Attractive Shares Below Rs 100 To Buy For The Long Term

Here are a few attractive shares investors can buy that are priced below Rs 100. However, these are largely meant for long-term investors.

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Here are a few stocks that are under Rs 100 and could be worthy picks. Buy them if you have a time frame of 2-3 years. It is important to note that before you take position in these stocks, that stocks below Rs 100 tend to be very volatile. So just be careful before buying and ideally set a target. For example, if you see a stock at Rs 82, just wait as you may even get the stock low. Do not rush to buy the stock. At all times the price should be kept in mind. Here are a few stocks to consider.

Triveni Engineering

Sugar prices are rising and with it sugar stocks. Triveni Engineering is one of the largest sugar companies in India, it is also one of the leaders in high speed gears, gearboxes, and water treatment solutions. Sugar stocks have been on fire and most of this has to do with the rise in sugar prices. Triveni is a among the leaders and is likely to benefit from rising sugar prices. The company has a very small equity capital and it reported an EPS of Rs 2.52 for the quarter ending Sept 30, 2016. The company can report an EPS of Rs 10 for FY 2017-18, which makes the stock inexpensive at the current levels of Rs 72. If sugar prices continue to rally, expect a good jump in the share price of Triveni Engineering. This can be a sweetener to your portfolio given the big player that Triveni Engineering is. 

Chambal Fertlizers

Chambal Fertilizers is a good stock to own given the fact that the government is laying an increased emphasis on the agriculture business and a boost to the rural agrarian economy. This is likely to give an impetus to a company like Chambal Fertilizers. The company is a good dividend paying profit making company. For the quarter ending December 2016, the company reported an EPS of Rs 3. For the full year 2016-17 it could report an EPS of Rs 12, which makes the stock inexpensive at the current price of Rs 81.95, given that the p/e is just about 7 times. Fertilizers are likely to get support from the government through various farmer initiatives, which should make Chambal an interesting pick.

We believe that there would be great enhancement by the government for farmers in the coming years. This makes the stock a good bet at the current levels. One has to wait and watch to see if the Union Budget would have any special recommendations for the agricultural sector per se. Watch for this stocks in the days to come. 

Karnataka Bank

This stock is not really under Rs 100, but, is more like Rs 114. The shares of Karnataka Bank are good to buy, and if you get the stock below Rs 100, it is ideal. Karnataka Bank is among the good private sector banks to own for a number of reasons. First is that the stock is available at just 6 times one year forward price to earnings multiple of 6 times. This makes it very inexpensive at the current levels. For the third quarter ending December, the stock's performance was not very great. This saw a sharp dip in the share price of Karnataka Bank. The shares dropped and hence the current market price of Rs 115 makes it not very expensive. The bank declares a good dividend of almost Rs 5 per share, which makes it a good stock to buy at the current levels as the yield itself itself translates into a 3-4 per cent. We believe that the bad non performing assets in the banking sector may have peaked. this makes the stock a good pick at the current levels. Domestic institutions have also been accumulating the shares of bank, making them good picks. We expect that the bank may show a slightly patchy performance i the next 2 quarters after which it should be back on track. 

SI Bank

If you are betting on a stock that is relatively cheap in terms of price to earnings ratio you cannot look beyond South Indian Bank. This is a good stock to own as the p/e is not very high at around 5 times. Yes like other  stocks in the banking sector there are worries on the non performing assets, but, we believe that this should be much better in the coming days. Buy the stock, if you are having a long term holding time frame. Banking shares at some stage are definitely going to show a recovery. SI Bank at Rs 21 is not very expensive. Go for the stock and hold it for the next 2-3 years to make some respectable gains from it.

Andhra Bank

If one is looking at another play on the banking sector, then the ideal belt would be the stock of Andhra bank. The shares have taken a beating in the last few years and have dropped significantly to Rs 50 levels. However, we believe that at some stage you would see some recovery in the stock of Andhra Bank like most other public sector banks. the next few quarters are expected to be bad and thereafter one may see a good recovery. Buy the stock on declines. This year do not expect any dividends from the company owing to the bad performance of the last few quarters. Buy on declines around the Rs 48 levels should work for the stock. A good stocks to own under Rs 100. However, you have to be exceedingly patient to make money from government banking shares. So hold on at least for 3 years at the very least. Watch the quarterly results for the next few quarters and then decide on the stock.

Federal Bank - great stock below Rs 100

At a time when most banks are reporting a poor set if numbers, Federal Bank reported decent quarterly numbers for the period ending Sept 30, 2016. The bank saw its net profits increase to Rs 201 crores from Rs 167 crores in the June quarter. What is most interesting is that the gross non performing assets of the bank dropped to 2.78 per cent from the previous quarters figure of 2.92 per cent. A fall in the non performing assets in the banking sector is unheard of today. The bank reported an EPS of Rs 1.17 for the quarter. We believe that for FY 2017-18, the bank can report an EPS of at least Rs 8, which takes the p/e to 10 at the current levels. A great stock to buy for the long term.

The bank has a solid network and is likely to improve its CASA going forward. Federal Bank has seen its share price drop from levels of Rs 78, to the current levels of Rs 65. If you are a long term investor, you would get the stock at a cheap rate of 8 times p/e. This bank has a solid franchisee and we do not expect the stock to fall too much. It also gives a decent dividend yield, which makes it a worthy pick.

This along with NCC are two stocks that are worth investing under Rs 100. Go for it.

Taxation on shares below Rs 100

It is important to note that if you sell your shares at a profit before one year, you are liable to pay taxes and its does not matter whether your shares are under Rs 100 or not. Short term capital gains tax on shares is applicable if you sell your shares before one year. On the other hand, if you sell your shares after a period of one year, there is no tax that is applicable. So, you need to factor the same before you sell your shares. It is advised that if you are making a decent sum you can also pay the required taxes on the same. There are roumours that the Union Budget 2017-18 could also consider a change in the norms for how capital gains is charged. So far we do not know of any such move. Will have to wait and watch. 

Disclaimer

The article is not a solicitation to buy, sell in securities or other financial instruments mentioned in the article. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and do not accept culpability for losses and/or damages arising based on information in this article.

Also read: A look at the best high return investments in India

Also read: The best dividend yield companies in India

 

 

Story first published: Saturday, August 8, 2015, 9:05 [IST]
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