Low PE Stocks Under Rs 500 – Stock Analysis And More

Low PE Stocks Under Rs 500: A Low PE ratio often signals hidden investment potential, presenting investors with opportunities to secure bargains or raising concerns about future growth and stability. In this article, we embark on a journey to discover some fundamentally strong stocks under Rs 500 with low PE ratios, delving into their business fundamentals and financial profiles.

Please read this article to learn about Low PE Stocks Under Rs 500, But before we move ahead, let’s understand what a price-to-earnings (P/E) ratio is. The price-to-earnings ratio is a financial metric used to evaluate the valuation of a company’s stock by comparing its current market price per share to its earnings per share (EPS).

The formula for calculating the P/E ratio is: P/E Ratio = Market Price per Share / Earnings per Share

List of Low PE Stocks Under Rs 500

Low PE Stocks Under Rs 500 #1: Oil & Natural Gas Corporation

Oil & Natural Gas Corporation, or ONGC, is a Maharatna company and India’s largest crude oil and natural gas company, accounting for around 71% of domestic output. ONGC owns and operates several segments, including upstream and downstream drilling, refinery, petrochemical, liquefied natural gas, renewables, and others. It owns HPCL, MRPL, Petronet LNG, Prize Petroleum, etc.

Looking at the financials, the company reported a significant 29% increase in revenue from operations from Rs. 531792 Cr in FY22 to Rs. 684829 Cr in FY23. The net profit after tax decreased by 33% from Rs. 49294 Cr in FY22 to Rs. 32777 Cr in FY23. This was due to the sudden rise in production and transportation costs, which grew by 47.22% and cost ~47% of FY23’s revenue.

The 3-year average RoE and RoCE stand at 13.9% and 13.0%. The 3-year average net profit margin is 7.19%, so ONGC is one of the Low PE Stocks Under Rs 500. The debt-equity ratio stands at 0.46 times, which is way below the threshold level of 2 times. The interest coverage ratio of 11.07 times indicates it generates enough returns to pay its interest ~11 times.

The promoter’s shareholding is high, with 58.89% of shares as of December 2023, and this percentage has been consistent for the last seven quarters. The FII holdings stand at 9.20%.

Low PE Stocks Under Rs 500 #2: Coal India

Coal India is a key player in India’s energy landscape, mainly engaged in the mining and production of coal along with coal washeries. Established in 1975, CIL emerged from the government’s takeover of private coal mines, evolving into a Maharatna company, a prestigious designation reserved for select state-owned enterprises.

From its modest beginnings with a production of 79 million metric tons (MTs), CIL has ascended to become the largest coal producer globally, boasting 322 mines as of April 1, 2023, comprising a mix of underground, opencast, and mixed mines. Its reach extends beyond coal, as it serves major consumers in the power and steel sectors, with additional clientele in cement, fertilizers, and brick kilns.

CIL contributes 85% of the total domestic coal production and fulfills 75% of coal-based generation needs. Moreover, it satisfies 55% of the nation’s power generation and 40% of its primary commercial energy requisites, emphasizing its critical role in the country’s energy ecosystem.

Looking at the financials, the company reported a significant 27% increase in revenue operations from Rs. 100562 Cr in FY22 to Rs. 127627 Cr in FY23. The net profit after tax increased by 62% from Rs. 17,464 Cr in FY22 to Rs. 28125 Cr in FY23. The 3-year average RoE and RoCE stand at 46.8% and 56.6%. The 3-year average net profit margin is 17%.

The debt-equity ratio stands at 0.09 times, which is way below the threshold level of 2 times. The interest coverage ratio of 50.8 times indicates that Coal India is generating enough returns to pay its interest ~50 times. Coal India was in second on the list of Low PE Stocks Under Rs 500.

The promoter’s shareholding is high, with 63.13% of shares as of December 2023, which has decreased by 3% compared to March 2023. The FII holdings stand at 8.59%.

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Low PE Stocks Under Rs 500 #3: Bank of Baroda

Bank of Baroda (BOB or BoB) is an Indian nationalized bank that began operations way back in 1908 in the region of Baroda, which is now known as Vadodara. The bank was founded by Sayajirao Gaekwad III, the Maharaja of Baroda. It was later nationalized in 1969.

Bank of Baroda is the 3rd largest Indian bank by deposits of Rs. 12.34 lakh crore and has operations in over 17 countries, catering to over 15.3 million customers. BOB provides retail banking, rural and agribusiness banking, corporate banking, insurance, and mutual fund services.

