Profitable companies with high ROCE and PE multiple below 10
Markets were quite wobbly today and ended with a modest loss. However, some companies are not just available at a bargain, but also are fundamentally strong. Read on to find out more.
Markets are in a serious decline mode for the past nine months and this can be very well attributed to various domestic and global factors. Moreover, this has resulted in continuous selling from the Foreign Institutional Investors (FII) as evident from the below graph.
Moreover, you may also notice that as the period moved ahead from June 2021 to May 2022, the selling pressure from FIIs in the cash segment intensified.
At present, the outcome of the US Federal’s FOMC meeting is something to watch, as their comments and actions would likely decide the move of the FIIs. Having said that, the Price to Earnings (PE) ratio has also taken a hit.
As can be seen from the above graph, the Nifty 50’s PE is presently trading below its 10-Year average. Moreover, if you observe closely, then it is also nearing the lows made during March 2020 market crash.
Hence, accumulating quality stocks that are available at bargain makes more sense. In this article, we would be listing top profitable businesses that have higher Return on Capital Employed (ROCE) and PE multiple below 10.
|
Stocks
|
CMP (Rs)
|
PE TTM
|
3-Year Average ROCE (%)
|
2-Year Net Profit Growth (%)
|
|
Power Finance Corporation Ltd.
|
102.6
|
1.9
|
30.6
|
583.3
|
|
REC Ltd.
|
113.5
|
2.2
|
29.4
|
385.5
|
|
Jindal Stainless Ltd.
|
105.0
|
2.9
|
21.5
|
1,232.3
|
|
Tata Steel Ltd.
|
996.2
|
3.0
|
15.6
|
758.6
|
|
Housing and Urban Development Corporation Ltd.
|
35.0
|
4.1
|
20.8
|
69.4
|
|
Indian Railway Finance Corporation Ltd.
|
20.8
|
4.5
|
21.1
|
128.0
|
|
Shyam Metalics and Energy Ltd.
|
310.2
|
4.6
|
25.6
|
440.4
|
|
Jindal Steel & Power Ltd.
|
348.3
|
5.3
|
16.9
|
443.3
|
|
Coal India Ltd.
|
192.2
|
6.8
|
20.3
|
44.3
|