Low Priced Stocks to Buy in India in 2017

What are low priced stocks? Are penny stocks low priced? In stock investing it is important to define ‘low price’. General understanding is, Rs.100 IS greater than Rs.50.

But it can be different in case of stock investing. A stock which is trading at Rs.100 can be considered cheaper than a stock trading at Rs 50.

This is a reason why expert investors never looks at market price of stocks in isolation. The trading price that we see can often be very misleading. This is one reason why expert investors always perform ‘stock valuation’ before buying one.

It is the result of stock valuation that one can identify Rs.100 stock as cheaper than Rs.50 stock.

Low priced stocks are those stocks which are trading at discount to its intrinsic value. But it is not easy to estimate intrinsic value of stocks.

There is an easier alternative available to check if stocks can be tagged as low priced stocks. We can use financial ratios to evaluate if a stock is trading at cheaper price.

These financial ratio is a great tool for common people who are not very conversant with analyzing financial statements.

Which financial ratios can be used to identify low priced stocks?

Price Earnings Ratio (P/E)

Price earnings ratio (P/E) is one of the most used valuation tool in stock market. It compares market price of stock (P) with its Earning Per Share (E). As a rule of thumb, P/E ratio multiple of 15 is considered reasonable.
Price Earnings Ratio = P/E
P=Market Price, E=(PAT-Dividend Paid on Preference Shares)/(No. of Shares)

Price to Book Value (P/B)

Price to book value (P/B) is again one of the most followed financial ratio of stock market. It compares market price of stock (P) with total shareholder’s equity per share / book value per share (B). As a rule of thumb, P/B ratio multiple of 1.5 is considered reasonable.
Price to Book Ratio = P/B
P=Market Price, B=Book Value per Share / Net Worth Per Share = (Share capital + Reserves)/No. of Shares).

Dividend Yield (D/P)

Dividend yield is one of the most reliable stock valuation tool available for investors. It compares market price of stock (P) with dividend/share paid to shareholders(D). As a rule of thumb, D/P multiple of more than 0.03 (3%) can considered reasonable.
Dividend Yield = D/P
P=Market Price, D=Dividend paid per share in last FY.

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PEG Ratio

PEG ratio is an extension of P/E ratio of stocks. We discussed that P/E ratio of less than 15 is considered reasonable. But in calculation of PEG, companies earning growth rate (EPSG) is considered for valuation.

A fast growing company will be considered reasonable even it P/E is high. As a rule of thumb, PEG multiple of less than 1 is considered reasonable. If purpose is to find low priced stocks, PEG ratio is one of the most reliable tool.

Price Earning Growth Ratio = (P/E)/EPSG

P=Market Price, E=(PAT-Dividend Paid on Preference Shares)/(No. of Shares), EPSG=Earning Per Share Growth Rate in last 3 year (5year growth can also be considered).

Price to Sales (P/S) Ratio

Price to sales ratio is same as P/E ratio. Here instead of using earning as comparator one uses sales turnover. Companies PAT figures can be manipulated in financial statements. But sales turnover is hard to manipulate.

These days expert investors consider P/S ratio as more authentic than P/E ratio. Low P/S ratio will provide better valued stock than a low P/E stock. As a rule of thumb, P/S multiple of less than 1.5 is considered reasonable.

If purpose is to find low priced stocks, P/S ratio is a very good tool.

Price to Sales Ratio = P/S

P=Market Price, S=Sales Turnover.

Price to Dividend (P/Div) Ratio

Like price to sales ratio, Price to dividend ratio is another parameter which cannot be manipulated easily in financial statements. Here one can use ‘dividend per share’ paid to shareholder’s as a comparator.

Comparing dividend per share with market price of stocks can give great insight in terms of valuation. Investors consider P/Div ratio as one of the most reliable valuation ratio.

Price to Dividend Ratio= P/Div
P=Market Price, Div=Dividend Per Share.

Conclusion – What are Low Price Stocks?

Low price stocks are not those stocks which trade at double-digit market price. In investment terms, low price stocks are those stocks which are undervalued. Famous stocks like Apple, Microsoft, Google, Exxon Mobil etc are hardly available at undervalued price levels. Experts investors keep track of such famous stocks. Market price of these famous companies must be tracked. But looking only at price is not useful. Comparing market price of stocks with its sales, earnings (Profit), earning growth, net worth, operating cash Flow etc gives great insights. Tracking high market cap stocks with help of these ratios will certainly help investors to tap ‘quality undervalued stocks’.

