Top Stocks Under Rs.100
10 months ago
common misconception that stock market investment requires a substantial financial commitment. But here's the truth: You don't need a fortune to embark on your stock market journey.
At its core, investing in stocks is about identifying opportunities that can yield significant returns over time. Sometimes, gems in the stock market trade below their true value due to various reasons like market misjudgements, company news, or temporary investor scepticism. These stocks represent solid businesses with strong fundamentals and a history of success.
Today, we're excited to bring you a blog that shatters the myth of high entry barriers. We've meticulously curated a list of top-notch stocks, all priced under Rs. 100, that have been scrutinized through fundamental analysis and trusted by seasoned investors. These stocks hold the potential for remarkable growth in the near future.
Discover a world of possibilities as we unveil the best stocks under Rs. 100, paving the way for your prosperous investment journey!"
1. Value Investing: You don't need a fortune to be a value investor. With a long-term outlook and patience, you can find great opportunities in stocks under Rs 100. Invest in strong companies and wait for them to grow over time, focusing on long-term gains rather than short-term fluctuations.
2. Harness the Power of Compounding: Value investing allows you to benefit from compounding. Reinvesting your returns and dividends from Rs 100 stocks can lead to significant growth in your profits without extra effort. Let your money work for you and watch it grow steadily over the years.
3. Lower Risk: Value investing is known for its low-risk approach. By holding onto stocks under Rs 100 for the long haul, you can avoid being swayed by daily market ups and downs. This strategy helps build a stable and diverse portfolio, preventing hasty decisions and impulsive investments.
Invest wisely in stocks under ₹ 100, and you'll discover a path to potential financial success."
Here is a brief overview of the stocks that can be bought under ₹ 100
About
Steel Authority of India Limited (SAIL) is one of India's biggest steel-making companies and holds the prestigious Maharatna status as a Central Public Sector Enterprise. SAIL operates five integrated plants and three special steel plants mainly in the eastern and central regions of India, near local sources of raw materials. The company produces and sells a wide variety of steel products.
Key Highlights
I. SAIL is one of India's leading steel-making companies and holds the prestigious Maharatna status as a Central Public Sector Enterprise.
II. The company's operations cover the entire hydrocarbon value chain, including refining, pipeline transportation, marketing of petroleum products, R&D, exploration & production, marketing of natural gas, and petrochemicals.
III. Sales volume target for FY24 is set at 18.7 million tonnes, representing a 15% YoY improvement. SAIL aims to achieve this through strong domestic demand and higher sales in Q3/Q4, typically strong quarters.
IV. In Q3FY23, SAIL operated at its rated capacity, and the company plans to add around 2.5-3 million tonnes of additional capacity through debottlenecking existing assets over the next 3-4 years.
V. Despite a less Capex-intensive phase for FY24/25E, the company's Capex guidance for FY24 stands at ₹ 6,500 Crores, primarily directed towards plant maintenance and debottlenecking.
Key Risks
I. The company faces risks from fluctuations in coking coal costs, which may impact margins and profitability.
II. Unfavourable steel spreads could affect SAIL's financial performance, especially in periods of lower steel prices.
III. Lower-than-expected sales volume may impact revenue growth and overall financial results.
Financial Performance
I. SAIL's Q4FY23 EBITDA/PAT missed estimates due to higher-than-expected employee and other expenses.
II. Revenue recovered by 16% QoQ, driven by improved steel sales volumes and higher hot-rolled coil (HRC) prices.
III. EBITDA stood at ₹ 2,924 Crores, down 33% YoY but up 41% QoQ, missing both analysts' and consensus estimates.
IV. Underlying PAT stood at ₹ 1,200 Crores, down 51% YoY, but grew by 392% QoQ, missing estimates.
V. The management aims to reduce debt, with expectations of lower cash outflow towards coal purchases due to softening coal prices.
Outlook
I. SAIL has reached its rated capacity in Q3FY23 and plans to release ~3 million tonnes of incremental capacity over the next 3-4 years through debottlenecking existing assets.
II. The company's profitability will largely depend on steel spreads, and management anticipates favourable results from reduced coal prices.
III. The company's future expansion plans include increasing capacity at the IISCO, Bokaro, and Rourkela plants, targeting a total steel capacity of 35 million tonnes by FY32.
IV. Cautious sector outlook is necessary due to risks associated with coking coal costs and steel price fluctuations.
Key ratios
As of FY'23
P/E
28.4
ROCE
15.7
ROE
10.2
Dividend Yield
0.27
EPS
2.18
About
Indian Oil Corporation Ltd is a leading company in India, owned by the Government of India. They are involved in various aspects of the oil and gas industry, including refining, transporting, and selling petroleum products. Additionally, they are engaged in research, exploring for oil and gas, and marketing natural gas and petrochemicals. Indian Oil holds a significant position in India's oil refining and petroleum marketing sector.
Key Highlights
I. Robust Refining and Marketing Margins: IOCL reported a strong performance in Q1, with EBITDA at ₹ 222 billion, representing a significant YoY growth of 13 times and a QoQ increase of 44%. The beat was largely driven by better-than-expected performance from the marketing segment. Refining and marketing margins remained robust, supporting earnings.
II. Favourable Refining Margins: Despite a decline in crude throughput by 1% YoY and 2% QoQ, IOCL's reported Gross Refining Margin (GRM) for Q1 was USD 8.34/bbl. The derived refining EBITDA declined YoY and QoQ due to moderation in product cracks from abnormally higher levels seen last year. However, the company is expected to maintain strong refining margins.
