Why Triveni Engineering & Industries Limited (NSE:TRIVENI) Could Be Worth Watching

Triveni Engineering & Industries Limited (NSE:TRIVENI), is not the largest company out there, but it saw a decent share price growth of 10% 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. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Triveni Engineering & Industries’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Triveni Engineering & Industries

Is Triveni Engineering & Industries Still Cheap?

The share price seems sensible at the moment according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that Triveni Engineering & Industries’s ratio of 25.05x is trading slightly below its industry peers’ ratio of 28.51x, which means if you buy Triveni Engineering & Industries today, you’d be paying a decent price for it. And if you believe that Triveni Engineering & Industries should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. In addition to this, it seems like Triveni Engineering & Industries’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 does the future of Triveni Engineering & Industries look like?

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. In the upcoming year, Triveni Engineering & Industries' earnings are expected to increase by 35%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in TRIVENI’s positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at TRIVENI? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on TRIVENI, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for TRIVENI, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Every company has risks, and we've spotted 3 warning signs for Triveni Engineering & Industries (of which 1 is significant!) you should know about.

If you are no longer interested in Triveni Engineering & Industries, 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.