Initiating your market journey doesn’t necessitate a substantial financial outlay. We have meticulously selected stocks with prices below Rs. 50 per share, boasting robust company potential and promising growth prospects. This proves advantageous for individuals adhering to tighter financial constraints. The selection of these stocks was meticulously carried out, considering a gamut of factors, encompassing news, speculations, price chart trends, as well as fundamental characteristics like debt-to-equity ratio and cashflows.
Stocks priced under Rs. 50, 20, and 10 are categorised as penny stocks, holding potential allure for investors operating within constrained budgets. This article delves into 50 stocks under Rs. 50, evaluating them across diverse parameters to identify the cream of the crop. Our evaluation is grounded in factors such as 5-year net profit margin, 5-year return on equity, robust fundamental attributes, high activity levels, absence of debt, and substantial dividend payouts.
Within this blog post, we’ll delve into an analysis of the most encouraging Stocks to buy Under Rs 50 in India, offering valuable insights for potential investment deliberations.
Factors considered for the selected Stocks to Buy Under Rs 50
Considering the significant position held by the Stocks to buy Under Rs 50 in India, it’s imperative to consider specific factors when contemplating potential investment options.
We have curated the following list of Stocks to buy Under Rs 50 in India based on the following factors:
1. Market Cap
We have chosen only those Stocks to buy Under Rs 50 whose market cap is greater than 100 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 Stocks to buy Under Rs 50 with an Average Sales Growth (3 years) of more than 10%.
4.Profit
The following list consists of Stocks to buy Under Rs 50 whose Average Profit growth (3 years) > 10%.
Top Stocks to buy Under Rs 50 to buy in India
Vishal Fabrics Ltd
Vishal Fabrics Ltd (VFL) is a prominent player in the textile industry, engaged in the manufacturing and sales of various textile products, including dyed yarn, denim fabrics, and textile items produced through job work. The company’s operational framework involves the procurement of raw gray fabric, which is subsequently transformed through processes like dyeing, printing, and finishing, tailored to meet the specific requirements of clients. This comprehensive approach spans a wide array of fabric types, encompassing 100% cotton, cotton spandex, cotton-poly blends, and other variations.
VFL’s operational landscape has witnessed a significant geographical evolution. In FY18, the company’s operations were exclusively concentrated within the domestic market. However, by FY21, there was a subtle shift, with the domestic market accounting for 98% of its activities, and a new foray into the international market contributing to the remaining 2%. The company’s manufacturing prowess is anchored by a robust processing unit in Narol, Ahmedabad, Gujarat, boasting an annual capacity of 1200 lakh meters. Furthermore, VFL operates a dedicated denim processing facility in Dholi, Gujarat, capable of handling 800 lakh meters annually to cater specifically to the demands of its denim processing segment.
- Market Cap – ₹ 321 Cr.
- Current Price – ₹ 16.2
- High / Low – ₹ 29.9 / 15.7
- Stock P/E – 8.88
- ROE – 14.6 %
The stock is currently valued at 0.82 times its book value, while the company has exhibited strong profit expansion with a 27.7% compound annual growth rate (CAGR) over the past five years. However, it’s worth noting that the company has recorded sluggish sales growth of only 11.7% during the same five-year period.
GP Petroleums Ltd
Established in 1983, GP Petroleums Ltd. (GPPL) has solidified its presence as a pivotal player in the Manufacturing & Marketing sector. With a primary focus on Industrial and Automotive Lubricants, along with Rubber Process Oils, the company has also extended its reach to the Trading arena, involving Base Oil and Fuel Oil. A part of the Gulf Petrochem FZC Group, steered by the Goel family, GPPL’s affiliation with the larger corporate conglomerate is notable. This conglomerate’s central entity, Gulf Petrochem FZC (GPF), operates as an influential oil trading and ship fuel supply hub situated in the United Arab Emirates. The breadth of GPPL’s product portfolio is extensive, encompassing Automotive Lubricants spanning Engine Oils and Brake Fluids, and Industrial Lubricants & Specialties comprising Metal Working Fluids, alongside Process Oils & Specialties, encapsulating products like Rubber Process Oils and Transformer Oils.
