By Ekta Sonecha Desai
In periods of swift market corrections, investors tend to examine valuation metrics to determine if stocks have gotten cheap compared to their fundamentals. One of the most common metrics is the Price-to-Earnings (P/E) ratio, which measures a company’s stock price versus its earnings per share (EPS).
A low P/E ratio may imply that a stock is cheap, but it can also reflect concerns regarding growth, profitability, or industry problems. On the other hand, high P/E stocks are often viewed as expensive due to market optimism for future earnings capacity.
A market drowning in the red offers a chance to look at stocks that are trading at lower P/E ratio. However, not every low P/E stock is an investment opportunity. Low P/E ratio could indicate that stocks may be facing structural challenges that support their low valuations.
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In this study, we have taken into account stocks with positive earnings (P/E of more than zero) and a market cap of more than Rs 5,000 crore. Please note we have not considered any banking stocks.
In this article we talk about five such low P/E stocks that fit the bill.
Let’s take a closer look.
5 Low P/E Companies
Company NameClosing Price as on 20th February 2025 (Rs)P/E Ratio (x)5 Year Median P/E (x)Ashoka Buildcon201.43.910.3GE Shipping9115.46.9KNR Construction2385.517.3Power Finance Corporation391.15.83.1LIC Housing Finance545.75.87.3Source: Screener.in #1 Ashoka Buildcon
Ashoka Buildcon is engaged in the business of construction and infrastructure facilities on EPC and BOT basis. It is also involved in the sale of ready mix concrete (RMC).
Ashoka Buildcon is currently trading at a low P/E ratio of 3.9 times. It is significantly lower compared to its 5 year P/E of 10.3 times, indicating a steep discount.
IDBI Capital has set a target price of Rs 260, implying a 14% upside, factoring in debt reduction, asset monetization, and a Rs 1,64,000 crore order book. With strong earnings momentum and sectoral tailwinds, the stock’s valuation appears more reflective of market sentiment than fundamental weakness.
#2 GE Shipping
Great Eastern Shipping Company along with its subsidiaries is a major player in the Indian shipping and oil drilling services industry.
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