Attractive Shares Below Rs 100 To Buy For The Long Term

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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.

Thiru Arooran Sugars

Thiru Arooran Sugars is a stock that has done well for the year ending March 31, 2017 and the stock deserves better discounting. For example, the company reported an EPS of Rs 11.70 for the year ending March 31, 2017. As against this the stock is trading at a p/e of just about 5 times at Rs 55. This is another under Rs 100 stock that has the potential to go all the way. In fact, we believe that with sugar prices staying elevated it is a good time to buy the stock on declines for the longer term.

HCC

Hindustan Construction Company (HCC) is one the top engineering & construction services company in India with some of the most prestigious projects under its belt. The company reported a net profit for Q4 2016-17 at Rs 20.9 crore versus Rs 21.81 crore and turnover for Q4 2016-17 at Rs 1,358 crore as against Rs 1,196 crore in the same period last year.

The company has a good order book position. HCC has secured 7 new orders worth Rs 5,375 crore in the FY 2016-17 and is the lowest bidder in projects worth Rs 2,804 crore. Excluding L1 bids, the order book has grown to a sizeable Rs 20,390 crore from Rs 18,123 crore last year.

There is a high possibility of debt reduction  due to the governments decision to release arbitration awards. Decline in debt is likely to improve the company's cash flow and should drive execution going ahead. The order book also leaves one with optimism.

Not a bad bet at Rs 40. Check stock quote of HCC here

 

IDFC Bank

This is a private sector bank promoted by IDFC. If you have a very long term view of say about 5 years this stock should yield good results. The bank reported decent numbers and the Gross non performing assets was just 3 per cent and the net NPA was 1.14 per cent for the quarter ending March 31, 2017. Most of the private sector banks receive heavy discounting with these kind of NPAs. The EPS of IDFC bank was Rs 3 for FY 2017. This means the stock gets a discounting of near 18 times at the current price of Rs 57. This is reasonable and almost at par with what other banks in the country get. However, if you have a very long term perspective with the net profits and EPS growing you could easily see the stock doubling in the coming years. Not a bad bet at the current levels.

 

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 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 2.22 for the quarter ending March 31, 2017. The company also reported an EPS of Rs 9.06 for FY 2017-18, which makes the stock inexpensive at the current levels of Rs 78. In fact, the price to earnings ratio is a meager 8 times, the current market price of Rs 78. 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 Fertilisers and Chemicals is one of the largest private sector fertilizer producers in India. It is a company promoted by Zuari Industries and operates two nitrogenous fertilizer (urea) plants which located at Gadepan in Kota district of Rajasthan. Chambal Fertilizers is also into power through a power subsidiary Chambal Infrastructure.

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 full year 2016-17 the company reported an EPS of Rs 9.15, which makes the stock inexpensive at the current price of Rs 122, given that the p/e is just about 13 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.

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 10 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 28 is not very expensive. Go for the stock and hold it for the next 2-3 years to make some respectable gains from it.

A list of small cap stocks that you can buy

We have also in the past recommended some small and mid cap stocks that you should own. These have the potential to generate good returns in the coming years. Read by clicking on the links below:

Best small cap stocks to own

Best midcap stocks to own

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

 

 

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