Is It Too Late To Consider Buying Chambal Fertilisers and Chemicals Limited (NSE:CHAMBLFERT)?

Chambal Fertilisers and Chemicals Limited (NSE:CHAMBLFERT), is not the largest company out there, but it saw a decent share price growth of 19% on the NSEI over the last few months. The recent share price gains has brought the company back closer to its yearly peak. As a ₹212b market cap stock, it seems odd Chambal Fertilisers and Chemicals is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Let’s take a look at Chambal Fertilisers and Chemicals’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Chambal Fertilisers and Chemicals

What Is Chambal Fertilisers and Chemicals Worth?

Chambal Fertilisers and Chemicals appears to be overvalued by 28% at the moment, based on our discounted cash flow valuation. The stock is currently priced at ₹530 on the market compared to our intrinsic value of ₹414.55. Not the best news for investors looking to buy! In addition to this, it seems like Chambal Fertilisers and Chemicals’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from Chambal Fertilisers and Chemicals?

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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Chambal Fertilisers and Chemicals' earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in CHAMBLFERT’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe CHAMBLFERT should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on CHAMBLFERT for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for CHAMBLFERT, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. In terms of investment risks, we've identified 1 warning sign with Chambal Fertilisers and Chemicals, and understanding it should be part of your investment process.

If you are no longer interested in Chambal Fertilisers and 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.