At ₹419, Is It Time To Put Suprajit Engineering Limited (NSE:SUPRAJIT) On Your Watch List?

Suprajit Engineering Limited (NSE:SUPRAJIT), might not be a large cap stock, but it saw a significant share price rise of over 20% in the past couple of months on the NSEI. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Suprajit Engineering’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Suprajit Engineering

What is Suprajit Engineering worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 9.10% above my intrinsic value, which means if you buy Suprajit Engineering today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is ₹384.20, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Suprajit Engineering’s low beta implies that the stock is less volatile than the wider market.

What does the future of Suprajit Engineering look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Suprajit Engineering's earnings over the next few years are expected to increase by 77%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? SUPRAJIT’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on SUPRAJIT, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. In terms of investment risks, we've identified 1 warning sign with Suprajit Engineering, and understanding this should be part of your investment process.

If you are no longer interested in Suprajit Engineering, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.