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.

Mawana Sugars

Mawana Sugars is among the cheapest sugar stocks that is currently available. The reasons for discounting of the stock is not known. Mawana Sugars produces white sugar, refined sugar, specialty sugars and IP grade sugar for the pharmaceutical segment. The company also has a distellary and power co-generation unit.

MSL has sugar refineries at Titawi and Nanglamal in collaboration with Tate and Lyle of UK. Sugar prices have gone up in the recent past and this is reflecting in the results of most of the sugar companies. In the sugar season 2017-2018 it is expected to be much better with the production of sugarcane and recovery expected to continue from the previous year. The Government has also initiated reforms in the sugar sector and resumption of economic growth  is likely to accelerate the turnaround of the Company.

Mawana Sugars is taking steps maximize operational efficiencies and optimize costs to lower the cost of production of sugar. The company has outlined a road map with ambitious cane development targets which will increase the recovery of sugar and to increase the profitability of sugar integrated businesses, such as cogeneration and distillery operations. Mawana Sugars also plans to lower its financial costs by increasing production volumes, and cutting running cost through man power reduction. We believe that the stock is the cheapest bet at the current levels of Rs 78, among sugar stocks and is a good turn around story. If the company's plans to reduce costs through operational efficiencies fructifies, the stock is a good share to buy under Rs 100. Check stock quote of Mawana Sugars here

Gitanjali Gems

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.

Check stock quote of Gitanjali 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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