Is it not true that the prevailing consumer mentality often revolves around obtaining more value for a smaller expenditure? However, a majority of these consumers are unwilling to either expend more funds or compromise on the caliber of the product. This phenomenon extends to the realm of stocks, and this is where the concept of Price-to-Earnings (P/E) ratio becomes pertinent. Stocks with low P/E ratios typically indicate a higher capacity for the growth of the associated company.
Expanding on the aforementioned notion, numerous industry experts propose that directing investments towards mid-cap stocks presents a relatively lower level of risk, owing to their comparably lower volatility in contrast to small-cap stocks. Additionally, these mid-cap stocks tend to generate superior returns due to their substantial growth potential within the market.
Hence, within this article focusing on the finest low P/E mid-cap stocks in India, we will delve into a selection of exemplary stocks falling under this specific category.
Factors considered for the selected Low PE Mid Cap Stocks
Considering the significant position held by the Low PE Mid Cap Stocks in India, it’s imperative to consider specific factors when contemplating potential investment options.
We have curated the following list of top Low PE Mid Cap Stocks in India based on the following factors:
1. Market Cap
We have chosen only those Low PE Mid Cap Stocks whose market cap is greater than 600 Crore INR.
2. Price to Earning Ratio
Typically, a stock’s price-to-earnings ratio tends to decrease as its performance improves.
3. Sales
We have selected the following Low PE Mid Cap Stocks with an Average Sales Growth (3 years) of more than 10%.
4.Profit
The following list consists of Low PE Mid Cap Stocks whose Average Profit growth (3 years) > 10%.
Top Low PE Mid Cap Stocks to buy in India
Andhra Paper Ltd
Engaged in the production and sale of paper, paper pulp, and paperboard, Andhra Paper is a significant player in the industry. The company’s notable attributes encompass a diversified product portfolio including writing & printing paper, copier paper, and specialty paper utilized in applications ranging from photos and batteries to cups and charts . Moreover, the company’s geographical distribution in FY22 reveals that 84% of its operations are rooted within India, with the remaining 16% constituting its export activities.
With manufacturing capabilities spanning two facilities in Andhra Pradesh’s Rajahmundry and Kadiyam, Andhra Paper boasts a collective paper manufacturing capacity of 807 tons per day. The company’s expansive warehouse capacity of 6500 tonnes is strategically spread across approximately 450 acres of land [3]. Additionally, in terms of management changes, the recent appointment of Mr. Mukesh Jain as Chief Financial Officer has led to his re-designation as Director – Commercial & Chief Financial Officer since May 5, 2022
- Market Cap – ₹ 1,639 Cr.
- Current Price – ₹ 412
- High / Low – ₹ 510 / 371
- Stock P/E – 2.89
- ROE – 40.0 %
The company maintains a nearly debt-free status and is trading at 1.04 times its book value, coupled with a favorable dividend yield of 3.03%. With anticipated positive quarterly performance, the company has achieved a commendable profit growth of 42.4% CAGR over the past five years, accompanied by a notable reduction in working capital requirements from 39.2 days to 16.6 days.
West Coast Paper Mills Ltd
West Coast Paper Mills Ltd stands as one of India’s oldest and largest producers of paper, serving the printing, writing, and packaging needs of numerous industries within the country. Established in 1955 and situated in Dandeli, Karnataka’s Uttara Kannada district, the mill’s globally recognized paper quality has significantly contributed to the progress of sectors such as printing, writing, publishing, stationery, notebooks, and packaging, thus contributing to national development.
The company’s focal points can be encapsulated as follows: In the fiscal year 2022, its revenue structure was divided into two main segments. The Paper and Paperboard Division, constituting 96% of the revenues, is responsible for crafting exceptional papers under the WESCO brand, encompassing premium printing products, office stationery, and other value-added items. The production reached 296,785 metric tons, operating at 93% capacity utilization . On the other hand, the Cables Division, comprising 4% of revenues, manufactures optical fiber cables from its Mysore-based facility, catering to India’s telecom sector. The annual production of optical fiber cables reached 63,630 kilometers in FY22 . Notably, the company has also ventured into new domains, such as micro cables, Ribbon & FTTH cables, and has secured orders for ribbon cables and FTTH from Indian Telcos, while simultaneously executing multitube cable orders for the European market.
- Market Cap – ₹ 3,438 Cr.
