Best Low Priced Stocks In India To Invest

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Now, first the caveat. When we say low priced stocks, we do not mean in terms of stock prices alone, but, also in terms of price to earnings multiples, dividend yields, book value etc.

Chennai Petroleum

Chennai Petroleum is a group company of Indian Oil, but unlike refining peers like HPCL and BPCL, the company gets very poor discounting, which makes it a very good low priced stock to buy. Chennai Petroluem has two refineries. The Manali refinery is a very complex refinery and produces fuel, wax and a host of petrochemical products. The other refinery is at Naggapatinam and produces a host of products like Fuel, Oil, Hexane, Petrochemical feed stocks etc. This is one of the cheapest oil refinery stocks available at the moment and at very cheap valuations.

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Reasons to buy Chennai Petroleum

Chennai Petroleum had a fantastic 2016-17, wherein net profits jumped to Rs 1050 crores from Rs 761 crores in the previous year ending March 31, 2016. That was a smart jump and we believe that the profits would sustain. The one reason for that belief is because there is a high possibility of crude prices remaining lower for a prolonged period of time. When that happens, the margins would continue to sustain. In 2016-17, Chennai Petroleum reported a EPS of Rs 70, which on the current market price of Rs 382 is just about 5 times. Today, the Sensex is trading at a staggering 31,000 points and at this time it is difficult to get stocks, which are barely trading at 5 times p/e. The price to book at 1.82 times is also attractive. The board has declared a staggering dividend of Rs 21 per share and if the momentum of dividend is maintained that in itself is a good 6 per cent tax free dividend yield. This remains one of the best low priced stocks to buy in India.

Gujarat Industries Power

This is another company like Chennai Petroleum which is highly undervalued at the current levels. The reasons for such undervaluation cannot be understood. This company is a government of Gujarat owned company that is into almost all of the different ways to produce power. Gujarat Industries commissioned its first power project, of a 145 MW gas based Combined Cycle Power Plant in February, 1992. Thereafter, it started a 5 MW photovoltaic Solar Power Station in 2012, a Wind Power Projects as different sites in Gujarat in 2017. It also has a 250 MW Lignite based Power Plant at Nani Naroli and a 165 MW Naphtha & Gas based Combined Cycle Power Plant at Vadodara.

Gujarat Industries Power: Relatively cheap on valuations

Gujarat Industries Power is one of the best low priced stocks to invest in India. The company saw its net profits jump from Rs 187.79 crores in 2015-16 to Rs 251 crores in 2017-18. The EPS of the company has moved to Rs 15.16 from Rs 12.45. Now, at the current market price of Rs 102, the stock is available at a trailing p/e of just 6 times. This is just like Chennai Petroleum where the stock remains cheap and one of the best. The dividend yield is a decent 2.59 per cent and the price to book is just about 0.71 times. This is one of the better stocks to buy.

Disclaimer

This article is strictly for informational purposes only. It is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author of this article do not accept culpability for losses and/or damages arising based on information in this article. 

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