Stock Analysis

What Is Finolex Cables Limited's (NSE:FINCABLES) Share Price Doing?

NSEI:FINCABLES
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Finolex Cables Limited (NSE:FINCABLES), 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. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Finolex Cables’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Finolex Cables

What's The Opportunity In Finolex Cables?

Good news, investors! Finolex Cables is still a bargain right now. My valuation model shows that the intrinsic value for the stock is ₹616.20, but it is currently trading at ₹467 on the share market, meaning that there is still an opportunity to buy now. Finolex Cables’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What does the future of Finolex Cables look like?

earnings-and-revenue-growth
NSEI:FINCABLES Earnings and Revenue Growth August 18th 2022

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 Finolex Cables, it is expected to deliver a relatively unexciting earnings growth of 0.9%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Finolex Cables, at least in the near term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since FINCABLES is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on FINCABLES for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy FINCABLES. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

It can be quite valuable to consider what analysts expect for Finolex Cables from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

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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.