Synopsis: Five fundamentally strong stocks across chemicals, water infrastructure, IT, plastics, and FMCG are trading at notable discounts from their 52-week highs, offering potential opportunities amid recent market corrections.
Market corrections often create opportunities in quality stocks trading below their peak valuations. Several fundamentally strong companies, spanning speciality chemicals, water treatment, technology, manufacturing, and consumer goods, are currently available at discounts from their 52-week highs. These stocks combine strong business models with long-term growth prospects, making them attractive for investors seeking value in fundamentally resilient names.
Privi Speciality Chemicals Ltd is primarily engaged in the manufacturing, supply and export of aroma and fragrance chemicals used in soaps, detergents, shampoos and other fine fragrances. Privi Speciality Chemicals Limited, formerly Fairchem Speciality Limited, is India’s largest manufacturer and exporter of aroma chemicals, holding a greater than 20% global market share in their products.
With the market cap of Rs 10,638 crore, the shares of Privi Speciality Chemicals Ltd have closed at Rs 2,723 and are trading at a PE of 39.8, whereas their industry PE is 25.5. The stock is currently trading at a 21% discount from its 52-week high of Rs 3,433, reflecting a recent price correction. This indicates the stock is available significantly below its peak valuation. The shares have an ROE and ROCE of 18.4% and 16.4%, respectively.
Va Tech Wabag Ltd
Va Tech Wabag Ltd is engaged in the business of the water treatment field. Its principal activities include design, supply, installation, construction and operational management of drinking water, wastewater treatment, industrial water treatment and desalination plants.
With the market cap of Rs 6,895 crore, the shares of Va Tech Wabag Ltd have closed at Rs 1,107 and are trading at a PE of 21.5, whereas their industry PE is 18. Shares are trading 34% lower than their 52-week high of Rs 1,679, showing a notable pullback from recent highs. This is despite the continuous orders it bagged in the wastewater treatment segment. The correction has brought valuations to more reasonable levels. The shares have an ROE and ROCE of 14.6% and 19.7%, respectively.
KPIT Technologies Ltd
KPIT is a global technology company with software solutions that will help mobility leapfrog towards an autonomous, clean, smart and connected future. The company specialises in embedded software, AI & digital solutions, and KPIT enable customers to accelerate the implementation of next-generation mobility technologies.
With the market cap of Rs 30,407 crore, the shares of KPIT Technologies Ltd have closed at Rs 1,109 and are trading at a PE of 39.3, whereas their industry PE is 24.7. The stock has corrected by 25% from its 52-week high of Rs 1,479 and is now trading at lower levels. This decline highlights the recent cooling in investor sentiment. The shares have an ROE and ROCE of 32.5% and 40%, respectively.
Shaily Engineering Plastics Ltd
The company is engaged in the manufacture and sale of injection-moulded precision plastic components and sub-assemblies for various requirements of Original Equipment Manufacturers (OEM). It also offers secondary operations in plastics like vacuum metalising, hot stamping, and ultrasonic welding.
With the market cap of Rs 9,103 crore, the shares of Shaily Engineering Plastics Ltd have closed at Rs 1,981 and are trading at a PE of 62.3, whereas their industry PE is 20.7 Trading at a 29% discount to its 52-week high of Rs 2,800, the stock has moved off its peak zone. This suggests the stock has undergone meaningful price correction. The shares have an ROE and ROCE of 18.5% and 19.5%, respectively.
ITC Ltd
Established in 1910, ITC is the largest cigarette manufacturer and seller in the country. ITC operates in four business segments at present, which are FMCG Cigarettes, FMCG Others, Paperboards, Paper and Packaging, and Agri Business.
With the market cap of Rs 4,07,075 crore, the shares of ITC Ltd have closed at Rs 325 and are trading at a PE of 20.2, whereas their industry PE is 44.1. The current price stands at 31% below the 52-week high of Rs 471.3, indicating a sharp retreat from peak levels. The shares have an ROE and ROCE of 27.3% and 36.8%, respectively.
One of the reasons for this fall was the government imposing higher tax on sin goods, and as ITC has its foot in the tobacco segment, there spread a negative notion about margin impact, and this added to the stock price fall. The stock is now in a relatively discounted zone compared to its recent highs.
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