- Current Price – ₹ 520
- High / Low – ₹ 664 / 461
- Stock P/E – 3.40
- ROE – 44.8 %
The company has successfully diminished its debt and now maintains an almost debt-free status, accompanied by an impressive profit growth of 34.0% compound annual growth rate (CAGR) over the past five years. Demonstrating a commendable return on equity (ROE) performance, the company has achieved a 25.1% ROE over three years. Additionally, the company has efficiently decreased its working capital requirements from 35.8 days to 23.3 days.
EKI Energy Services Ltd
Established in 2011, EKI Energy Ltd specializes in carbon credit trading, carbon advisory services, and solutions pertaining to climate change and sustainability [1]. The following key details encapsulate the company’s operations:In terms of business scope, the company is engaged in climate change and sustainability advisory, carbon offsetting, and offers services like ISO certification, JIT/Kaizen management training, and electrical safety audits.
The company’s services encompass climate change advisory services, addressing validation, registration, monitoring, verification, issuance, and trading of eligible Carbon Credits Projects, alongside Business Excellence Advisory Services & Training Services including ISO standards implementation consultancy, Lean Manufacturing Advisory Services, and Electrical Safety Audits. Noteworthy developments in the fiscal year 2022 include the company’s listing of the first-ever plastic project from India with Verra, launching a Rs. 1000 crores climate impact fund, introducing India’s inaugural Climate EdTech and Climate Finance company, migrating to the BSE Main Board, issuing a bonus in a 3:1 ratio, expanding into Switzerland and Singapore, and initiating projects across diverse countries in FY23. Furthermore, EKI Energy introduced new product categories like Cookstove credits, Waste management credits, Plastic credits, EV credits, and Nature-based credits, leading to the acquisition of 15 major new clients
- Market Cap – ₹ 1,256 Cr.
- Current Price – ₹ 456
- High / Low – ₹ 2,100 / 355
- Stock P/E – 3.63
- ROE – 176 %
The company has successfully diminished its debt to nearly achieve a debt-free status and has showcased impressive profit growth of 358% compound annual growth rate (CAGR) over the past five years. Additionally, it holds a commendable track record of return on equity (ROE), with a three-year ROE standing at 171%. However, a downside is the increase in working capital days from 27.0 days to 69.6 days.
Brightcom Group Ltd
Established in 2010, Brightcom Group Ltd (formerly known as Lycos Internet Ltd) specializes in furnishing global businesses, agencies, and online publishers with comprehensive digital marketing solutions The company operates across three principal divisions: Ad-Tech and Digital Marketing: This sector encompasses an array of services such as Video Advertising, Display Ads Marketing, Performance-based Marketing, Search Marketing, Email Marketing and Lead Generation, Affiliate Marketing, Social Marketing, Mobile Marketing, Niche Campaigns, Digital Traffic Management, and Ad Serving.
It also provides Software Services: Brightcom Group provides customized technology platforms tailored to address specific requirements of clients, predominantly within the realm of digital media and related offerings. c. Future Technologies: This division focuses on the company’s innovative LIFE product, in addition to advancements in artificial intelligence, machine learning, and Digital Out of Home (DOOH) advertising .The company caters primarily to end-to-end advertisers, agencies, and publishers, including prominent entities such as Yahoo, Google, American Express, Unilever, Globalis, Sparcmedia, and Petco, among others.
- Market Cap – ₹ 4,994 Cr.
- Current Price – ₹ 24.8
- High / Low – ₹ 49.0 / 9.27
- Stock P/E – 3.64
- ROE – 22.3 %
The company maintains a nearly debt-free status and its stock is trading at 0.71 times its book value, with expectations of a promising quarter ahead. Furthermore, the company has achieved substantial profit growth of 27.5% compound annual growth rate (CAGR) over the past five years. However, a potential drawback is the relatively low promoter holding, which stands at 18.4%.
Seshasayee Paper & Boards Ltd
Engaged in the production and sale of printing and writing paper, Seshasayee Paper & Boards serves as the flagship entity within the SPB-ESVIN Group, headquartered in Chennai. With its inception dating back to 1960, the company possesses a remarkable six-decade track record within the Indian paper industry. A few notable aspects stand out:The company’s paper portfolio spans printing and writing grade papers, packing and wrapping grade papers, as well as specialty grade papers. In the domestic market, its paper products are synonymous with brands like Sprint, Sprint Plus, Swift, and Success, enjoying considerable recognition and popularity in the Southern Indian region .
