Should You Think About Buying Ashoka Buildcon Limited (NSE:ASHOKA) Now?

Ashoka Buildcon Limited (NSE:ASHOKA), might not be a large cap stock, but it saw a significant share price rise of 35% in the past couple of months on the NSEI. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Ashoka Buildcon’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Ashoka Buildcon

What Is Ashoka Buildcon Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 0.08% above our intrinsic value, which means if you buy Ashoka Buildcon today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is ₹220.62, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Ashoka Buildcon’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Ashoka Buildcon?

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 -1.6%, 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? ASHOKA seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on ASHOKA for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on ASHOKA should the price fluctuate below its true value.

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. Every company has risks, and we've spotted 2 warning signs for Ashoka Buildcon you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com