Looking at Chambal Fertilisers and Chemicals Limited’s (BOM:500085) fundamentals some investors are wondering if its last closing price of ₹166.8 represents a good value for money for this high growth stock. Let’s take a look at some key metrics to determine whether there’s any value here for current and potential future investors. Check out our latest analysis for Chambal Fertilisers and Chemicals
What can we expect from Chambal Fertilisers and Chemicals in the future?Chambal Fertilisers and Chemicals is poised for significantly high earnings growth in the near future. Expectations from 3 analysts are extremely bullish with earnings per share estimated to surge from current levels of ₹11.902 to ₹21.988 over the next three years. This indicates an estimated earnings growth rate of 20.43% per year, on average, which signals a market-beating outlook in the upcoming years.
Is 500085 available at a good price after accounting for its growth?
Chambal Fertilisers and Chemicals is available at a price-to-earnings ratio of 14.01x, showing us it is undervalued relative to the current IN market average of 22.1x , and undervalued based on its latest annual earnings update compared to the chemicals average of 19.84x .
Chambal Fertilisers and Chemicals’s price-to-earnings ratio stands at 14.01x, which is low, relative to the industry average. This already suggests that the stock could be undervalued. But, to properly examine the value of a high-growth stock such as Chambal Fertilisers and Chemicals, we must reflect its earnings growth into the valuation. I find that the PEG ratio is simple yet effective for this exercise. A PE ratio of 14.01x and expected year-on-year earnings growth of 20.43% give Chambal Fertilisers and Chemicals a very low PEG ratio of 0.69x. So, when we include the growth factor in our analysis, Chambal Fertilisers and Chemicals appears relatively cheap , based on fundamental analysis.
What this means for you:
500085’s current undervaluation could signal a potential buying opportunity to increase your exposure to the stock, or it you’re a potential investor, now may be the right time to buy. However, basing your investment decision off one metric alone is certainly not sufficient. There are many things I have not taken into account in this article and the PEG ratio is very one-dimensional. If you have not done so already, I urge you to complete your research by taking a look at the following:
- Financial Health: Is 500085’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Past Track Record: Has 500085 been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of 500085’s historicals for more clarity.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.