Operating an integrated pulp, paper, and paperboard mill located in Pallipayam (Erode, Tamil Nadu) alongside a paper manufacturing mill in Tirunelveli, the company’s proactive expansion efforts have resulted in a cumulative capacity of 255,000 tonnes per annum (TPA) as of March 31, 2022, achieved through both organic growth and strategic acquisitions. Furthermore, backed by a robust marketing and distribution network, the company’s influence is notably strong in South India, fortified by a network of over 70 active dealers operating on a commission basis. Additionally, the company extends its reach internationally by exporting its paper products to destinations such as the United States of America, Sri Lanka, Nepal, and several Middle Eastern countries.
- Market Cap – ₹ 1,692 Cr.
- Current Price – ₹ 268
- High / Low – ₹ 349 / 220
- Stock P/E – 4.16
- ROE – 27.4 %
The company has significantly lowered its debt, achieving almost debt-free status, and its stock is trading at 1.03 times its book value, with expectations of a promising quarter ahead. Moreover, the company has showcased impressive profit growth of 27.0% compound annual growth rate (CAGR) over the past five years, accompanied by notable enhancements in debtor days, which have decreased from 27.4 to 16.7 days, and a substantial reduction in working capital requirements from 28.1 days to 13.6 days.
JK Paper Ltd
Established back in 1962, JK Paper has secured its position as a prominent player in the domains of Office papers, Coated papers, and Packaging boards, earning substantial respect within the paper industry today [1]. The following key details further illustrate the company’s profile: Noteworthy for its distribution network, J K Paper operates through a robust system encompassing over 450 trade partners and 4000 dealers, supported by 14 pan-India depots and 2 Quick Service centers, all contributing to efficient customer service and reduced turnaround times .
The company’s diverse product portfolio ranges from office paper, writing and printing paper, to packaging board and specialty paper, each marketed under distinctive brands such as JK Copier, JK Easy Copier, JK Sparke, JK Cedar, JK Max, and JK Excel Bond, among others. Holding a substantial 30% market share in the branded copier segment, the company operates integrated manufacturing facilities across three strategic locations—Rayagada (Odisha), Songadh (Gujarat), and Kagaznagar (Telangana), facilitating efficient logistics and swift delivery across India. Having expanded its capacity from 591,000 tonnes per annum (TPA) to 761,000 TPA, the company’s plants have demonstrated exceptional operational efficiency, achieving utilization levels of up to 103% of installed capacity in the fiscal year 2023.
- Market Cap – ₹ 5,637 Cr.
- Current Price – ₹ 333
- High / Low – ₹ 453 / 306
- Stock P/E – 4.45
- ROE – 33.4 %
Anticipated in the upcoming quarter is a robust performance from the company, buoyed by its consistent track record of impressive profit growth, which stands at a remarkable 36.4% compound annual growth rate (CAGR) over the past five years. Moreover, the company has consistently maintained a commendable dividend payout ratio of 18.9%, underscoring its commitment to providing healthy returns to its stakeholders.
GHCL Ltd
Founded in 1983, the company operates across the chemicals, yarn, and commodity product sectors, as detailed below: The company’s diverse business divisions include the Chemical Division, Yarn Division, Consumer Products Division, and Trading Division. Notable products span Soda Ash in Light and Dense variants, vital for glass production, detergents, paper, solar glass, and lithium-ion batteries, accompanied by Sodium Bicarbonate derived from Light Soda Ash with applications in food, poultry, and pharmaceuticals. Moreover, Yarn offerings encompass Open-end, Ring Spun Cotton, TFO, and Vortex Yarns, serving both apparel and home textile segments. The company’s Salts division presents variants under the i-FLO brand, featuring Triple Refined Iodized Salt, Iodized Crystal Salt, and Iodized Refined Salt.
The company’s manufacturing capabilities reflect its diverse product profile: its Soda Ash and Sodium Bicarbonate manufacturing facility is situated in Sutrapada, Gujarat, with an output of 1.2 million MTPA of Soda Ash and 0.12 million MTPA of Sodium Bicarbonate. The Yarn Division operates two units in Tamil Nadu, boasting 90% capacity utilization and producing 30,000 tons of yarn annually through 225,000 ring spindles, 3,320 rotors, 480 vortex positions, and 5,760 TFO spindles. Additionally, the Commodity Products segment’s salt refinery, located in Chennai, Tamil Nadu, has a production capacity of 0.1 million MTPA of edible salt.