With the renowned IPOL brand entrenched in the Indian market, GPPL’s exclusivity in distributing REPSOL automotive lubricants, a prominent offering from the esteemed Spanish oil major Repsol S.A, adds to its prominence. A significant milestone was reached in 2020 as GPPL embarked on a collaboration with Repsol and Honda Motors and Scooters India Ltd., venturing into the production and marketing of Repsol-Honda Co-branded Lubricants, thus serving a diverse vehicular landscape encompassing 2-wheelers, cars, commercial, and off-highway vehicles. The company’s operational structure is characterized by two principal segments: Manufacturing, dedicated to crafting and promoting Lubricating Oils and Greases, and Trading, a domain spanning activities related to Base Oil, Coal, Fuel Oil, and Bitumen.
- Market Cap – ₹ 219 Cr.
- Current Price – ₹ 43.0
- High / Low – ₹ 67.2 / 30.9
- Stock P/E – 11.9
- ROE – 9.55 %
Trading at 0.79 times its book value, the stock shows potential value, yet concerns emerge as the company, despite consistent profitability, refrains from issuing dividends; furthermore, a relatively modest 8.44% return on equity over the past three years and a notable 9.74% decrease in promoter holding raise questions about its reinvestment strategy, financial performance, and management’s confidence in the company’s future.
Facor Alloys Ltd
The company’s core focus lies in the Ferro Alloys sector, specifically in the production of ferrochrome, a crucial component for Stainless Steel manufacturing. With an annual production capacity of 72,500 metric tons of ferro alloys, the manufacturing facility is strategically located in Garividi, within the Vizianagaram district of Andhra Pradesh. Notably, the company’s revenue distribution in FY21 was evenly split: 50% from operations within India and 50% from international markets. Major clients including Tata Steel, Abhijeet Ferrotech Ltd., and Mortex India Ltd. were pivotal contributors, jointly accounting for 97.30% of the revenue during the same fiscal year.
Significantly, the company also achieved a noteworthy milestone through a one-time settlement with Bank of India, Visakhapatnam, a prominent lender. This settlement effectively resolved the company’s total outstanding dues amounting to Rs. 27.05 crores as of March 31, 2019. The dues were connected to the devolvement of a Standby Letter of Credit (SBLC), which had been issued as collateral security in support of borrowings of USD 10.00 Million extended to Facor Minerals (Netherlands) B.V., Netherlands. This subsidiary, positioned as a step-down first level subsidiary, was associated with the company’s broader financial and operational strategies.
- Market Cap – ₹ 135 Cr.
- Current Price – ₹ 6.90
- High / Low – ₹ 10.9 / 6.00
- Stock P/E – 13.7
- ROE – 5.46 %
The company has successfully decreased its debt, nearing a debt-free status, and the stock is currently valued at 0.71 times its book value. However, amidst consistent profitability, the company refrains from distributing dividends, and its sales growth over the past five years has been lackluster at 0.60%. Additionally, a notably low tax rate is evident, and the company’s return on equity for the last three years stands at a modest 4.51%. It’s noteworthy that the earnings include an additional income of Rs. 2.26 Crores.
Mirza International Ltd
Established in 1979, Mirza International Ltd has evolved into a distinguished player in the realm of manufacturing, export, and trading within the realm of finished leather, footwear, and allied products. The company’s multifaceted operations encompass a trio of business divisions. The Tannery Division, for instance, is dedicated to the intricate process of producing finished leather from raw hides, wet blue, and crust, showcasing the company’s expertise in leather craftsmanship. Meanwhile, the Shoe Division stands as a testament to the company’s capabilities in creating high-quality finished leather shoes, catering to an array of style preferences and consumer needs. The Garments/Accessories Division completes this diversified portfolio, engaging primarily in the trading of garments and accessories, further extending Mirza International’s reach within the fashion and lifestyle domain.
