata Steel Limited

Tata Steel Ltd (NS: TISC ) is a diversified steel producer engaged in the business of steel making, including raw material and finishing operations. The company has a market capitalization of INR 1,27,405 crores, making it the 41st largest listed company on the NSE. Recently, the company also announced a merger with seven entities under its umbrella which would help it to save roughly INR 15,000 crores in costs.

In FY22, the company’s revenue soared 55.95% YoY to INR 2,48,198.63 crores. However, higher metal prices translated into a stellar YoY profit growth of 436.08% to INR 40,153.93 crores in FY22. Increased profit coupled with a fall in its share price this year has resulted in a P/E drop to a mere 3.17, compared to the sector’s average of 13.39. On top of that, the stock is also trading at a dividend yield of 4.89%.

Oil and Natural Gas Corporation Limited 

Oil And Natural Gas Corporation Ltd (NS: ONGC ) is another stock that is trading quite cheap. It is a global energy company with a market capitalization of INR 1,61,782 crores and is engaged in the exploration, development and production of crude oil and natural gas

Higher energy prices in FY22 also led ONGC to record its most profitable year so far. The company posted a 58.7% YoY jump in revenue to INR 5,00,171.36 crores in FY22 but the net income soared 179.2% to INR 45,522.12 crores. A negative return of 8.14% in the last one year has capped the P/E ratio to 3.55, compared to the industry’s average of 12.71. The stock is also trading at an inflation-beating dividend yield of 8.16%.

Bharat Petroleum Corporation Limited 

The last stock on the list which has the lowest P/E in the Nifty 50 index is an oil refiner and marketing company Bharat Petroleum Corp. Ltd. (NS: BPCL ) which has a market capitalization of INR 67,456 crores. In FY22, the company’s revenue soared to INR 3,51,730.5 crores, depicting a healthy YoY jump of over 47.98%. Although, the net profit took a hit of 27.74% in the same period to INR 11,681.5 crores.

The share price of BPCL has delivered a negative return of 25.8% in the last one year, which has brought down its P/E ratio to 5.77. This is also a high dividend-paying stock, currently trading at a dividend yield of 5.05%  

 

Disclaimer: This article is not a recommendation to buy/sell/hold any security.

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  • Mahesh Shetty @Mahesh Shetty
    Must be a good reason why market decided they will trade at such low PEs.
    Like 0
  • Nilay Sanyal @Nilay Sanyal
    JindalPoly PE ratio is attractive too, so the LTP
    Like 2
  • Raju Shinde @Raju Shinde
    ongc looks good nice article
    Like 5
  • Hanamanth Kabadi @Hanamanth Kabadi
    Thank you for sharing, Going Forward.. India planning to reduce oil consumption and focusing on  Green Energy Transition, Hydrogen, EVs , Bio gas ect..  not sure  how these oil companies are worth of investment.. Better to invest of future focused companies
    Like 11
  • Ria Singh @Ria Singh
    thanks 👍
    Like 3
  • ABBAS ABBAS @ABBAS ABBAS
    Thanks sir
    Like 2
  • Amit Gohil @Amit Gohil
    thank you for sharing
    Like 1
  • Nilesh Bhadait @Nilesh Bhadait
    Nice information Sir !
    Like 1
  • Vinod Kumar @Vinod Kumar
    okay thanks for analysis
    Like 3
  • aniruddh rathi @aniruddh rathi
    or sell
    Like 0
  • aniruddh rathi @aniruddh rathi
    so should we buy
    Like 2
  • aniruddh rathi @aniruddh rathi
    so should we buy
    Like 1
  • rahul kumar @rahul kumar
    some more downside required.
    Like 3
  • rahul kumar @rahul kumar
    some more downside required
    Like 1
  • rahul kumar @rahul kumar
    some more downside required
    Like 1
  • ankit Sarangal @ankit Sarangal
    what should we do .. buy tata steel ?
    Like 3
  • chandra pathak @chandra pathak
    Teeno pilenge soon…
    Like 1
    • nikhil kumar @nikhil kumar
      what do you mean?
      Like 0
    • nikhil kumar @nikhil kumar
      what do you mean?
      Like 0
    • rahul kumar @rahul kumar
      @nikhil kumar some more downside buy
      Like 1
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      100
  • Ria Singh @Ria Singh
    thanks 👍
    Like 3

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