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.
If you leave all other things aside and purely focus on the dividend yields, you realize that Mangalore Refineries and Petrochemicals (MRPL) offers you a dividend yield of as much as 5 per cent. When this happens the chances of a huge downward slide in the share price is very low.
Apart from this, MRPL in the next three years could be an excellent stock in the making. The company has lined up plans for two major projects that includes, upgradation of refinery to meet and further expansion of its capacity from 15 mmtpa to 25 mmtpa.
This is also a company that can increase distillate yields and is very well suited to handle heavy crude. All this may help to improve the gross refining margins going ahead.
The stock of MRPL is very cheap on the valuations front. The company can report an EPS of Rs 16 2019. This means the stock is available at a p/e of just 7.6 times considering the present market value of Rs 122. The price to book also is less than 1.8 times, the likely forward book value of Rs 66.5 by 2019.
The stock which was consistently trading over the Rs 130 mark, has dropped to Rs 122, in line with the weakish market sentiments. This makes the stock reasonably valued for long term gains. Although this stock is not exactly below Rs 100, if it dips to slightly lower levels of Rs 110, it should be a good pick.
Trident is a company that is engaged in the manufacture of paper, home textiles, yarn, energy and chemicals. For the first quarter ended June 30, 2017, the company did perform well with margins improving in the paper and chemical business.
The textiles also saw an imporvement in the EBIT margins. The other good thing about the stock is that promoters continue to have a very high holding of almost 65 per cent in the company.
As economic growth increases volumes in the paper and the chemical business is likely to be robust.
Trident: Not very expensive fundamnetally
Trident, which is trading at Rs 98, is a good stock to buy under Rs 100. This is also because the stock is not very expensive, given the huge runup that we have seen in the markets. In fact, it is very difficult to find undervalued stocks under Rs 100 at the moment. Coming to the fundamentals of the company the company can report an EPS of Rs 10 for 2018-19. This means the price to earnings ratio for the company is not too expensive at the current levels of Rs 98. In fact, it is just under 10 times, which makes the stock not too expensive at the current levels.
The Gitanjali Group (GG) is one of the top integrated jewelery manufacturers not only in India, but, also around the world. The group owns some very fine brands in Gili, Asmi etc.
In fact, GG as a whole owns more than 75 brands. They have a heavy retail presence in many countries including the United States, where they have 120 stores and about 500 retailers. The group also owns 200 stores and has 150 franchisee shops.
In the last few quarters we have seen some recovery in earnings for Gitanjali Gems. In fact, the company also declared a small dividend of 5 per cent. Gitanjali Gems has a huge book value of Rs 380 and the stock is quoting at just about Rs 64, which makes the price to book at just around 0.17 times.
This is unheard of when the Sensex is fast approaching the 32,000 points. Gitanjali Gems is a good bet for those willing to take risk. At Rs 64, the downside seems to be very limited. The stock is available at a p/e of just about 7 times one year forward earnings. A good share under Rs 100 to buy and sell on rallies.
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.
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.
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.
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: The best dividend yield companies in India