Central to the company’s success is its portfolio of esteemed brands, a roster that includes notable names like Red Tape, Red Tape Athleisure, Bond Street, MODE, Oaktra, and Yezdi, among others. Bolstering these accomplishments is Mirza International’s formidable manufacturing capacity, underpinned by six integrated facilities. These facilities collectively contribute to an impressive monthly production of approximately 3 million square feet of leather, a tangible testament to the company’s commitment to quality and scale. Furthermore, with an annual footwear manufacturing capacity of around 6.4 million pairs, Mirza International is well-equipped to address the demand for its footwear offerings. It’s worth noting that in the fiscal year 2022, the company effectively utilized its manufacturing capabilities, with a capacity utilization rate standing at approximately 65.85%, affirming its operational efficiency and adaptability.
- Market Cap – ₹ 644 Cr.
- Current Price – ₹ 46.6
- High / Low – ₹ 74.0 / 28.5
- Stock P/E – 15.0
- ROE – 4.33 %
The company has successfully lowered its debt levels, positioning itself as nearly debt-free, while also significantly improving its working capital efficiency, reducing requirements from 90.6 days to 37.2 days. However, despite consistent profitability, the company refrains from distributing dividends, and its sales growth over the past five years has been negative at -8.39%. Additionally, the company’s return on equity for the last three years remains relatively low at 7.45%.
Shyam Century Ferrous Ltd
Established in 2011, Shyam Century Ferrous Limited specializes in the manufacturing of Ferro Alloys, particularly Ferro Silicon, operating primarily within the North-Eastern region of India. The company’s inception was marked by a demerger scheme from Star Ferro and Cement Limited in 2014. Its promotion is attributed to the stewardship of Mr. Sajjan Bhajanka and Mr. Sanjay Agarwal, who also hold significant roles as promoters of Century Plyboards Ltd. and Star Cement Ltd. The company’s strategic positioning within the North-Eastern region affords it access to a plethora of vital raw materials such as Coal, Lam Coke, and Quartz, bolstering its competitiveness through proximity to essential resources.
With an exclusive focus on the Ferro Alloys sector, Shyam Century Ferrous Limited plays a pivotal role in producing essential alloys like Chromium, Manganese, and Silicon, integral to steel manufacturing as additives that enhance the strength and quality characteristics of various steel grades. The company’s product lineup prominently features Ferro Silicon, a vital component in the production of stainless steel, serving as a grain refiner to enhance brightness. In addition to Ferro Silicon, the company’s capabilities extend to the production of other Ferro-alloys like Silico-Manganese, diversifying its offerings to cater to diverse industry demands. Notably, in FY21, the company achieved the successful sale of 14,777 metric tonnes of Ferro Silicon.
- Market Cap – ₹ 397 Cr.
- Current Price – ₹ 18.7
- High / Low – ₹ 27.2 / 15.3
- Stock P/E – 18.3
- ROE – 15.9 %
The company maintains a nearly debt-free status while also achieving commendable profit growth at a 20.6% compound annual growth rate (CAGR) over the past five years. Notably, improvements are evident in debtor days, which have decreased from 59.8 to 31.6 days, and in working capital requirements, which have been reduced from 106 days to 72.8 days.
Sarla Performance Fibers Ltd
Established in 1993, Sarla Performance Fibers specializes in the production of specialized high tenacity yarns that find essential application in the manufacturing of innerwear, narrow fabrics, hosiery, sportswear, and more. Operating with a distinct manufacturing presence, the company boasts two yarn manufacturing units, a dyeing unit, and a high tenacity twisting unit, all strategically located in India. This integrated approach not only covers the complete spectrum from spinning to cutting-edge technology for the production of high bulk, high stretch polyester and nylon yarns but also incorporates in-house bonding and kingspool winding techniques, facilitating the creation of an impressive portfolio encompassing more than 250 distinct value-added yarn variations. Noteworthy expansion efforts include the increase in high tenacity twisting capacity in Dadra during FY2020, augmenting production by an additional 3600 tonnes/year with an investment of 18.5 Crores, indicative of the company’s commitment to growth.
