Tanla Solutions and Ceeta Industries may be trading at prices below their likely values. This suggests that these stocks are undervalued, meaning we can benefit when the stock price moves to its true valuation. There’s a few ways you can measure the value of a company – you can forecast how much money it will make in the future and base your valuation off of this, or you can look around at its peers of similar size and industry to roughly estimate what it should be worth. Below, I’ve created a list of companies that compare favourably in all criteria based on their most recent financial data, making them potentially good investments.
Tanla Solutions Limited (BSE:532790)
Tanla Solutions Limited, together with its subsidiaries, provides cloud communication services for mobile operators and enterprises in India and internationally. Tanla Solutions was formed in 1995 and with the company’s market cap sitting at INR ₹3.88B, it falls under the mid-cap stocks category.
532790’s shares are currently trading at -73% under its intrinsic value of INR130.32, at a price of ₹35.00, according to my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. Furthermore, 532790’s PE ratio stands at 10.11x relative to its Software peer level of, 19.97x implying that relative to its peers, 532790 can be bought at a cheaper price right now. 532790 is also in good financial health, as current assets can cover liabilities in the near term and over the long run. 532790 has zero debt on its books as well, meaning it has no long term debt obligations to worry about. Dig deeper into Tanla Solutions here.
Ceeta Industries Ltd. (BSE:514171)
Ceeta Industries Ltd. manufactures and sells pre-stressed concrete poles in India. Founded in 1984, and run by CEO Krishna Poddar, the company employs 21 people and with the company’s market capitalisation at INR ₹85.71M, we can put it in the small-cap group.
514171’s shares are currently floating at around -77% below its actual worth of INR25.28, at the market price of ₹5.91, based on my discounted cash flow model. signalling an opportunity to buy the stock at a low price. Moreover, 514171’s PE ratio is trading at around 3.59x while its Basic Materials peer level trades at, 27.08x implying that relative to other stocks in the industry, we can invest in 514171 at a lower price. 514171 is also a financially robust company, as short-term assets amply cover upcoming and long-term liabilities. More detail on Ceeta Industries here.
Cambridge Technology Enterprises Limited (BSE:532801)
Cambridge Technology Enterprises Limited, a business and technology services company, provides service oriented architecture–based enterprise transformation and integration solutions and services. Started in 1999, and currently lead by Aashish Kalra, the company size now stands at 317 people and has a market cap of INR ₹1.38B, putting it in the small-cap group.
532801’s shares are currently floating at around -75% below its true value of INR278.42, at a price tag of ₹70.15, based on my discounted cash flow model. This mismatch signals an opportunity to buy 532801 shares at a discount. In terms of relative valuation, 532801’s PE ratio is trading at 11.73x compared to its IT peer level of, 19.12x implying that relative to its peers, we can purchase 532801’s shares for cheaper. 532801 is also strong financially, as current assets can cover liabilities in the near term and over the long run. Finally, its debt relative to equity is 29.55%, which has been dropping over time, indicating its capacity to pay down its debt. More on Cambridge Technology Enterprises here.Or create your own list by filtering BSE companies based on fundamentals such as intrinsic discount, health score and future outlook using this free stock screener.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.