Is Now An Opportune Moment To Examine Triveni Turbine Limited (NSE:TRITURBINE)?

While Triveni Turbine Limited (NSE:TRITURBINE) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the NSEI over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Triveni Turbine’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Triveni Turbine

What's the opportunity in Triveni Turbine?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Triveni Turbine’s ratio of 20.69x is trading slightly above its industry peers’ ratio of 20.04x, which means if you buy Triveni Turbine today, you’d be paying a relatively sensible price for it. And if you believe that Triveni Turbine should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. In addition to this, it seems like Triveni Turbine’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s trading around the price multiples of other industry peers. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will Triveni Turbine 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. However, with a negative profit growth of -7.1% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Triveni Turbine. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? TRITURBINE seems priced close to industry peers 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 optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on TRITURBINE, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on TRITURBINE for a while, now may not be the most advantageous time to buy, given it is trading around industry price multiples. This 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 crystallize your views on TRITURBINE should the price fluctuate below the industry PE ratio.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Case in point: We've spotted 2 warning signs for Triveni Turbine you should be aware of.

If you are no longer interested in Triveni Turbine, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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

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.