However, amid these successes, the company’s overseas endeavors present challenges. Although Sarla Performance Fibers possesses a Partially Oriented Yarn (POY) manufacturing unit in the USA through its subsidiary, this unit has been non-operational since December 2017, resulting in significant accumulated losses amounting to 92.97 Crores as of March 31, 2020, underscoring the complexities encountered in managing international operations.
- Market Cap – ₹ 397 Cr.
- Current Price – ₹ 47.5
- High / Low – ₹ 60.0 / 32.4
- Stock P/E – 22.1
- ROE – 5.42 %
The stock is currently valued at 1.00 times its book value, and there has been a notable enhancement in debtor days, decreasing from 91.6 to 57.2 days. However, despite this, concerns arise as the company has recorded sluggish sales growth at 4.96% over the last five years. Furthermore, its return on equity for the past three years remains modest at 8.63%, and the earnings encompass additional income amounting to Rs. 16.6 Crores. Additionally, the company’s dividend payout has remained relatively low, constituting only 11.8% of profits over the last three years.
Filatex India Ltd
Filatex India Ltd. specializes in the manufacturing and trading of synthetic yarn and textiles, encompassing a diverse product range that includes Polyester Chips, Drawn Textured Yarns, Partially Oriented Yarns, Fully Drawn Yarns, Air Textured Yarns, Polypropylene Multifilament Crimp Yarns, and Narrow Woven Fabrics. Its operational landscape is marked by a significant domestic presence, with 91% of its activities concentrated within India during FY22, while 9% extended beyond national borders. Serving as a testament to its global reach, the company caters to prominent domestic markets including Surat, Mumbai, Ahmedabad, Ludhiana, Panipat, and Bhilwara, while also exporting its offerings to a remarkable span of over 45 countries spanning five continents.
Notably, the company’s value-added product portfolio, categorized into Comfort, Touch, Fancy Effect, and Others, has played a pivotal role in driving margin improvement, primarily attributed to the strategic emphasis on value-added Drawn Textured Yarn (DTY) products. Comprising a robust manufacturing infrastructure, the company operates across facilities in Dadra and Dahej, boasting a versatile installed capacity encompassing 51,800 MTPA for polyester chips, 55,800 MTPA for Partially Oriented Yarn (POY), 1,25,800 MTPA for Fully Drawn Yarn (FDY), 1,42,800 MTPA for DTY, and 2,400 MTPA for grey fabric, as of March 31, 2022. Continuously enhancing its capabilities, the company has recently initiated debottlenecking measures to augment melt capacity and manufacturing lines at its Dahej Plant, and concurrently achieved a significant milestone by successfully commissioning a pilot plant for recycling polyester waste at its Dahej unit in July 2022.
- Market Cap – ₹ 1,787 Cr.
- Current Price – ₹ 40.2
- High / Low – ₹ 59.2 / 30.2
- Stock P/E – 27.9
- ROE – 8.23 %
The company’s cost of borrowing appears to be relatively elevated, suggesting that the expenses associated with obtaining external funds for various financial needs could be substantial. This could encompass expenses related to interest payments on loans, issuance of bonds, or other forms of debt financing. A high cost of borrowing might stem from factors such as the company’s creditworthiness, prevailing market interest rates, and overall economic conditions. This situation could potentially impact the company’s overall financial health and profitability, as higher borrowing costs can lead to increased financial obligations, reduced net income, and potentially limit the company’s ability to allocate resources for other strategic initiatives.
