Low PE stocks below Rs 500
Low PE stocks below Rs 500: Low PE ratios often indicate hidden investment potential, provide investors with discount opportunities or raise concerns about future growth and stability. In this article, we embark on a journey to discover fundamentally strong stocks with low PE ratios and under Rs 500 and examine their business fundamentals and financial profile.
Read this article to know about low PE stocks under Rs 500. But before we go any further, let’s understand what the price-to-earnings (P/E) ratio is. The price-to-earnings ratio is a financial metric used to value a company’s stock by comparing its earnings per share (EPS) to the current market price per share.
The formula to calculate the P/E ratio is: P/E ratio = market price per share / earnings per share
List of Low PE Stocks Under Rs 500
low PE Stock #1 Under Rs 500: Oil & Natural Gas Corporation
Oil and natural gas construction, ONGC is a Maharatna company and India’s largest crude oil and natural gas company, accounting for about 71% of domestic production. ONGC owns and operates several segments including upstream and downstream drilling, refining, petrochemicals, liquefied natural gas, and renewable energy. It owns HPCL, MRPL, Petronet LNG, Prize Petroleum, etc.
Looking at the financial statements, the company reported a significant 29% increase in operating revenue of Rs. 531792 Cr in FY22 to Rs. 684829 Cr in FY23. Net profit after tax decreased by 33%. 49294 Cr in FY22 to Rs. 32777 Cr in FY23. This was due to the sharp increase in production and transportation costs, which increased by 47.22% and accounted for approximately 47% of revenue in FY23.
The three-year average RoE and RoCE are 13.9% and 13.0%, respectively. The 3-year average net profit margin is 7.19%, making ONGC one of the low PE stocks under Rs 500. The debt ratio is 0.46x, which is much lower than the standard level of 2x. An interest coverage ratio of 11.07x indicates that it generates enough revenue to pay ~11x interest.
The promoters’ stake is as high as 58.89% as of December 2023, and this ratio has remained consistent over the past seven quarters. FII holdings are 9.20%.
Low PE Stock Under Rs 500 #2: Coal India
coal india It is a key player in the Indian energy sector and is mainly engaged in coal mining and production along with coal washing plants. Founded in 1975, CIL emerged from the government’s takeover of a private coal mine and evolved into a Maharatna company, a prestigious title given only to some state-owned enterprises.
CIL started with a production of 79 million tonnes (MT) and has grown to become the world’s largest coal producer with 322 mines comprising underground, open pit and mixed mines as of April 1, 2023. Its scope extends beyond coal, serving major consumers in the power and steel sectors, as well as additional customers in the cement, fertilizer and brick kiln sectors.
CIL contributes 85% of the country’s total coal production and meets 75% of the country’s coal-based power generation needs. In addition, it meets 55% of domestic power generation and 40% of primary commercial energy requirements, emphasizing its important role in the national energy ecosystem.
Looking at the financial statements, the company reported a significant 27% increase in revenue operations from Rs. 100562 Cr in FY22 to Rs. 127627 Cr in FY23. Net profit after tax increased by 62%. 17,464 Cr in FY22 to Rs. 28125 Cr in FY23. The three-year average RoE and RoCE are 46.8% and 56.6%. The three-year average net profit margin is 17%.
The debt ratio is 0.09 times, which is far below the standard of 2 times. An interest coverage ratio of 50.8x indicates that Coal India is generating enough revenue to pay up to 50x interest. Coal India ranks second in the list of low PE stocks under Rs 500.
The promoter’s shareholding ratio was high at 63.13% as of December 2023, down 3% compared to March 2023. FII holdings are 8.59%.
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#3 Low PE Stocks Under Rs 500: Bank of Baroda
bank of baroda (BOB or BoB) is an Indian state-owned bank that started operations in 1908 in the Baroda region, now known as Vadodara. The bank was founded by Sayajirao Gaekwad III, the Maharaja of Baroda. It was later nationalized in 1969.
Bank of Baroda is the third largest bank in India with deposits of Rs. It is valued at $12.34 billion, operates in more than 17 countries, and serves more than 15.3 million customers. BOB provides retail banking, rural and agricultural business finance, corporate finance, insurance and mutual fund services.