Low Priced Stocks in India in 2017

(Updated: July’2017)

SL Company name Market Cap. (RS.) Current Market Price (Rs.) 52W Low Price P/E P/B P/S Div. Yield (%)
1 Reliance Infrastructure Ltd   136.11B 516.0 426.5 9.40 0.58 0.54 1.65
2 Tech Mahindra Ltd   385.85B 396.7 357.6 12.54 2.09 1.31 2.30
3 Oil India Limited   219.55B 289.7 258.0 8.49 0.88 2.65 5.58
4 Bharat Heavy Electricals Limited   355.26B 145.4 116.2 11.42 1.08 1.25 1.10
5 Union Bank of India   107.82B 157.2 116.3 4.09 0.44 1.02 1.25
6 Coal India Ltd   1.59T 256.0 243.0 17.27 6.29 1.93 8.01
7 NMDC Limited   378.40B 120.0 94.2 7.47 1.68 3.14 9.20
8 Irb Infrastructure Developers Ltd   76.32B 216.5 177.5 10.63 1.43 1.29 2.33
9 Vedanta Ltd   1.01T 272.1 154.0 14.64 1.32 1.31 7.25
10 Infosys Ltd   2.24T 979.9 900.3 15.56 3.27 3.28 2.61
11 Tata Power Company Limited   225.85B 83.5 67.1 30.29 1.68 0.80 1.58
12 Torrent Power Ltd   88.42B 183.3 159.0 20.54 1.26 0.86 1.22
13 Indian Oil Corporation Limited   1.82T 375.3 248.5 35.54 1.77 1.19 5.41
14 Punjab and Sind Bank   22.44B 55.9 46.0 11.11 0.36 0.81 3.00
15 Great Eastern Shipping Company Ltd   61.84B 407.1 321.3 8.15 0.85 1.97 2.48
16 Bharat Petroleum Corp Ltd   1.02T 469.8 372.7 160.70 3.30 0.74 3.52
17 Vardhman Textiles Ltd.   67.51B 1,176.7 955.0 9.79 1.56 1.10 1.29
18 HCL Technologies Ltd   1.24T 894.7 717.0 15.56 3.80 2.73 2.73
19 Reliance Capital Limited   167.59B 660.3 398.6 15.36 1.10 0.97 1.49
20 Tata Chemicals Limited (Parent)   160.18B 628.0 445.5 18.64 2.01 1.19 1.77
21 JSW Energy Ltd   103.85B 64.1 53.5 16.57 0.98 1.23 0.80
22 Bajaj Auto Ltd   816.56B 2,817.1 2,817.1 19.98 4.59 3.55 1.94
23 Mphasis Ltd.   121.79B 576.0 425.0 15.31 1.95 1.98 2.98
24 Hindustan Petroleum Corporation Limited   581.67B 384.0 243.4 42.93 2.66 0.51 2.08
25 NLC India Ltd   158.38B 104.5 71.0 12.03 1.32 2.87 2.86
26 IDFC Ltd   94.55B 59.4 50.2 13.57 0.85 0.87 0.44
27 Tamil Nadu Newsprint & Papers Limited   24.30B 350.0 260.0 9.16 1.37 0.76 2.22
28 E.I.D-Parry (India) Ltd   56.77B 321.9 222.0 10.95 2.08 0.39 1.23
29 IL&FS Transportation Networks Ltd   31.33B 95.2 65.9 21.92 0.74 0.39 2.13
30 SJVN Ltd   138.58B 33.5 26.0 12.43 1.20 7.36 8.16





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Mani
I am a Blogger with a passion for investment education. I started blogging in 2007-08. Blogging didn’t happened to me as a coincidence, it was a conscious decision. The idea with which I started blogging still stands true. In my starting days my finances remained tight. I was reading heavily about how to manage finance. One day I got hold of a book which my father gifted me in 2003. It was stacked below my graduation books. It was a small-thin book with its cover named "Rich Dad Poor Dad".....more

30 Comments on "Low Priced Stocks to Buy in India in 2017"

  1. I am profiting in share market simply by studying the charts. Your explanations about the ratios is simple and easy to understand. These ratios will improve my picking the stock. Thanks

  2. Gopalakrishnan B Chettiar | July 9, 2017 at 7:21 am | Reply

    What a superb collative of various ratios. However, how to correlate each other prior deciding to select to buy the stock is not detailed. Of course, we do understand that spoon feeding cannot be done at each stage, but detailing how to correlate the ratios to buy a share would be a paramount guidance to novices, who are sincerely read and follow your esteem blog.

  3. Rajendra sahu | July 5, 2017 at 8:25 pm | Reply

    Looking to invest in best penny stock. Can any one would give better recommendation for best stock and which price brand would be (1-10)

  4. SANJEEV KUMAR SINHA | June 29, 2017 at 11:38 am | Reply

    I wish to buy the low CMP Stocks which are fundametally super strong & are bound to go up in its prices over time.
    Can you pls advise 5-7 such potentially milti bagger kind of Stocks which I can retain for 7/10 yrs & get a good compounding returns?
    Thanks
    Sanjeev Sinha

  5. Very informative and good guidance to assess penny stocks.

  6. Any stock to be bought

  7. Hiii…its good to see all the comments. I want to invest money. Which share should i buy..

  8. Your work is great to us

  9. @ranjit kamble,
    Please go for Chennai Petro(CMP about Rs 385/=,dividend yet to be declared,but may be high) and PFC(Interim Dividend of Rs 5/= declared,ut EPS is quite high,CMP about Rs 162/=).Use stop-losses.

