11 Undervalued Stocks with High growth potential for One year

The basic and the most fundamental theory of equity investing will tell you that the investors should buy stocks that are trading at reasonable valuations. Generally, valuations are considered reasonable, if they are trading below their investment parameters like earnings, margins and valuation ratios. Therefore, parameters that are above average are expected to come down and those below average are expected to rise.

Price-to-earnings (PE) ratio is the most basic and one of the widely used valuation parameter for identifying and buying stocks. The PE ratio fluctuates around its long-term average and indicates how much investors are willing to pay for a stock for every rupee it earns that is earning per share (EPS).

Let’s look at some best undervalued stocks or stocks which are at reasonable valuations that is indicating highest growth prospects and upside in stock prices for next one year.

 

BEML Ltd :

Bharat Earth Movers Limited, now known as BEML, is an Indian public sector undertaking, with headquarters in Bengaluru. It is founed in 1964 and has approximate revenues of 2,978 crores INR (US$470 million). It manufactures a variety of heavy equipment, such as that used for earth moving, transport and mining. Last year 2017 this stock was trading and made 52 week of around Rs 1850 and than it tumbled till around 580 levels as on 1 October 2018. Now going forwards it will be one of the golden opportunity for short term and long term. We are looking for almost 100 percent upside in next one year and so we expect this stock to go above 1000 plus levels.

 

Ashoka Buildcon Ltd :

 

An infrastructure development company, Ashoka Buildcon is having expertise in building highways, bridges, power transmission and distribution infrastructure on EPC (engineering, procurement and construction) basis. The government’s big bang push on infrastructure and road development projects are key triggers for the industry going forward and will help companies like Ashoka and others. As per the current stock price on 1 October 2018 it is trading around Rs 100 and we expect good upside movement of around 100 percent in next one year.

 

ESCORTS Ltd :

 

The Escorts Group is an Indian engineering company that operates in the sectors of agri-machinery, construction and material handling equipment, and railway equipment. Headquartered in Faridabad, Haryana, the company was launched in 1944 and has marketing operations in more than 40 countries. It touched 52 week high Rs 1006 and than crashed around 40 percent from april 30 2018. Now currently it is trading around 600 levels so it showing good signs of bouncing back till Rs 800 which is roughly more than 30 percent in one year.

 

Bharat Electronics Ltd :

 

A Navratna Public Sector Undertaking (PSU), Bharat Electronics is involved in designing, manufacturing and supplying electronic products/systems for defence requirements. Its products include weapon systems, radar, fire control systems, and communication transmitters and receivers. As per the stock price on 1 October 2018 it is trading around Rs 80 and we expect good share price movement upside of around 80 Percent in next one year.

 

Future Consumer Ltd :

Future Consumer Ltd was incorporated in the year 1996. Its today’s share price is 38.6.Its current market capitalisation stands at Rs 7394.93 Cr. Over the last 30 days, the FUTURE CONSUMER share price is down 30.1%. And over the last one year, FUTURE CONSUMER share price is down 36.0%. As per our research Future Consumer to become the country’s fifth-largest FMCG company by March 2021. It also assumes the company to contribute over 90 percent of financial year-ending March 2020’s revenues, compared to 74 percent expectations in the next financial year and forecast its revenues to jump 3.2 times by March 2020.
Right now the share price is around 38 so its really a very good opportunity to invest right now. For short term that is one year we are expecting 50 percent upside and long term more than 3 years it can touch Rs 200.

Castrol India Ltd :

 

It is one of the leading manufacturer, distributor and marketer of premium lubricating oils, greases and related services to auto, industrial, marine and oil exploration industries.It also owns around 48% market share in the overall Indian lubricant market. Its part of Castrol Limited UK. According to a recent report by IDBI Capital, strong free cash flow generation, minimal capital requirements, high ROEs and strong payouts make the stock attractive. Currently as on 1 October 2018 the stock is trading around Rs 140 and we are expecting good upside move of 30 percent in share price in next one year.

Jain Irrigation Ltd

 

Jain Irrigation Systems, often known as Jain Irrigation, JISL, or simply Jains, is a multinational organisation based in Jalgaon, India. It was founded in 1989 and has revenues of 6,207 crores INR (2014–2015, US$950 million) JISL employs over 10, 000 employees, and has 32 manufacturing plants. As on 1 October 2018 it is trading around Rs 60 levels and in past it has made a 52 week high of around 150 in Jan 2018. Right now stock is at fairly reasonable valuations so one can look for short term horizon of one year with a minimum 50 percent upside.

Gulf Oil Lubricants :

 

Founded in 2008 it is hardcore player in lubricant industry with operations in auto and industrial segments, Gulf OIl’s business includes manufacturing, marketing and trading auto and non-auto lubricants, and greases. As per our research that the company’s growth will be led by new product launches, expansion of distribution channels and focus on teaming up with more original equipment manufacturers. In addition, improvement in the working capital cycle will improve the balance sheet of the company in next two to three quarters. As on 1 October 2018 share price was around 740 and we expect a strong upside of 40 percent in One year.

 

Persistent Systems Ltd :

 

Persistent Systems is a technology services company. It was founded in 1990 and has revenues of 3,034 crores INR (US$460 million, FY18). Stock just made 52 week high of Rs 915 last month and now it has plunged till around 750 levels as on 1 October 2018 here we can expect a good upmove of around 50 percent in next one year and may cross 1100 plus levels.

 

Jagran Prakashan Ltd :

 

It was founded in 1942. A media and communications company, Jagran Prakashan’s business comprises of newspapers, magazines, below the line marketing solutions, and mobile value-added services. According to a report by Maybank Kim Eng, the stock’s valuations are inexpensive and are supported by attractive free cash flows. As couple of assembly elections will be held by end of 2018 and Indian general elections which will take place in early 2019 will give boost to advertising revenue in coming quarters. We are forecasting very strong demand and also big upsurge in advertising rates that will improve their margins too. As on 1 October 2018 the stock was trading around 115 and we can expect a good upmovement in share prices of around 30 percent in one year.

 

Sadbhav Engineering Limited :

 

It is a civil engineering construction company based in Ahmedabad, Gujarat, India. It was founded in 1988 by Vishnubhai M. Patel. Sadbhav Engineering is involved in the construction of roads, highways, bridges, and mining and irrigation projects. HDFC securities is bullish on the stock due to the company’s robust order book—3-times its 2017-18 revenue—improving debt-equity ratio, expansion in Ebitda margin and new orders from the mining sector. Currently as on 1 october 2018 share price of the company was around 220 and we expect strong upside of more than 50 percent in one year.