Should You Buy PTC India Financial Services Limited (NSE:PFS)?

PTC India Financial Services Limited (NSEI:PFS), a capital markets company based in India, received a lot of attention from a substantial price movement on the NSEI in the over the last few months, increasing to ₹38.4 at one point, and dropping to the lows of ₹26.2. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether India Financial Services's current trading price of ₹26.2 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at India Financial Services’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for India Financial Services

What's the opportunity in India Financial Services?

Good news, investors! India Financial Services is still a bargain right now. According to my valuation, the intrinsic value for the stock is ₹52.31, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Another thing to keep in mind is that India Financial Services’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of returns can we expect from India Financial Services in the future?

Valuation is only one aspect of forming your investment views on India Financial Services. Another thing to consider is whether it is actually a high-quality company. The best type of investment is always in a great company, producing robust returns at a cheap price. We can determine the quality of a stock many ways; one way is to look at how much return it generates relative to the money we’ve invested in the stock. India Financial Services is expected to return 12.20% of your investment in the next couple of years if you buy the stock today. This is a relatively good return on your investment which builds up the case for owning the stock.

What this means for you:

Are you a shareholder? Since PFS is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. 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 PFS for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PFS. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on India Financial Services. You can find everything you need to know about India Financial Services in the latest infographic research report. If you are no longer interested in India Financial Services, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.