The bank’s total deposits increased from Rs. 10.45 lakh crore in FY22 to Rs. 12.03 crore in FY23, which increased by 15.1%. Total advances during the same period increased from Rs. 8.18 lakh crore in FY22 to Rs. 9.7 lakh crore in FY23, growing by 18.5%. BOB registered a net interest income of Rs. 41,356 Cr, which increased by 26.8% from Rs. 32,621 Cr in FY22.

During this period, the net profits of the company nearly doubled, growing from Rs. 7272 crores in FY22 to Rs. 14,110 crores in FY23. The 3-year average RoE and RoCE stand at 9.07% and 4.50%. The 3-year average net profit margin is 9.35% and this banking stock is one of the Low PE Stocks Under Rs 500

The promoter’s shareholding as of December 2023 is 63.97%, which has remained constant for previous quarters. The FII holdings stand at 12.27%.

Low PE Stocks Under Rs 500 #4: Power Finance Corporation

Power Finance Corporation (PFC) stands as a pivotal entity in India’s financial and power sectors. Established in 1986, PFC holds the distinction of being the first Maharatna in the financial space. Registered with the Reserve Bank of India as an Infrastructure Finance Company (IFC), PFC operates as a Systemically Important Non-Deposit Non-Banking Financial Company (NBFC), underscoring its critical role in the infrastructure landscape.

As a key financial partner for the Government of India in the power sector, PFC extends crucial financial assistance to bolster India’s energy infrastructure. With the majority stake owned by the Indian government, PFC was ranked #378 in terms of assets according to the Forbes Global List 2023.

Looking at the financials, the company reported a significant 75% increase in interest earned from Rs. 74887 Cr in FY22 to Rs. 76496 Cr in FY23. The net profit after tax increased by 14% from Rs. 18768 Cr in FY22 to Rs. 21178 Cr in FY23. The net interest earned for FY23 stands at Rs 14363 crore, compared to Rs 14030 crore in FY22.

The 3-year average RoE and RoCE stand at 20.9% and 9.12%, respectively, indicating the company is efficiently using its resources and generating good returns for its shareholders. The 3-year average net profit margin is 24.62%, and this is why PFC is one of the Low PE Stocks Under Rs 500

The promoter’s shareholding is high, with 55.99% of shares, and this percentage has been consistent in the past quarters. The FII holding is 17.85% as of December 2023.

Low PE Stocks Under Rs 500 #5: REC 

REC, established in 1969 to energize agricultural pump sets for irrigation purposes to reduce the dependency of agriculture on monsoons, REC is registered with the RBI as a Non-Banking Finance Company (NBFC), Public Financial Institution (PFI), and Infrastructure Financing Company (IFC).

REC provides long-term loans and other financing products to state, central, and private companies to create infrastructure assets in the country. It finances power sector infrastructure, renewable energy and new technologies, and the infrastructure & logistics sector (non-power). It has a countrywide presence through 22 state offices.

It also played an important role in the projects of the government in the power sector and was associated with many government schemes. REC’s loan portfolio was categorized as 39% into generation projects, 11% into transmission projects, 37% into distribution projects, 7% into renewable energy projects, and 6% in STL/RBPF as of March 31, 2023.

The financial statement of the company indicates that revenue has increased by 0.5 percent from ₹ 39269 crores to ₹ 39478 crores from FY22 to FY23, respectively. The net profits of the company have increased by 11 percent, from ₹10036 crores in FY22 to ₹11167 crores in FY23. The last stock in the list of Low PE Stocks Under Rs 500 is REC and that is due to its 3-year average RoE and RoCE stand at 20.8% and 9.17%.

The 3-year average net profit margin is 25.80%. The promoter’s shareholding is high, with 52.63% of shares, and this percentage has been consistent in the last few quarters. The FII holding is 20.60%.

List of Other Stocks With Low PE

Conclusion

In this article, we covered some of the low PE stocks under 500. We looked into their business and financials. A low PE ratio means the stock might be cheaper than others or people might not trust it, which could be a good deal or a sign of trouble. Investors need to look at other things too to decide if it’s a good investment.

So, further analysis and understanding of risk and return characteristics before investing is important. Do let us know your thoughts about these companies in the comments below.

Written by Ashish Agarwal

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