Pune Wealth Management：List of Undervalued Stocks to Buy Under Rs. 50

In this guide, we will look into undervalued stocks under Rs. 50 that promise potential returns without a large investment. Despite their risks, these stocks can provide opportunities for smart investors to capitalise. Join us as we discover low-cost investments with high potential rewards.

Stocks under Rs. 50 are shares priced below 50 Indian Rupees. These low-priced or penny stocks often belong to smaller companies. They carry higher risks due to low liquidity and other factors. As an investor, you might find these stocks attractive due to their low cost and potential for high returns. However, they are more volatile and less established, making them riskier and requiring careful consideration.

Here are some undervalued stocks under Rs. 50 in India:

Market Cap (in Rs. Crore)

South Indian Bank Ltd.

Trident Ltd.

19,304

Essar Shipping Ltd.

Century Extrusions Ltd.

Yes Bank Ltd.

75,018

Easy Trip Planners Ltd.

Brightcom Group Ltd.

Gothi Plascon (India) Ltd.

Bervin Investment and Leasing Ltd.

Swarna Securities Ltd.Pune Wealth Management

SC Agrotech Ltd.

Welcure Drugs and Pharmaceuticals Ltd.

NCC Blue Water Products Ltd.

Sobhaygya Mercantile Ltd.

Disclaimer: Please note that the market cap and other data (below-mentioned) are updated as of 9th August 2024. Research thoroughly before investing, considering factors like market cap, debt-to-equity ratio, and past performance to make informed decisions.

With the introduction of the top stocks under Rs. 50 out of the way, let us take a look at the stocks listed above in more detail:

Set up in 1929, South Indian Bank provides a wide array of banking services to people in India. This includes corporate and retail banking and para-banking options like mobile, internet, debit card, foreign exchange, and merchant banking.

The current market cap of the bank is Rs. 6,538 crore, with the stock price’s 3-year CAGR at 41%. In addition, the business’s compounded profit growth over the last 3 years has been an impressive 159%. With these metrics and more, the South Indian Bank has consistently outperformed some of the top banks in India.

Trident’s operations are diversified, including the textile, paper, and yarn sectors. Owing to its market presence and diverse product line, it can be a reliable investment in the market. The firm’s current market cap is Rs. 19,304 crore, and the stock also has an impressive 5-year CAGR of 46%. By June 2024, the company also had a high level of promoter holdings at 73.19%.

This entity was established in 2010 and works in the domain of chartering services and fleet operations in coastal and international voyages.

The company has a current market cap of Rs. 981 crore, with the previous 1-year stock price CAGR at 302%.

Incorporated in 1988, Century Extrusions produces power transmissions, aluminium extruded products, and distribution lines. The company’s current market cap is Rs. 207 crore, and its share price CAGR in the last 5 years is 56%.

This entity is a commercial bank in India, serving a broad range of clients. It has a strong focus on technology-driven services and digital offerings. Its current market cap is Rs. 75,018 crore, and the stock’s 1-year CAGR is 40%.

This is an online travel agency based in India. It has a broad range of products and services, which include holiday packages, hotels, and airline tickets. Its current market cap is Rs. 7000 crore, and the business is impressively close to being debt-free. Besides these, the company’s revenue and market share have been steadily climbing, and the stock has a robust 3-year ROE of 40%, which is a good sign for investors.

This business has a global presence, with its digital marketing solutions including software services, ad-tech, and future technologies. It currently has a market cap of Rs. 1384 crore with a 3-year compounded sales growth of 40%.

Headquartered in Puducherry, Gothi Plascon has been operating in the property and real estate domain since 1994. The firm’s current market cap is Rs. 40.6 crore, with a 5-year stock price CAGR of 43%. It also has a strong ROE, making it an attractive option for investors.

This is an Indian NBFC (non-banking financial institution) primarily concerned with leasing and investment activities. Presently, the company has a market cap of Rs. 25.2 crore, with its previous 1-year ROE at 30%.

This company is focused on receiving rental income and the collection of outstanding dues. Its market cap is Rs. 13.4 crore, and the company has shown more robust growth than the industry average in the last 5 years. In addition, its 3-year stock price CAGR is 42%.

Set up in 1992, SC Agrotech was initially called Sheel International. While it began as a dairy product manufacturer, it has broadened its focus to include agriculture, biotechnology, and horticulture. Its current market cap is Rs. 11.8 crore, with a strong compounded profit growth over the last 3 years of 82%.

This firm primarily manufactures and markets pharmaceutical formulations. This includes capsules, tablets, antibiotics, dry syrups, vitamins, sulpha drugs, antipyretics, analgesics, and corticosteroids. This share under Rs. 50 has a market cap of Rs. 9.90 crore with a robust one-year stock price CAGR of 109%.

Established in 1992, NCC Blue is a company in the aquaculture sector. It primarily deals with the processes of breeding and processing seafood. It also markets these products. Its current market cap is Rs. 8.03 crore, with a one-year stock price CAGR of 75%.

This is also an Indian NBFC, with the business also engaged in a few other financial services. Its market cap at present is Rs. 40.6 crore, and it has a strong 3-year ROE of 37%. The firm has also been actively working to gradually increase its net profits, becoming an attractive pick for investors.

