Undervalued Waste Management Stocks to Add to Your Watchlist
An effective way to assess whether a stock is undervalued or overvalued is to analyze key metrics such as the price-to-earnings ratio (P/E) and the industry average P/E ratio.
The P/E ratio, or price-to-earnings ratio, compares the current stock price to a company’s earnings per share (EPS) and serves as a widely accepted indicator for determining the value of a stock.
If a company’s P/E ratio is significantly higher than the industry average, it may indicate that the stock is overvalued because investors are paying a premium for earnings.
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Conversely, a P/E ratio that is significantly lower than the industry average could indicate that the stock is undervalued, potentially representing a buying opportunity.
Below are some waste management stocks that are currently trading at a lower P/E ratio than the industry average:
With a market capitalization of Rs. 2,108.8 crore, shares of a leading company in India’s municipal solid waste management industry rose 2.1 percent to Rs. 756 on the BSE on Friday.
The company’s revenue from operations stood at Rs. 227 crore in Q1FY25, up 2.3 percent year-on-year from Rs. 222 crore in Q1FY24, but profit after tax declined 8.7 percent to Rs. 21 crore from Rs. 23 crore during the same period.
The stock’s P/E ratio is 24.8 compared to the industry’s P/E ratio of 33.1. This indicates that the stock is trading at a lower price or, in other words, is undervalued.
The company reported a net profit margin of 11.44 percent in fiscal 2024 (up from 9.88 percent in fiscal 2023) and an operating margin of 17.02 percent (up from 15.06 percent in the same period).
The stock has achieved a multibagger return of almost 117 percent over the past year and a positive return of around 50 percent since the beginning of the year.
Antony Waste Handling Cell Limited is engaged in the business of mechanized street sweeping, waste collection and transportation.
With a market capitalisation of Rs 4,627.6 crore, shares of a company offering water and sewerage infrastructure solutions rose 1.12 per cent to Rs 847.95 on the BSE on Friday.
The company’s revenue from operations stood at Rs. 206 crore in Q1FY25, up 49.3 percent from the same period last year (Q1FY24, Rs. 138 crore). Profit after tax rose 60.8 percent from Rs. 23 crore to Rs. 37 crore during the same period.
The stock’s P/E ratio is 27.8 compared to the industry’s P/E ratio of 43.5. This indicates that the stock is trading at a lower price or in other words, the stock is undervalued.
The company reported a net profit margin of 19.24 percent in FY24 (down from 20.22 percent in FY23) and an operating margin of 28.19 percent to 26.85 percent (during the same period).
The stock has achieved a multibagger return of almost 198 percent over the past year and a positive return of around 86.8 percent since the beginning of the year.
Established in 2010, EMS Ltd provides a range of services including EPC and O&M in wastewater solutions, water supply systems and sewerage projects to government agencies and local municipalities.
The company is also active in power transmission and distribution as well as in the manufacture of building products.
With a market capitalization of Rs 8,366.5 crore, shares of a global leader in water industry rose 2.8 percent to Rs 1,376 on the BSE on Friday.
The company’s revenue from operations stood at Rs. 626 crore in Q1FY25, up 13.2 percent from the same period last year (Q1FY24, Rs. 553 crore). Profit after tax rose 10 percent from Rs. 50 crore to Rs. 55 crore during the same period.
The stock’s P/E ratio is 33.7 (compared to the industry’s P/E ratio of 38.8). This suggests that the stock is trading at a lower price or, in other words, the stock is undervalued.
The company reported a net profit margin of 9.09 percent in fiscal 2024 (up from 0.05 percent in fiscal 2023) and an operating margin of 12.24 percent to 14.37 percent in the same period.
The stock has achieved a multibagger return of almost 177.6 percent over the past year and a year-to-date return of around 111.3 percent.
VA Tech Wabag Limited is engaged in the design, supply, installation, construction, operation and maintenance of plants for drinking water treatment, waste water treatment, industrial water treatment and desalination including energy generation from biogas and sludge management.
Written by Shivani Singh
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