Is Now The Time To Look At Buying Patel Engineering Limited (NSE:PATELENG)?

While Patel Engineering Limited (NSE:PATELENG) might not have the largest market cap around , it saw a decent share price growth of 17% on the NSEI over the last few months. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today we will analyse the most recent data on Patel Engineering’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Patel Engineering

Is Patel Engineering Still Cheap?

Good news, investors! Patel Engineering is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is ₹93.17, but it is currently trading at ₹59.74 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Patel Engineering’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Patel Engineering?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Patel Engineering, it is expected to deliver a relatively unexciting earnings growth of 0.8%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Patel Engineering, at least in the near term.

What This Means For You

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

Are you a potential investor? If you’ve been keeping an eye on PATELENG 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 PATELENG. 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. When we did our research, we found 3 warning signs for Patel Engineering (1 doesn't sit too well with us!) that we believe deserve your full attention.

If you are no longer interested in Patel 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.