Compucom Software Ltd
Compucom Software Ltd encompasses a diversified scope of operations that spans E-Governance projects, ICT Education Projects, software design and development, electronic media, IT and media training and learning solutions, as well as Wind Power generation.[1] Their service portfolio includes a range of offerings such as Learning Management Systems (LMS), Satellite Education, Software Services, E-Governance solutions, ICT in Education services, and Wind Power solutions.
Notably, the company’s revenue mix reveals a dynamic landscape with Software contributing 30% in FY22 compared to 36% in FY21, Learning services accounting for 63% in FY22 compared to 53% in FY21, and Wind Power representing 7% in FY22 in contrast to 11% in FY21.[2] With a geographical focus predominantly on India, which constitutes 98% of their operations, the company’s presence extends to the USA with a 2% share.[2] Compucom Software Ltd has also ventured into the domain of Wind Power Generation, establishing several wind power plants with capacities of 0.6 MW and 0.8 MW in various locations, including Jaisalmer, Sikar, and Krishna. To effectively manage these endeavors, the operation and maintenance of their wind power projects have been entrusted to Wind World India Ltd.
- Market Cap – ₹ 163 Cr.
- Current Price – ₹ 20.6
- High / Low – ₹ 28.0 / 14.6
- Stock P/E – 37.7
- ROE – 3.17 %
The company has significantly lowered its debt, positioning itself as nearly debt-free, and its stock is currently valued at 1.17 times its book value. Additionally, a promising quarter is anticipated, accompanied by a commendable dividend payout of 69.9%. However, it’s noteworthy that the company’s return on equity for the past three years remains modest at 4.71%, and the earnings incorporate an additional income of Rs. 3.77 Crores. A concern arises from the relatively high debtor days, spanning 200 days, which could impact the company’s cash flow and operational efficiency.
S.A.L Steel Ltd
S.A.L Steel Ltd is a prominent player in the manufacturing sector, specializing in the production of Sponge Iron and Ferro Alloy, essential components that contribute to the iron and steel industry’s functioning. The company’s operational scope extends beyond these core products, encompassing a power generation capacity of 40 MW, which further bolsters its market presence.Diversifying its offerings, the company’s product lineup includes Direct Reduced Iron (DRI/Sponge Iron), Ferro Alloys, Iron Ore pellets, and a range of finished steel products, reflecting its versatility and integration across various aspects of the industry.
Geographically, the company’s performance dynamics underwent a shift in FY21, with more than 99% of its operations being conducted within India, marking a notable increase from the 94% share in the previous fiscal year. Highlighting a key operational linkage, the company engages with its promoter group, Shah Alloys Ltd, through the provision of finished products that serve as raw materials for Shah Alloys Ltd. Moreover, the company taps into synergies by selling excess power generated from its 40 MW power plant to Shah Alloys Ltd, fostering an interwoven network of operational collaboration.
- Market Cap – ₹ 144 Cr.
- Current Price – ₹ 17.0
- High / Low – ₹ 23.3 / 7.56
- Stock P/E – 41.3
- ROE – 8.92 %
The company showcases a strong historical track record in terms of return on equity (ROE), with a notable 3-year ROE of 28.9%, accompanied by an improved debtor days figure, which decreased from 64.6 to 50.0 days. However, certain concerns emerge, including the fact that the stock is trading at a high valuation of 3.48 times its book value. Despite consistent profit reporting, the absence of dividend payouts persists, coupled with a lower interest coverage ratio, indicating a potentially challenging financial situation. Additionally, the company’s sales growth has been lackluster at 2.72% over the last five years, and contingent liabilities amount to Rs. 68.4 Crores. There’s also the possibility that the company is capitalizing interest costs, while the significant pledge of 75.0% of the promoters’ holding raises governance apprehensions.