Check out stocks from other sectors!

Recommended stocks under Rs. 20 to buy in India

Leading semiconductor stocks to watch in India

Essential cybersecurity stocks in India

Promising defence stocks to invest in

Key EV (electric vehicle) stocks to buy

Noteworthy ethanol stocks for your portfolio

High-potential sugar stocks to consider

Innovative green hydrogen stocks shaping the future

If you are looking to invest in stocks under Rs. 50, the first step would be to conduct thorough research that focuses on the targeted stock and its competitors in a similar price range. For this, leverage financial websites and stock screeners. Another prerequisite will be to have a Demat account with a broker that enables you to trade in penny stocks. Finally, once you know which stocks you want to buy, you can add funds to your account and enter the market. Once you have invested, it is also important to continuously track your position, market sentiments, and company fundamentals to maximise profits.

Here is what you need to consider to identify undervalued stocks under Rs. 50

Despite their low prices, these stocks can make substantial profits if selected carefully. Look for stocks with pricing that indicate possible undervaluation or overlooked market opportunities.

Stocks with a higher market capitalisation are often more established and attract more investor interest, resulting in improved market liquidity.

Look for stocks with low debt-to-equity ratios since they may provide more stability and durability, especially during economic downturns.

Identifying a company's competitive edge is critical for establishing its long-term sustainability and growth potentialLucknow Stock. Look for stocks with unique value propositions, significant brand presence, and innovative goods or services that differentiate them from the competition.

Assessing a stock's previous performance might reveal vital information about its potential growth. Look for firms that have a proven track record of earnings growth, good cash flow, and shareholder returns. While previous performance is not a predictor of future outcomes, it may assist in guiding investing decisions.

Look for stocks with a history of paying dividends to shareholders. Dividend yield is the percentage of dividends paid compared to the stock price and can be a significant consideration for income-oriented investors.

Analyse the industry in which the firm works to better understand its growth opportunities and challenges. Investing in companies from rising industries with promising long-term prospects can improve the chance of favourable returns.

Research the company's leadership team, including their expertise and track record of business management. Competent and experienced management teams are more likely to make strategic decisions that create long-term value for shareholders.

Let us elaborate on the three main parameters to consider.

When analysing stocks under Rs. 50, the market price is critical for evaluating their appeal to investors. The market price is the current price of a share on the stock market. It varies depending on demand and supply dynamics, as well as investor forecasts of the company's prospects.

For stocks under Rs. 50, a low market price does not always imply bad performance. Instead, it might indicate undervaluation or market neglect. Investors frequently view these low-cost shares, sometimes known as penny stocks, as prospects for future gain. However, it is critical to do research before investing, as these companies can be volatile and have higher risks.

By monitoring the market price of shares under Rs. 50, investors can uncover chances for value appreciation and capital growth. While affordability is important to many investors, it is also important to consider the company's underlying fundamentals and growth prospects.

Market capitalisation is another important factor to consider when analysing stocks under Rs. 50. It indicates a company's entire stock market value, which is computed by multiplying the current share price by the total number of shares outstanding.

The market capitalisation of stocks under Rs. 50 might range from small-cap to large-cap companies. A higher market capitalisation suggests that the firm is well-established and extensively known in the market. It also signals more liquidity, which might attract more investors and provide more opportunities for growth and expansion.

Investors should consider market capitalisation while investing in equities under Rs. 50 since it gives information about the company's size and reputation. While higher market capitalisation may indicate stability and development potential, it is critical to evaluate other criteria, such as debt levels and industry trends, before making investment decisions.

The debt-to-equity ratio is an important measure of a company's financial health and risk profile. It compares a firm's total debt to its shareholders' equity, indicating how much debt the company uses to fund its operations and expansion.

For equities under Rs. 50, a low debt-to-equity ratio is especially essential since it indicates financial stability and careful financial management. A smaller ratio shows the firm has less debt than equity, lowering its financial risk and exposure to economic downturns.

When looking at stocks under Rs. 50, investors should carefully assess the debt-to-equity ratio. While larger levels of debt may signal greater risk, a low ratio indicates that the organisation is better prepared to weather financial setbacks and seek development prospects.

There are several benefits to investing in stocks under Rs. 50. Some of these are:

Compared to large-cap stocks, stocks under Rs. 50 have a significant growth potential. There can be several reasons for this; a prominent reason is that these companies are mostly in the nascent stage, with a large growth potential.

Investing in stocks at different price levels is a good method of portfolio diversification and goes a long way in enhancing potential returns and minimising risk.

There can also be several tax benefits of investing in these small stocks as the short-term capital gains taxes are lower (recently changed to 20% from erstwhile 15%).

Despite numerous benefits and advantages, investing in stocks under Rs. 50 does come with its own set of risks. These are:

Stocks under Rs. 50 often face high volatility and price fluctuations, which only certain investors can digest.

Compared to large-cap companies that release a lot of financial information, companies with shares under Rs. 50 may make limited information available. This can make it difficult for investors to analyse their performance and financial health.

Such small stocks are prone to market manipulation by investors and traders. This manipulation can result in increased risk and price distortions in the market.

Guoabong Stock