At ₹322, Is It Time To Put E.I.D.- Parry (India) Limited (NSE:EIDPARRY) On Your Watch List?

E.I.D.- Parry (India) Limited (NSE:EIDPARRY), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NSEI over the last few months, increasing to ₹366 at one point, and dropping to the lows of ₹313. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether E.I.D.- Parry (India)'s current trading price of ₹322 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 E.I.D.- Parry (India)’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for E.I.D.- Parry (India)

What's the opportunity in E.I.D.- Parry (India)?

Great news for investors – E.I.D.- Parry (India) is still trading at a fairly cheap price according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that E.I.D.- Parry (India)’s ratio of 9.39x is below its peer average of 16.03x, which indicates the stock is trading at a lower price compared to the Chemicals industry. However, given that E.I.D.- Parry (India)’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will E.I.D.- Parry (India) generate?

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 grow by 81% over the next couple of years, the future seems bright for E.I.D.- Parry (India). 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? Since EIDPARRY is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. With an optimistic profit 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 capital structure to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on EIDPARRY for a while, now might be the time to enter the stock. Its prosperous future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy EIDPARRY. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. Luckily, you can check out what analysts are forecasting by clicking here.

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This article by Simply Wall St is general in nature. 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.
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