S H Kelkar and Company Limited (BOM:539450) is considered a high growth stock. However its last closing price of ₹231.5 left investors wondering whether this growth has already been factored into the share price. Let’s take a look at some key metrics to determine whether there’s any value here for current and potential future investors. Check out our latest analysis for S H Kelkar
Has the 539450 train has slowed down?If you are bullish about S H Kelkar’s growth potential then you are certainly not alone. The consensus forecast from 5 analysts is extremely bullish with earnings per share estimated to surge from current levels of ₹6.52 to ₹13.394 over the next three years. On average, this leads to a growth rate of 23.45% each year, which illustrates a highly optimistic outlook in the near term.
Is 539450 available at a good price after accounting for its growth?
S H Kelkar is looking rather expensive based on its price-to-earnings (PE) ratio of 35.51x. This illustrates that S H Kelkar is overvalued compared to the IN market average ratio of 22.1x , and overvalued based on current earnings compared to the chemicals industry average of 19.84x .
We understand 539450 seems to be overvalued based on its current earnings, compared to its industry peers. But, seeing as S H Kelkar is perceived as a high-growth stock, we must also account for its earnings growth, which is captured in the PEG ratio. A PE ratio of 35.51x and expected year-on-year earnings growth of 23.45% give S H Kelkar a higher PEG ratio of 1.51x. Based on this growth, S H Kelkar’s stock can be considered a bit overvalued , based on fundamental analysis.
What this means for you:
539450’s current overvaluation could signal a potential selling opportunity to reduce your exposure to the stock, or it you’re a potential investor, now may not be the right time to buy. However, basing your investment decision off one metric alone is certainly not sufficient. There are many things I have not taken into account in this article and the PEG ratio is very one-dimensional. If you have not done so already, I highly recommend you to complete your research by taking a look at the following:
- Financial Health: Is 539450’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Past Track Record: Has 539450 been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of 539450’s historicals for more clarity.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.