  10. @arun,
    Please Buy Aswini Gujral’s Book,on this subject.But it is very risky for beginners to day-trade.Even then some suggestions,may be of help:-
    1.Ensure that YOU have BOUGHT a House of yor own,as Roti,Kapda,Makhan are TOP, priorities in Life.
    2.Have at least a year’s capital for the necessities
    3.Day trade with 10% of the extra Cash you have,so that in case of losses,you live to fight another day!
    4.Trade only in a Bull Market(which is about 30% of the time,as per Shri Gujral) or Bear Market.Use Technical Analysis Tool available in Moneycontrol dot com
    5.Use ADX to find whether a market is Bullish or Bearish
    6.Then you can use MACD to trade in a Bear market.
    7.Follow trends,as TREND IS YOU FRIEND.
    8.Choose stocks which are trading in huge volumes.
    9.Have a 1% stoploss
    10.In case of profit,use trailing stop-losses.
    11.In the beginning,use ONLY small amounts to Trade.As you gain experience,you can go full throttle,with 10% of your extra cash.
    In the case of investing:-
    1.Choose Debt-free Cos.
    2.Enter when the Market is in relatively Bear phase
    3.Choose stocks with HIGH EPS,CashFlow.
    4.Track the strength of the Rupee,Crude price.These will help you in your choice.
    5.One trick is to use Stocks to hedge other stocks.
    For example buy OMCs like Chennai Petro,IOC,HPCL,BPCL et nd hedge with Oil producers like ONGC,Oil India etc.Buy Physical Gold and Hedge with Jewelry stocks,like PC Jeweler.
    6.Spend about 5 hours daily,visitng many top Indian sites and using search engines
    7.Buy Low,Sell Dear,dear
    8.START A BLOG ON STOCKS,INVESTING via Blogger,wordpress,etc

  11. Chennai Petro (Bumper Profit,EPS about Rs 60 for the first three Qs,due to cheap Crude and strong Rupee)and Power Finance Corporation (Interim Dividend rs 5/= declared for 2016/17)are hot now.

  12. Hi,

    I’m new to stock market and your blog is really useful and informative. It would be great if you can write about how to do Intraday trading or basics , factors to watch for etc .. Thanks in advance .

    Regards,
    Madhu R

  13. Prafulla Ranjan | March 16, 2017 at 9:10 pm | Reply

    Should Suzlon Enery be bought at current price for a time horizon of 2-3 years?

  14. Can mahindra financial services be bought now

  15. i want to purchase a low amt shares with high quantity for long period ..please suggest the name of share between 50 to 100 rupeez required share value..

  16. Amazing sir thanks a lot for ur beautifull guidance….

  17. Prakash Alagannavar, Chikodi, Karnataka | December 16, 2016 at 10:44 am | Reply

    Quite educative. Thanks.

  18. good informatation

  19. Sir,I read ur blog.It is really informative and can guide investors.
    G D Mishra

  20. Very informative

  21. Nizarali Mahesania | August 12, 2016 at 10:03 am | Reply

    Sir, your is very informative and excellent, i have no words to express my gratitude !!!
    I like to buy “Stock Analysis Worksheet” costing INR 345 to evaluate low price stocks as discussed in above blog, how can I buy this product ONLINE by using netbanking
    pls help me
    regards, nizar m

  22. SIR
    ITS NICE and VALUABLE PRESENTATION.

  23. Hi, your blog is very much useful. Superb fr undwrstanding. Can u advice how to trade “intraday” safely & profitably….? If u explain with sbi cap it will be more better.

  24. Low-priced stocks are something that I tweet about on a regular basis. I frequently flag high-probability setups, stocks under 10 breakout candidates and low-priced stocks that are acting technically bullish.

  25. Sir,

    Could you please show the calculation for all the ratios of any one of the company above (say for Wipro Ltd)? Because I couldn’t understand the math here. Where did u get the base values like Market Price and Sales figures (Moneycontrol ?)

    Regards,
    Ramith

  26. Thanks for your kind information and service.

  27. Pleas madhu don,t go for intraday it never beneficial

  28. Hi,

    I’m new to stock market and your blog is really useful and informative. It would be great if you can write about how to do Intraday trading or basics , factors to watch for etc .. Thanks in advance .

    Regards,
    Madhu R

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