Value Stock: Swaraj Engines is undervalued compared to its peers; Have a look!

Yogesh Supekar
/ Categories: Trending, Mindshare
Value Stock: Swaraj Engines is undervalued compared to its peers; Have a look! 1887 0

Swaraj Engines was established in 1989 it manufactures diesel engines specifically for tractors in the range of 22 HP to above 65 HP and hi-tech engine components.

Outperformance comes when one pickes the right stocks at right valuation. In bull markets it is very difficult to identify a stock at right value. Swaraj Engines seemingly is available at right valuation in current market condition where most stocks have more than double in value in past one year, thus making valuations expensive. Swaraj Engines is a 'High Dividend Yield' company offering an yield of 2.78 per cent at current prices. Its ROE is little over 35 and the stock is available at a PE of 18.5 making it cheaper when compared to its peers. The share price of Swaraj Engines is up by more than 25 per cent in 2021 alone while in one month the stock has gained ~3 per cent. 

On Tuesday we have seen Cummins India top the gainer chart and is attempeting to break the key resistance level. Cummins India is reflecting a ROE of 14.4 per cent much lower than that of Swaraj Engines. Kirloskar oil Engines also reflects a much lower ROE of close to 10. 

Higher ROE reflects the efficiency of the management and empirical data suggests high ROE stocks tend to outperform. 

Swaraj Engines was established in 1989 it manufactures diesel engines specifically for tractors in the range of 22 HP to above 65 HP and hi-tech engine components.

 

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