- Market Cap – ₹ 5,055 Cr.
- Current Price – ₹ 529
- High / Low – ₹ 673 / 441
- Stock P/E – 4.84
- ROE – 31.5 %
The company has successfully decreased its debt, nearing a debt-free status, while also offering an attractive dividend yield of 3.31%. Its notable profit growth of 25.0% compound annual growth rate (CAGR) over the past five years is accompanied by a consistent healthy dividend payout of 17.6%. Moreover, the company has made significant improvements in debtor days, reducing them from 26.2 to 17.5 days. However, a downside emerges from its poor sales growth of 9.26% over the last five years, along with a relatively low promoter holding of 19.1%.
Gujarat Mineral Development Corporation Ltd
Gujarat Mineral Development Corporation is primarily engaged in two key sectors: mining and power generation . Its operations encompass various projects including Lignite, Bauxite, Fluorspar, Multi-Metal, Manganese, Power, Wind, and Solar. Within the Minerals & Metals realm, the company actively mines and extracts an array of resources such as lignite, bauxite, fluorspar, manganese, silica sand, limestone, bentonite, and ball clay from districts across Gujarat, including Kutch, Surat, Baroda, Rajkot, Jamnagar, Porbandar, Amreli, Bhavnagar, among others.
Notable business operations encompass: a. Lignite Operations: In the fiscal year 2022, the company operated five lignite mines in India, yielding around 8.6 million metric tons (MT) of lignite. Its current lignite production caters to 25% of Gujarat’s total demand, with plans to further capture 30-35% of this market by the fiscal year 2024-25. b. Power Projects: The company successfully managed its Akrimota Thermal Power Station, generating approximately 590 million units (MUs) with a Plant Load Factor of 27% in FY22, contributing to significant reduction of cash losses from the power project. c. Wind and Solar Power: Holding wind farm projects with a total capacity of 200.9 MW across diverse locations in Gujarat, along with a 5 MW Solar Power Project, the Wind Power plant achieved a 20% Plant Load Factor and generated around 326 MUs, while the Solar Power plant achieved a 16% Capacity Utilization Factor and generated approximately 7 MUs. d. Bauxite and Manganese: With bauxite mines in Kutch and Devbhumi, the company sold 150,000 MT of plant grade bauxite and around 250,000 MT of non-plant grade bauxite during FY22, along with 70,000 MT of Sub grade Manganese sales during the same period.
- Market Cap – ₹ 5,637 Cr.
- Current Price – ₹ 177
- High / Low – ₹ 188 / 123
- Stock P/E – 5.17
- ROE – 23.0 %
The company maintains a nearly debt-free status, with its stock trading at 0.97 times its book value and showcasing strong profit growth of 28.5% compound annual growth rate (CAGR) over the past five years. Additionally, notable improvements in debtor days from 29.1 to 19.7 days and a substantial reduction in working capital requirements from 198 days to 149 days underscore its efficient financial management. However, it’s important to note that the reported earnings encompass an additional income of Rs. 412 crore.
Varanium Cloud Ltd
Founded in December 2017, Varanium Cloud Limited is a technology-centric company specializing in diverse services, including digital audio, video content streaming, financial blockchain for PayFac-based streaming services, and more.Varanium Cloud operates across multiple business verticals. It offers digital audio and video content streaming services on a SaaS model to content owners and telecom operators internationally, encompassing Voice & Video over Internet Protocol solutions (VoIP) in both B2B and B2C segments. Additionally, the company provides online payment facilitation services (PayFac), extends low bandwidth digital educational content platforms through its EdTech brand “Edmission,” focusing on non-urban areas, and furnishes startups and SMEs with information technology-related services for their transition to digital platforms and infrastructure management under an IaaS model.
Within its product offerings, “Edmission” functions as a phy-gital (Physical and Digital) platform bridging educators and learners, supporting digital classes, video conferencing for up to 1 million students and 2,000 teachers simultaneously. “JumpTalk” delivers a cloud-based platform catering to video and audio conferencing, webinars, chats, and file transfers. Furthermore, Varanium Cloud’s Online Payment Facilitation Services, “Payfac,” offers aggregated payment gateway solutions to non-urban consumers, while Infrastructure as a Service (IaaS) entails services like Hydra Web Solutions, Corporate & Public WiFi Mesh Services, and eCommerce-as-a-Service (EaaS). Notably, the company’s geographical revenue mix reveals a shift with 13% domestic revenue in FY22 as compared to none in FY21, while exports accounted for 87% in FY22, down from 100% in FY21.