The total amount of bank deposits increased from 10 million won to 10 million won. 10.45 lakh crore in FY22 to Rs 12.03 billion in FY23, an increase of 15.1%. During the same period, the total loan amount increased from 50 million won to 10 million won. It grew by 18.5% to Rs 8.18 lakh crore in FY22 to Rs 9.7 lakh crore in FY 2023. BOB registered net interest income of Rs. 41,356 Cr, an increase of 26.8% from Rs. 32,621 Cr in FY22.
During this period, the company’s net profit nearly doubled from 200 billion won. 7272 crores in FY22 to Rs. 14,110 billion in FY23. The three-year average RoE and RoCE are 9.07% and 4.50%. The three-year average net profit margin is 9.35% and this banking stock is one of the low PE stocks under Rs 500.
As of December 2023, the promoters’ shareholding ratio remained the same as the previous quarter at 63.97%. FII holdings are 12.27%.
#4 Low PE Stocks Under Rs 500: Power Finance Corporation
Korea Electric Power Finance Corporation (PFC) is a pivotal player in India’s financial and power sectors. Established in 1986, PFC has the distinction of being the first Maharatna in finance. Registered with the Reserve Bank of India as an Infrastructure Finance Company (IFC), PFC operates as a systemically important non-depository non-banking finance company (NBFC), highlighting its important role in the infrastructure environment.
As the Government of India’s key financial partner in the power sector, PFC extends critical financial support to strengthen India’s energy infrastructure. PFC, majority-owned by the Indian government, ranks 378th in terms of assets, according to the Forbes Global List 2023.
Looking at its financials, the company reported a significant increase of 75% in interest earned from Rs. 74887 Cr in FY22 to Rs. 76496 Cr in FY23. Net profit after tax increased 14% from 1.4 billion won. 18768 Cr in FY22 to Rs. 21178 Cr in FY23. Net interest in FY23 was Rs 14363 crore compared to Rs 14030 crore in FY22.
The three-year average RoE and RoCE are 20.9% and 9.12%, respectively, indicating that the company is using its resources efficiently and generating good returns for shareholders. The 3-year average net profit margin is 24.62%, making PFC one of the low PE stocks under Rs 500.
The promoters’ stake is high at 55.99% and this ratio has remained consistent in the last quarter as well. FII holdings are 17.85% as of December 2023.
Low PE Stocks Under Rs 500 #5: REC
recordingEstablished in 1969 to provide energy to agricultural pump sets for irrigation purposes to reduce agricultural dependence on monsoon, REC is registered with RBI as a Non-Banking Finance Company (NBFC), Public Finance Institution (PFI) and Infrastructure Finance Company ( IFC).
REC provides long-term loans and other financial instruments to states, central and private entities to create infrastructure assets for the country. It finances power sector infrastructure, renewable energy and new technologies, and the infrastructure and logistics sector (non-power). We operate nationwide through 22 state offices.
It also played an important role in government projects in the power sector and was associated with many government schemes. As of March 31, 2023, REC’s loan portfolio was classified as 39% in power generation business, 11% in transmission business, 37% in distribution business, 7% in renewable energy business, and 6% in STL/RBPF.
The company’s financial statement shows that its revenue grew by 0.5% from FY22 to FY23 from ₹39269 crores to ₹39478 crores respectively. The company’s net profit increased by 11% from ₹10036 crores in FY22 to ₹11167 crores in FY23. The last stock in the list of low PE stocks under Rs 500 is REC, as it has a 3-year average RoE and RoCE of 20.8% and 9.17%.
The three-year average net profit margin is 25.80%. The promoters’ stake is high at 52.63%, which has remained consistent over the past few quarters. FII holding is 20.60%.
List of other stocks with low PE
conclusion
This article covers some stocks with a PE below 500. We looked into their business and finances. A low PE ratio means the stock is either cheaper than other stocks or people may not trust it. This could be a good deal or a sign of trouble. Investors should also look at other things to decide if it is a good investment.
Therefore, further analysis and understanding of risk and return characteristics before investing is important. Let us know what you think about these companies in the comments below.
Written by Ashish Agarwal
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