What Is S Chand and Company Limited's (NSE:SCHAND) Share Price Doing?

S Chand and Company Limited (NSE:SCHAND), might not be a large cap stock, but it led the NSEI gainers with a relatively large price hike in the past couple of weeks. The company's trading levels have reached its high for the past year, following the recent bounce in the share price. Less-covered, small caps tend to present 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? Today we will analyse the most recent data on S Chand’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for S Chand

What's The Opportunity In S Chand?

According to our valuation model, S Chand seems to be fairly priced at around 8.8% below our intrinsic value, which means if you buy S Chand today, you’d be paying a reasonable price for it. And if you believe the company’s true value is ₹348.67, then there’s not much of an upside to gain from mispricing. Furthermore, S Chand’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will S Chand generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. S Chand's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? SCHAND’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 track record of its management team. 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 an eye on SCHAND, 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'd like to know more about S Chand as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 3 warning signs with S Chand, and understanding these should be part of your investment process.

If you are no longer interested in S Chand, 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.