- Market Cap – ₹ 635 Cr.
- Current Price – ₹ 158
- High / Low – ₹ 401 / 30.5
- Stock P/E – 6.22
- ROE – 106 %
The company has successfully decreased its debt, achieving nearly debt-free status, while also maintaining a strong return on equity (ROE) track record with a three-year ROE of 104%. Furthermore, the company has made significant enhancements in debtor days, reducing them from 169 to 98.0 days. However, a notable drawback emerges from a decrease in promoter holding over the last quarter, experiencing a decline of -1.02%.
IIFL Securities Ltd
Incorporated in 1996 as part of the IIFL Group, IIFL Securities Limited was established as a broking arm and has since evolved into a comprehensive provider of financial services. It offers an array of retail and institutional services encompassing equities, financial product distribution, commodity and currency broking, investment banking, wealth management, and more to clients across India. The company’s profile can be further elucidated as follows:Diversifying its offerings, the company serves retail clients with a spectrum of services including equities, commodities, and currency broking, financial planning, depository participant services, mutual fund and bond distribution, portfolio management, alternative investment funds, retirement and estate planning.
Additionally, the company caters to institutional clients with broking services, corporate access, and research support, while its investment banking arm handles various financial activities such as IPOs, Qualified Institutional Placements, mergers and acquisitions, advisory services, and more. The company’s revenue split is primarily divided into Capital Market Activity, Insurance Broking, and Facilities & Ancillary services, accounting for 81%, 4%, and 15% respectively in FY22.Operating with a widespread presence, IIFL Securities has garnered over 3.5 lakh active clients, serving more than 2.4 million customers through an expansive network of around 2,500 points of contact, which includes branches and business partners. This extensive reach spans across 500 cities in India, highlighting the company’s comprehensive nationwide presence.
- Market Cap – ₹ 2,010 Cr.
- Current Price – ₹ 65.8
- High / Low – ₹ 79.6 / 48.2
- Stock P/E – 7.15
- ROE – 19.7 %
The stock presents a favourable dividend yield of 4.56%, complemented by the company’s consistent practice of sustaining a robust dividend payout at 26.7%. However, the downsides encompass a relatively low promoter holding of 31.1% and contingent liabilities amounting to Rs. 845 crore.
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List of Top Low PE Mid Cap Stocks to buy in India
|
Rank |
Brand Name |
Market Cap(in INR rupees) |
Price to Earning Ratio |
|
1 |
Andhra Paper Ltd |
₹ 1,639 Cr. |
2.89 |
|
2 |
West Coast Paper Mills Ltd |
₹ 3,438 Cr. |
3.40 |
|
3 |
EKI Energy Services Ltd |
₹ 1,256 Cr. |
3.63 |
|
4 |
Brightcom Group Ltd |
₹ 4,994 Cr. |
3.64 |
|
5 |
Seshasayee Paper & Boards Ltd |
₹ 1,692 Cr. |
4.16 |
|
6 |
JK Paper Ltd |
₹ 5,637 Cr. |
4.45 |
|
7 |
GHCL Ltd |
₹ 5,055 Cr. |
4.84 |
|
8 |
Gujarat Mineral Development Corporation Ltd |
₹ 5,637 Cr. |
5.17 |
|
9 |
Varanium Cloud Ltd |
₹ 635 Cr. |
6.22 |
|
10 |
IIFL Securities Ltd |
₹ 2,010 Cr. |
7.15 |
Conclusion
Within this piece highlighting the top-performing low Price-to-Earnings (P/E) Mid Cap Stocks in India, we have deliberated on prime selections spanning diverse sectors. Our emphasis has been on utilizing the stock P/E ratio as a tool for gauging proper valuation.
Nonetheless, it’s important to acknowledge that stock P/E isn’t the sole gauge for comprehending stock performance; encompassing diverse ratios like leverage and growth is equally essential for a comprehensive assessment. Feel free to share your favored mid-cap stock choice in the comments below and enjoy your reading journey!
What did we learn?
