Is Now The Time To Look At Buying Ashoka Buildcon Limited (NSE:ASHOKA)?

Ashoka Buildcon Limited (NSE:ASHOKA), is not the largest company out there, but it saw significant share price movement during recent months on the NSEI, rising to highs of ₹271 and falling to the lows of ₹216. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Ashoka Buildcon's current trading price of ₹225 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Ashoka Buildcon’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Ashoka Buildcon

Is Ashoka Buildcon Still Cheap?

Great news for investors – Ashoka Buildcon is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 10.59x is currently well-below the industry average of 27.08x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Ashoka Buildcon’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Ashoka Buildcon generate?

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. Though in the case of Ashoka Buildcon, it is expected to deliver a negative earnings growth of -16%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Although ASHOKA is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about whether you want to increase your portfolio exposure to ASHOKA, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on ASHOKA for some time, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about Ashoka Buildcon as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Ashoka Buildcon has 2 warning signs and it would be unwise to ignore them.

If you are no longer interested in Ashoka Buildcon, 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.