Trident Ltd
Established in 1990, Trident Ltd is engaged in the multifaceted domain of manufacturing, trading, and sales encompassing Yarn, Terry Towels & Bed sheets, and Paper & Chemicals. Their comprehensive product portfolio spans diverse categories, with offerings like 100% cotton combed yarn, Slub yarn, Open-End yarn, and Blended yarn under the Yarn segment, while the Home Textiles category includes an array of Bath and Bed linen products such as Comforters, Solid Printed Sheets, and Decorative pillows. Additionally, the company operates in the Paper sector, producing items like Branded copiers, Maplitho paper, Bible, and offset printing paper. Notably, Trident Ltd is also a significant player in the chemical industry, being North India’s largest commercial and battery-grade sulphuric acid manufacturer.
Supported by three manufacturing facilities situated in Punjab and Madhya Pradesh, the company has established a robust operational foundation. These facilities collectively house 589,248 spindles, 7,464 rotors, 320 Air Jet, 672 looms (terry towel), and 500 looms (bed sheet) in FY22. With a paper manufacturing capacity of 1.75 Lac MTPA and a chemical manufacturing capacity for sulphuric acid reaching 113,150 MTPA, the company also integrates captive power plants with an installed capacity of 49.4MW, fulfilling around 40% of their total power requirements. Notably, the capacity utilization in FY23Q4 reveals a utilization of approximately 68% for Yarn, 48% for Terry Towels, 81% for Bed sheets, and 80% for Paper, indicating the operational efficiency of Trident Ltd’s various segments.
- Market Cap – ₹ 16,766 Cr.
- Current Price – ₹ 32.9
- High / Low – ₹ 41.9 / 25.0
- Stock P/E – 41.5
- ROE 0 11.0 %
The company has consistently maintained a robust dividend payout of 41.3%, coupled with notable improvements in debtor days which decreased from 26.5 to 15.9 days, and a reduction in working capital requirements from 72.6 days to 45.7 days. Nonetheless, concerns arise as the stock trades at a substantial 4.00 times its book value, coupled with a lacklustre sales growth of 6.79% over the past five years, and there’s a possibility that the company is capitalizing the interest cost.
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List of Top Stocks to buy Under Rs 50 to buy in India
|
Rank |
Brand Name |
Market Cap (in INR rupees) |
Price to Earning Ratio |
|
1 |
Vishal Fabrics Ltd |
₹ 321 Cr. |
8.88 |
|
2 |
GP Petroleums Ltd |
₹ 219 Cr. |
11.9 |
|
3 |
Facor Alloys Ltd |
₹ 135 Cr. |
13.7 |
|
4 |
Mirza International Ltd |
₹ 644 Cr. |
15.0 |
|
5 |
Shyam Century Ferrous Ltd |
₹ 397 Cr. |
18.3 |
|
6 |
Sarla Performance Fibers Ltd |
₹ 397 Cr. |
22.1 |
|
7 |
Filatex India Ltd |
₹ 1,787 Cr. |
27.9 |
|
8 |
Compucom Software Ltd |
₹ 163 Cr. |
37.7 |
|
9 |
S.A.L Steel Ltd |
₹ 144 Cr. |
41.3 |
|
10 |
Trident Ltd |
₹ 16,766 Cr. |
41.5 |
Conclusion
In summation, the realm of stocks priced below Rs. 50 extends a diverse spectrum of compelling investment prospects, accessible to individuals with modest financial resources. This implies that initiating investments with as little as Rs. 50 is feasible. Nonetheless, it is pivotal to underscore that engaging in stock investment necessitates comprehensive research and deliberation, encompassing factors such as financial constraints, investment strategy, risk tolerance, and more. The article delved into a selection of India’s finest stocks under Rs. 50, representing varying sizes and industries, some of which have yielded impressive returns to shareholders in recent times.
While certain fledgling trading strategies advocate for selecting stocks trading at rounded-off numbers, these approaches prove ineffective despite their simplicity. It is imperative to resist relying solely on stock price when making investment decisions. Instead, the emphasis should be placed on thorough analysis, considering multiple dimensions that shape a stock’s potential for growth and sustainability in the dynamic market landscape.
What did we learn?
