When Should You Buy Bodal Chemicals Limited (NSE:BODALCHEM)?

While Bodal Chemicals Limited (NSE:BODALCHEM) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the NSEI. While good news for shareholders, the company has traded much higher in the past year. Less-covered, small caps sees 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 Bodal Chemicals’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Bodal Chemicals

What Is Bodal Chemicals Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 18% below our intrinsic value, which means if you buy Bodal Chemicals today, you’d be paying a reasonable price for it. And if you believe the company’s true value is ₹100.60, then there’s not much of an upside to gain from mispricing. Furthermore, Bodal Chemicals’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Bodal Chemicals?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to more than double over the next couple of years, the future seems bright for Bodal Chemicals. 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? BODALCHEM’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on BODALCHEM, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Bodal Chemicals, you'd also look into what risks it is currently facing. When we did our research, we found 2 warning signs for Bodal Chemicals (1 is a bit unpleasant!) that we believe deserve your full attention.

If you are no longer interested in Bodal Chemicals, 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.