Is Shaily Engineering Plastics Limited (NSE:SHAILY) Potentially Undervalued?

While Shaily Engineering Plastics Limited (NSE:SHAILY) might not have the largest market cap around , it saw a significant share price rise of 35% in the past couple of months on the NSEI. The company is inching closer to its yearly highs following the recent share price climb. Less-covered, small caps tend to present 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? Let’s take a look at Shaily Engineering Plastics’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Shaily Engineering Plastics

What Is Shaily Engineering Plastics Worth?

The stock is currently trading at ₹1,121 on the share market, which means it is overvalued by 20% compared to our intrinsic value of ₹931.23. This means that the opportunity to buy Shaily Engineering Plastics at a good price has disappeared! Furthermore, Shaily Engineering Plastics’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.

Can we expect growth from Shaily Engineering Plastics?

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. 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. With profit expected to grow by 25% over the next year, the near-term future seems bright for Shaily Engineering Plastics. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in SHAILY’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe SHAILY should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on SHAILY for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for SHAILY, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

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

If you are no longer interested in Shaily Engineering Plastics, 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.