III. Improved Marketing Margins: Domestic marketing sales volume showed marginal growth of 0.2% YoY and 1% QoQ, while exports declined. The blended gross marketing margin for the quarter stood at ₹ 9.2/lit, supported by higher margins for petrol and diesel due to moderated crude oil prices.
Key Risks
I. Volatility in Commodity Prices: IOCL's financial performance is sensitive to fluctuations in crude oil and petrochemical product prices. Adverse movements in commodity prices can impact refining margins, marketing segment earnings, and overall profitability.
II. Petchem Segment Weakness: The petrochemical segment's weaker performance in Q1 and its vulnerability to market dynamics pose a risk to IOCL's overall financial performance. Any adverse changes in demand or pricing may further impact the segment's earnings.
III. Elevated Debt Levels: While IOCL's gross debt declined to ₹ 1.1 trillion as of Jun-23 end, it remains at elevated levels. High debt can lead to increased interest costs and limit the company's financial flexibility.
Financial Performance
I. Strong EBITDA and APAT: IOCL's Q1FY24 EBITDA of ₹ 222 billion and APAT of ₹ 138 billion exceeded expectations, driven by robust refining and marketing margins. This indicates the company's ability to capitalize on favourable market conditions.
II. Refining Segment: Despite a slight decline in crude throughput, IOCL's refining segment reported a GRM of USD 8.34/bbl for Q1. However, the derived refining EBITDA witnessed a decline YoY and QoQ due to changes in product cracks compared to the abnormally higher levels seen last year.
III. Marketing Segment: The marketing segment's favourable performance was supported by higher margins for petrol and diesel due to moderated crude oil prices. Domestic marketing sales volume showed marginal growth.
Outlook
I. Positive Growth Trajectory: IOCL's robust refining and marketing margins provide a positive outlook for the company's earnings. The company's ability to capitalize on favourable market conditions indicates its resilience and potential for sustained growth.
II. Debt Reduction and Financial Flexibility: While IOCL has managed to reduce its gross debt, the company's elevated debt levels remain a concern. Focus on further debt reduction and improving financial flexibility will be crucial for the company's long-term sustainability.
III. Petchem Segment Improvement: The petrochemical segment's weak performance requires attention, and efforts to improve EBIT margins and enhance market positioning will be essential for bolstering the company's overall financial performance.
Key ratios
As of FY'23
P/E
5.41
ROCE
8.15
ROE
7.17
Dividend Yield
3.21
EPS
6.93
Key Highlights
HFCL is expected to benefit from various growth factors in the long term:
I. 5G rollout in metros, 4G expansion in remote areas, FTTH/broadband penetration, and BharatNet are estimated to create a significant ₹ 3.0 lakh crore opportunity in the optical fiber cable (OFC) space.
II. HFCL is expanding its OFC capacity from 23.4 million fiber km (fkm) to 34.8 million fkm, and its optic fiber capacities from 8 million fkm to 10 million fkm in FY23, with further expansion to 22 million fkm.
III. The company has diversified into telecom equipment for the 5G spectrum, Indian Railways, and metro rail, aiming to increase export revenue from ₹ 350 crore in FY22 to ₹ 1,500 crore in FY24.
IV. HFCL has ventured into defense electronics, targeting a market estimated at ₹ 1.0 lakh crore, which could benefit from the new Defense Procurement Policy of the government.
V. Diversification into new verticals is expected to improve business opportunities and de-risk the overall business model. Telecom equipment and defense electronics are high-margin businesses (over 14% EBIT margin) compared to OFC (11-12% EBIT margin).
Key Risk
I. Potential risks include fluctuations in coking coal costs and steel prices, which could impact margins and profitability.
II. Sales volume uncertainty might affect revenue growth and overall financial performance.
Financial Performance
I. During FY18-22, HFCL's revenue grew at a CAGR of 9.8% to ₹ 4,727 crore, with revenue share shifting from turnkey contracts and services (73.3% in FY18 to 58.2% in FY22) to telecom equipment (26.7% in FY18 to 41.8% in FY22).
II. EBITDA and net profit grew at a CAGR of 24.3% and 16.9%, respectively, with EBITDA and net margins improving by 536bps and 146bps, respectively, during the same period.
III. HFCL managed to reduce its net debt from ₹ 333 crore in FY18 to ₹ 219 crore in FY22, further supporting the bottom-line.
Outlook
I. HFCL's revenue is expected to grow at a CAGR of approximately 20.0% to ₹ 8,177 crore during FY22-25, primarily driven by turnkey contracts and services (7.2% CAGR) and telecom equipment & defence electronics (34.2% CAGR).
II. EBITDA and net profit are projected to grow at a CAGR of 21.7% and 30.4%, respectively, with EBITDA and net margins improving by 60bps and 188bps.
III. Return ratios – RoE and RoIC – are expected to improve by 473bps to 15.9% and 361bps to 22.6%, respectively.
IV. The company has shown positive developments, with the reduction of pledged promoter equity from 18.8% in Jun 2021 to 17.6% in Mar 2022, and the expectation of complete extinguishment by Jun 2023.
Key ratios
As of FY'23
P/E
28.4
ROCE
15.7
ROE
10.2
Dividend Yield
0.27
EPS
2.18
As a beginner investor, you don't need a large amount of money to start. Even small sums can be used to invest in stocks. Be smart and patient with your investments.
