Why all producer manufacturing companies are on rise, is it because of government opex expectation ? Is it due to momentum ? Is it due to good quarterly results ? Is it because of robust future forecast by their corporate ? Or is it because of Modi 3.0 and government stability ? Well all these reasons are perhaps true.
But some of these companies on last 2 quarters have crossed 100 PE multiple and yet are sustaining, so what is it that investors are still eyeing that are keeping these companies in the radar of many investors. Lets discuss.
Bosch Limited: Currently at 32327 as on 17th July 2024, Bosch in its recent earning announcement showed improvement in all three front, revenue, profitability and margin are growing, against its peers it is trading at lower PE. In last few trading session it showed extreme volatility and after result announcement we also saw gradual profit booking. Now at chart it has broken its resistance of 32000 and looks like it is now ready to rally but one need to be aware of it extreme volatile nature and its beta of .61 against index.
Exide Industry: Again a company which is trading at a PE multiple of 52 where as sector is higher. Though on margin front in Q4 it has shown decline and yet momentum is towards upside. Since April 8th daily volume has seen spike and company seems to be taken the benefit of EV and green energy drive in the market.
Havells India: At 90 PE multiple looks expensive but upcoming earning and demand of electrical part in India is giving it future outlook a consistent view w.r.t. high margin and profitability. Margins have seen a sudden spike in Q4 numbers and thats the reason why it is still in radar of many.
Crompton Greaves: On chart it looks extremely bullish and at RSI of 73 stocks seems to be on a ride, company has shown a spike in margin in Q4 earning against Q3 but year on year margins have declined. It has also launched 4 new products in B2C segment recently.
Polycab India: Will it ever trade at a PE multiple of over 100 because most of its peers are. Stock keep witnessing profit booking at higher levels that break the momentum. Though the revenues have grown YOY but company have declared a hit on margin in Q4 result.
Voltas Limited: Only thing that is scary about Voltas is its PE multiple. It is trading at PE multiple of 193 currently and is at its all time high. On chart it looks extremely bullish but 193 PE multiple can send it to a long consolidation zone.
Astral Limited: PE multiple of 110 and on chart after making all time high stock shows sudden fall. In march and may same thing has happen where after making all time high, suddenly investors lose there positions and next day we see sudden fall. It has extreme volatile nature and high PE makes it difficult to trade.
Cummins India: Cummins has come up with strong numbers in Q4, against its peers company PE is also seems to be in control where as some of the peers are above 100 PE. If cummins also reaches at 100 + PE ratio stock can double from here.
Bharat Forge: Company has crossed Nomura price target of 1431 and now is trading at all time high with PE multiple of 80. QoQ company has shown some decline in margin.
Siemens India: With revenue of over 194 billion INR it’s a giant and yet it is trading at PE ratio of 59. In one year stock has given 109% return and with low PE against its peers momentum in stock can continue. Stock has broken its previous resistance of 7350 and looks in strong momentum with RSI also does not looks overbought.
ABB India: We have written a detailed article on ABB, do check that out
Author View: I personally feel that there are two important factors that will play their important role here. One is NIFTY positioning currently and other is PE ratio of these companies. Nifty is at its all time high, though we don’t see any reason of profit booking from here but that reason can come any time. And when that will happen all these stocks will be available at lower valuation and that will be a better time to invest. That time also one must see if PE multiple is under-control and company outlook is positive.
Disclaimer :- All the facts & the figure presented in the article are taken from internet and all the opinion presented in the article are authors personal opinion and this is not at all an investment suggestion. Before any buying and selling in the stock, please check with your investment advisor.
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